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Outlook for quick solution to US-China trade war is grim

2019-06-17

Source: Global Times    Published: 2019-6-13


Even as US President Donald Trump appears to be pushing for a restart of the deadlocked trade talks, many experts in China remain pessimistic about a quick resolution for the escalating trade war for the US government is unlikely to make compromises.


At a panel discussion at the prestigious Tsinghua University Thursday, a dozen prominent experts painted a grim outlook for the two superpowers to resolve their tensions because the trade issues  have expanded to cover technology rivalry and issues of broader strategic implications.


"We cannot be too optimistic about [the trade negotiations] because being overly optimistic in dealing with those people who have no (moral) bottom line will be a disaster," Wu Xiaoqiu, vice president of Renmin University of China, told the panel hosted by Tsinghua's Academic Center for Chinese Economic Practice and Thinking (ACEPT).


Wu said that he and many others in China were looking forward to the two sides eventually resolving their trade spat through negotiations, but recent developments have increasingly shown that the trade war is a part of the US broader strategy of containing China.


After the US stubbornly refused to make compromises during the talks and has lately launched assaults on Chinese tech firms, many in China get to believe that even if the trade talks settle down one day, the US government will not change its intentions to contain China's rise.


"The room for negotiations is limited," he said, noting that the trade war could wade into more areas, including more sanction measures against Chinese companies. "We cannot rule out such a possibility and we must be prepared for the long-term."


Despite the tough rhetoric, US officials have in recent days appeared to be pushing for resuming talks. Trump has again threatened to impose 25 percent tariffs on $300 billion worth of Chinese goods if President Xi Jinping does not agree to meet with him at a G20 summit later this month in Japan.


Chinese officials have not disclosed any plans for such a summit meeting and some experts believe that the chance of breakthrough is very slim.


"We have been too nice to the US [in the trade talks]," said Chen Qi, an expert in China-US relations at Tsinghua University, noting that the US has been unreliable and even hostile throughout the negotiation process because its intention is clearly to create difficulty for China.


Such intentions are fueled by US envy and uneasiness toward China's rapid economic development, and ignorance of its past disastrous tariff policy, said Professor Li Daokui, dean of ACEPT and a former advisor to China's central bank.


"China should do more to shoulder the responsibility of safeguarding economic globalization," Li told the panel, noting that if the US continues on its anti-globalization path, China could take measures against US companies, including removing equal treatment for them in China in favor of firms from other countries.


As the US continues to raise the stakes in the trade war by threatening more tariffs and blacklisting Chinese technology leader Huawei, the trade war poses serious risks to the global value chain and cause ruin the recovery of the global economy, the experts warned.


If the global value chain were broken up by US actions, it could trigger a global financial disaster of similar scale to the financial crisis in 2008, said Ju Jiandong, an expert in finance at Tsinghua University.


"This will be irreversible damage for the global financial market and the US administration should closely study the impact if the global value chain were to be broken," Ju said.


Wu Xiaoqiu is vice president of Renmin University of China.

Key Words: China   US   trade   Wu Xiaoqiu  

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