If history is any guide, a trade war does not serve the interests of either side since it won't produce a winner.
Some disdain this claim, and among them is the boisterous figure, Steve Bannon, an ultra right-wing opinion leader who served briefly as the former White House chief strategist. The Washington Post recently published a piece from Bannon where he asserts that China "has been waging economic war against industrial democracies", and said the trade dispute is "a fundamental clash".
On the contrary, China is working to promote global development with a variety of initiatives. China's
Belt and Road Initiative (BRI) is a well-received international measure aimed at boosting healthy global development. Within five years, it has evolved from the concept stage to a key platform centered on building a community with a shared future for humanity. Over 100 countries and organizations have signed BRI cooperation agreements with China, extending the initiative's scope from Eurasia to Africa, Latin America to the Caribbean, and the South Pacific region.
Bannon even attributed the technological edge that a few Chinese companies have over their US peers to "the cost savings won by stealing the intellectual property, technology, and innovations of foreigners". He also claimed that the world's second-largest economy advances on the tech ladder through theft and plagiarism. Any rational individual with a modicum of economic prowess would understand such a claim to be baseless and nonsensical.
Since China's reform and opening-up four decades ago, the country has established and improved its research support system dedicated to enhancing innovation capabilities through increased financial support, thus guiding investments into relevant sectors. The Global Innovation Index 2018 (GII), an annual report co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO), revealed that China has featured in the top 25 group since 2016 and has consistently moved upward in the rankings to 17th in 2018. How telling is it that China is the only middle-income country listed among the top 20 most innovative economies globally?
Bannon's repeated rhetoric on China's goal "to be the global hegemonic power" reveals an outdated Cold War mindset. He even interpreted the Chinese proposed BRI as a "master plan to become an economic hegemon", while ignoring the win-win benefits already shared by lots of nations. In fact, BRI has consistently upheld its noncompetitive and nonexclusive nature to the fullest extent.
Chinese President Xi Jinping noted during the recent Conference on Dialogue of Asian Civilizations, China is committed to building a community with a shared future for Asia and humanity: treating each other with respect and as equals; appreciating the beauty of all civilizations; adhering to openness, inclusiveness, mutual learning; and keeping pace with the times.
It's obvious that Steve Bannon is attempting, and rather clumsily at that, to use greed and fear as the blueprint for US-China policy. What Bannon is advocating hurts not only the interests of China, but also the interests of America. A recent study from US economists shows how the additional tariffs cost US consumers and importers $4.4 billion every month throughout 2018. And yet Bannon used the US economy annualization rate of 3.2 percent in the first quarter to legitimize the trade tariffs, ignoring the added burden that US citizens would be required to carry.
It's worth nothing that, most Americans do not want a clash with the world's second largest economy. While President Trump promised he would deliver financial relief for affected farmers, many farmers responded by saying they wanted trade, which offers consistent benefits, and not aid, which is only temporary.
The relationship between China and the US is undoubtedly complex. But as history has already revealed, the two economies would stand to gain from cooperation. The rational option for both countries is to solve problems through engagement, rather than igniting a 21st century Cold War.
