On the evening of June 22th, RDCY Seminar Series was held in Chongyang Institute for Financial Studies at Renmin University of China (RDCY). Bao Jianyun, professor of School of International Studies and also director of Center of International Politics and Economy at Renmin University of China, was invited to deliver a speech themed “Trade War, Crisis Contagion and China`s Strategic Option”. The lecture focused on the reasons and effects of the trade wars and China`s strategic responses. Professor Bao Jianyun noted that if the Sino-US trade war breaks out, the United States will not win and China will not lose. However, the crisis and effects triggered by the trade war are extremely serious, and China needs to respond cautiously.
Professor Bao emphasized that trade and war are two different things. Trade is an invention of mankind derived from the overproduction. it has been accompanied and evolved with the development of human civilization. On the other hand, trade and war are connected. Some of the trade activities irritate wars, and sometimes wars could help develop trades. The key point for winning the trade war lies in the understanding for the rivals, and participants’ ability, knowledge, structure, and patience.
Professor Bao said that three reasons lead to the global trade war. First, it is an outcome of the game among major powers; second, it is an outcome of the game between East and West; Third, it is an outcome of the game between different patterns. Major powers’ game can be weighed from their elite levels, decision makers, social levels, allies and trade revivals.
Professor Bao said that the US will not win and China will not lose in the trade war. There are some reasons why the US will not win: Insufficient power of US; Rigid strategies are and old-fashioned thoughts; being kidnapped by the election; Internal conflicts among allies and their credit deficit; going against the trend and violating the rules of trade development.
He gave some reasons why China will not lose: China`s power is rising and its ability is getting superior; The strategies are flexible and thoughts are ahead; Time is sufficient; China has its partners’ support; China’s actions follow the trend and take advantages of the opportunities.
He then speculated that the probability of a major economic crisis in the three years from 2018 to 2020 is high, but it is not necessarily inevitable. It needs to be further observed and judged according to the subsequent development of the trade war. He mentioned that after the 19th National Congress of the Communist Party of China, the ruling team represented by General Secretary Xi Jinping demonstrated outstanding strategic responsibility in six aspects.
First, firmly safeguarding trade liberalization and becoming the defender and promoter of global free trade and civilization. This is related to China`s worldism and world care. Chinese traditional philosophy advocates a family in the world.
Second, promoting the construction of China`s “Belt and Road”. It is a strategic measure to stop the trade war.
Third, strengthening and expanding China`s manufacturing industry, while constructing a new global industrial chain system, supply chain system and value chain system.
Fourth, promoting the construction of a new international currency system. Rethinking China`s reserve currency system and exchange rate.
Fifth, promoting the construction of an open world economy. Without an open world, there is no open world economy.
Sixth, promoting the construction of a community of shared future for mankind. The report of the 19th National Congress of the Communist Party of China puts forward the construction of a community of shared future for mankind, especially the economic destiny of the people of all countries. This is also the responsibility as a great power.
Finally, Professor Bao proposed China`s strategic options, emphasizing a global perspective and long-term strategic plan.