HONG KONG: Trade tariffs may be getting the most attention, but the conflict between the United States and China is actually being fought on multiple fronts, including exchange rates, technology, cyberspace, and even arms.
This does not bode well for the world’s capacity to confront shared challenges, from migration to climate change.
According to Bob Woodward, the doyen of Washington journalists, the modus operandi of US President Donald Trump’s administration is “maximise aggression to conceal vital weaknesses.”
Indeed, when it comes to China, Trump is betting that a hostile tone, backed by reckless but impressive threats, will divert American voters’ attention from serious domestic problems ahead of November’s mid-term elections.
CHINA’S LONG GAME
This short-sighted strategy contrasts sharply with the long game being played by the Chinese authorities.
Though the Shanghai Composite Index has fallen far more than the Dow Jones Index, reaching its lowest level since November 2014, China is keeping the renminbi from depreciating so much that the US would label the country a currency manipulator.
Meanwhile, China is working to steel its economy from a hostile external environment, as it engineers a transition to a more innovative, inclusive, and sustainable growth model.
To advance this effort, China’s leaders are engaging the private sector, which, as Vice-Premier Liu He recently acknowledged, accounts for more than 50 per cent of tax revenues, 60 per cent of GDP, 70 per cent of technological innovation, 80 per cent of urban employment, and 90 per cent of new jobs and companies.
READ: China has outgrown the world market, needs to rebalance economy, a commentary Chinese Vice Premier Liu He (C) attends the EU-China High-level Economic Dialogue with European Commission Vice President Jyrki Katainen (not pictured) at Diaoyutai State