Editor's Note: "From Hong Kong to Asia: Decoding the Growth Code of High View Investment Over 30 Years - New Book Sharing Session of 'Forged by History'" hosted by CITIC Press Group was held on May 9th. At the meeting, Li Cheng, professor of political science at the University of Hong Kong and former director of the John L. Thornton China Center at the Brookings Institution, shared his views on the current Sino-US relations based on his past experiences.

This article is compiled from part of his sharing in the dialogue session, organized by Guancha.cn, and has been reviewed by the author for your reference as readers.

Speech scene

[Speech by Li Cheng, organized by Guancha.cn]

I

Regarding the highly concerned Sino-US trade war and related negotiations, various signs indicate that there is a greater possibility for both sides to reach a deal within the next few months. International economic relations are influenced by many events; if there are no special circumstances, it is possible to reach an agreement within a few months.

If we predict the negotiation results, I think the following situations may occur:

First, both sides are likely to claim achievements, especially Trump will not admit losing.

Second, both sides may make concessions on the issue of tariffs.

Because China has been preparing for countermeasures, after all, a tariff rate as high as 60% or even higher could happen. Although tariffs are important and can have significant impacts on enterprises, finance, and stock markets, from the perspective of the overall country and macro Sino-US relations, there are at least six or seven issues for China that are no less important than the tariff issue.

For example, the Taiwan issue, the interruption of educational cooperation - during Trump's first term in office, there were related controversies, and in 2018, the White House once discussed banning Chinese students from studying in the US, although this resolution was later rejected, but there is still uncertainty in the future. Moreover, the US may also propose unreasonable demands such as China compensating for the pandemic, and even attempt to promote a comprehensive decoupling.

In other words, for China, the US is no longer the top priority in its foreign policy or trade. Three or four years ago, China had already begun strategic shifts, promoting the domestic and international dual circulation strategy, and at the same time focusing on ASEAN and the EU as key priorities, all of which are preparations made to cope with the current situation.

By 2022, an average of 42 trains traveled daily between China and 200 European cities. Image from "Decoding Ten Years".

Therefore, from the pressure perspective, the US faces more pressure. The US is approaching Halloween, Thanksgiving, and Christmas, three important holidays. If goods supplies cannot keep up, what happens when shelves are empty? Moreover, the current problems in the US, inflation is just a symptom, the more important issue is the confidence of the US public in its stock market and debt, after all, China holds a large proportion of US debt.

Trump appears tough on China, but his actions reveal a willingness to cooperate. For example, at the "China Development High-Level Forum" (CDF) held in Beijing in March, the US sent at least four people to convey messages, including Senator Steve Daines, who even met with Premier Li Qiang. However, after the senator reported back, Trump went back on his word, stating that the focus now is on tariffs and demanding concessions from China - Trump tends to go back on his word, while China is more consistent in this regard.

In fact, Trump's demands on China are comprehensive, not only involving the economic field, but also international affairs, such as cooperation in the Russia-Ukraine war, the Middle East issue, and the North Korean nuclear issue. Trump has always yearned to win the Nobel Peace Prize, and opening up these international affairs with China is crucial to achieving this goal. Therefore, it cannot be ruled out that he may visit China later, and once he does, the entire situation may change.

In summary, considering multiple factors, I believe that it is possible for both sides to reach a deal on the issue of tariffs.

During his first term (in 2017), when Trump visited China, he toured the Forbidden City with his wife Melania. Image from AFP.

II

It is worth noting that the attitude of the US president is just one aspect of Sino-US relations, while the structural contradictions between the two countries are more critical issues.

The current round of tariff war and trade war is essentially a battle that may end within a few months; while the competition between the two countries is more like a long-lasting economic competition that will continue for quite some time.

I am very worried about this process, which requires time to resolve contradictions. You ask whether the US will change, I believe it will eventually change, but change is not immediate, it needs time to settle down. In fact, there is complementarity between China and the US in many aspects, even in the technology sector. However, the US fails to see this.

I think Kissinger's view makes sense, he said that in the course of history, the two countries rarely appear in a situation where their strength is completely equal. In other words, China will not replace the US, nor will the US replace China, the two are not zero-sum game relationships. Some people also put forward the view that "if the US cannot defeat Huawei, how can it defeat China", which also reflects this fact from the side.

If a military conflict really breaks out between China and the US, it will be a catastrophic disaster, and AI technology is likely to be involved. The Ukraine-Russia war is just a localized war, while a conflict between China and the US would be a total war, which is a situation we absolutely do not want to see. Such a war brings no benefits, and we must make every effort to avoid any accidental incidents. Therefore, strengthening communication is crucial, and the current negotiations are of great significance.

Of course, to some extent, the Cold War between China and the US has quietly started, only the form is different from before. Moreover, China is not the former Soviet Union, and the result of Sino-US relations will not end like the US-Soviet relations with the dissolution of the Soviet Union. As mentioned earlier, the key lies in avoiding falling into this kind of confrontation situation between the two countries, because there is no fundamental conflict between them, it is not a life-or-death opposition, and there is no question of one replacing the other - misunderstanding and baseless fear play a great negative role in this.

I believe that the conflict between China and the US is avoidable, but solving these problems requires time. Churchill once said, "Expecting Americans to do the right thing will take them trying all the wrong things first." Nowadays, Americans' understanding of China is extremely scarce, which can be seen from the small number of American students studying in China. Therefore, this process may take around ten years.

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Original article: https://www.toutiao.com/article/7504084765272834595/

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