The trade war between China and the United States has shown signs of easing since the beginning of September, with both sides announcing the exemption of certain commodities from added tariffs and disclosing the preparatory moves they have made for the 13th round of high-level economic and trade consultations scheduled for early October — though there is no substantial improvement in such crucial sectors as high technology and intellectual property.
Meanwhile, concerns remain that the trade war could escalate into an all-around confrontation between the two countries, given the worsening geopolitical situation in Taiwan, Hong Kong and the South China Sea. The concerns boil down to two questions: Can a confrontation be avoided? And if so, how?
First of all, there should be confidence that an all-around confrontation between China and the U.S. is avoidable. Many analysts hold that China should “cast away illusions and be ready to fight,” arguing that a new cold war began when the US explicitly defined China as a “revisionist country” and a strategic rival in its official documents, including its state security strategy. The unilateral economic sanctions and political pressures Washington has imposed on China constitute a new kind of cold war, the analysts said.
But while it is undeniable that the U.S. attitude toward China has turned negative, that does not mean that the relationship will necessarily become a cold war.
First, the environment inside the U.S. is not favorable. After 40 years of trade and exchanges, the two economies are highly dependent on each other. U.S.-based transnational corporations have become a major stakeholder in the relationship, and American consumers benefit enormously from the low price of Chinese goods. Waging a cold war against China necessitates an overwhelming domestic consensus in the U.S. that China is the archenemy, and tha it must decouple at all costs — as was the case with the Soviet Union. At present, however, there is no evidence that the economic sector is willing to make such a sacrifice, nor any sign that American society in general demonizes China.
Second, the international environment is unfavorable to a new cold war mindset. In the Cold War of the past, the U.S. organized the Coordinating Committee for Multilateral Export Controls (COCOM) to impose all-around constraints on technological and economic links with the Soviet Union. That multilateral mechanism was successful because major Western economies had a consensus that they needed to team up with the U.S. against the archenemy. It was also a fact that they could fare pretty well without cooperating with communist countries, given the American dominance in the global economic system.
At the present time, however, the West has not formed a consensus that severing relations with China is necessary, as shown in the Huawei case, where the U.S. called for unanimous sanctions on the Chinese tech giant but few European countries responded positively and many other Western countries remain ambivalent.
Although current conditions work against a scenario of full confrontation, China should not rest carefree and motionless, for no one can exclude the possibility that things could turn in a negative direction. The so-called “Thucydides trap” theory overemphasizes the rising power’s dissatisfaction with the current international order, as well as its will to challenge the established power. In fact, the rising power usually refrains from doing so because it cares more about protecting itself. By contrast, the ruling power, fearing displacement, is often adamant in the rivalry and tends toward actions that prevent the opponent from growing stronger.
For China, what is most important is not an immediate change to its negative image in the U.S. but rather a change in the domestic and international climate that it’s feared could lead to an all-around confrontation between the two countries.
First, China should remain committed to multilateralism and globalization. Inside the country, there are some voices advocating all-around confrontation as a way to settle problems with the U.S. These voices should be prevented from becoming mainstream discourse. The trade war is a test of China’s ability to adapt to the changes and upgrading that are happening in the process of globalization. Difficulties may arise for China in its development but that will not be the final result. China can adopt a pragmatic approach, under which it can fight what should be fought against, reform what should be reformed and go into negotiations where negotiations are needed. So long as China does not respond in a tit-for-tat manner to every Cold War-style provocative move taken by the U.S., there will not be all-around confrontation. This is not a policy of appeasement but rather one of strategic confidence and patience.
Second, China should expand economic cooperation with other countries and push for Asian economic integration. In this way, it can prevent the international environment from becoming favorable for the birth of an all-around confrontation with the U.S. By strengthening economic and technological cooperation with Europe, Japan and other developed economies, China can lessen its reliance on the U.S. and develop a more balanced structure of foreign economic relations. Meanwhile, this will also generate a sense of urgency in the U.S., if it sees that it could lose the Chinese market. That, in turn, could result in some changes in America’s domestic discussions about what to make of China.
Though progress has been made in the process of Asian economic integration, there is still great potential to be tapped. For instance, the three major economies in East Asia – China, Japan and the Republic of Korea – have yet to sign the long-talked-about free trade agreement. So long as China persists in the principle of free trade, and given the comparative advantages it currently enjoys, European and Asian countries would not likely respond positively to a U.S. suggestion to establish a COCOM-style multilateral mechanism to isolate China, even if Washington would really like one.