The substantial White Paper, released on 24 September, expounds on the nature of China's trade relations with the US. Entitled "Facts about the China-US Trade Dispute and China's Stance", it tries to show that the two nations are at different stages of development with very different political-economic models. Yet, trade and investments between the two countries have grown by leaps and bounds, benefitting businesses and peoples in both countries as well as the world at large. Supporting this benign relationship is mutual economic complementarity and a multilateral rule-based order supported by the United States.
However, in recent months, the United States seems to want to upend this mutual relationship and global order by resorting to mercantilist bullying and economic nationalism under the banners of "national security" and "America First". While a trade war will hurt both countries, China will not sacrifice its national interests, which it is prepared to defend to the bitter end. China remains fully committed to economic reforms and opening up and continues to support a multilateral world order. It is not enthusiastic about a trade war and always keeps the door open for negotiations on the bases of mutual respect, mutual trust and win-win relationships.
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The Paper contains a swathe of trade and economic data in support of the benign trading relations between the two countries, showing how much the US economy and American businesses and people have benefitted. It tries to showcase China's progress in foreign intellectual property protection and opening up of various sectors of China's economy. It explains that even the United States practises various trade discriminatory policies and subsidizes a host of industries including agricultural and high-end strategic businesses. Indeed, China's "Made in China 2025", which seems to alarm US policy makers in recent months, was inspired by the United States' "Strategy for American Innovation" (2011) and "National Strategic Plan for Advanced Manufacturing" (2012).
What the Paper hasn't touched on, however, is the realization that the trade war is but a manifestation of an all-out bipartisan strategic pushback against China as a rapidly rising challenger to US global economic and geopolitical dominance. Click here Despite well-intentioned rhetoric of helping to bring China into the world's multilateral trading system (WTO), the reality has dawned on US strategists that instead of getting mainly the crumbs from the table (China makes only $8.46 from an i-phone), China is fast advancing to capabilities of eating America's lunch, at least in some areas. This is happening not only in trade, but in military projection and geopolitics in theatres such as the South China Sea and China's Belt and Road Initiative extending to four corners of the globe.
These strategic worries do not bode well for early ending of the trade war, nor, for that matter, for early return to a more benign relationship between the world's sitting superpower and its perceived rising challenger. A Thucydides Trap has sprung in the form of All Measures Short of War. Welcome to a new US-China Cold War of the 21st century.
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