A worker makes plane parts inside a Boeing plant in North China's Tianjin Municipality. File photo: VCG

The China-US trade war may be just between two countries, but its implications will be global and if it continues to escalate and expand, it could trigger a major recession and global financial crisis more severe than the one in 2008, top Chinese experts warned on Thursday.

At a panel discussion at the prestigious Tsinghua University, nearly a dozen prominent experts painted a grim outlook for the two economic powers to resolve their trade tensions because of the US' clear ill-intentioned strategy to contain China's rise, despite US officials' recent push for breakthroughs for stalled trade talks.

Global implications

"The biggest victim in the China-US trade war is neither China nor the US, but the world as a whole, because it will disrupt the global division of labor completely," Liu Taoxiong, an expert with Tsinghua University's School of Social Sciences, told the panel. "By launching a trade war with China, the US is sacrificing the interest of the entire human race to achieve its selfish 'America First' intentions."

Following several rounds of what officials on both sides described as constructive talks, the US last month broke a months-long truce by increasing tariffs on $200 billion worth of Chinese goods and blacklisting Chinese firm Huawei, rattling global markets and infuriating many in China.

If the trade war continues to escalate, it could drag the world economy into a depression more serious than in the 1930s, when the US' Smoot-Hawley Tariff Act led to turmoil in global trade and the Great Depression, according to Li Daokui, dean of Tsinghua's Academic Center for Chinese Economic Practice and Thinking.

"The US has two sicknesses: jealousy of China's rise and ignorance of the disastrous past," said Li, who hosted the panel discussion, noting that launching a trade war with China is like launching a war with the global value chain and globalization.

If the global value chain is broken up by US actions, it could trigger a global financial disaster worse than the financial crisis in 2008, said Ju Jiandong, director of the Center for International Economic Research at Tsinghua.

"This will cause irreversible damage to the global financial market and the US administration should closely study the impact if the global value chain were to be broken," Ju said, adding that Asian economies, particularly Taiwan, must pick the "right side" or they could lose China's massive market.

Grim outlook

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

At a press briefing on Thursday, Gao Feng, a spokesperson for the Chinese Commerce Ministry, said that he has no information about trade talks between China and the US. Gao also warned that there is no winner in a trade war, and the world economy could face a recession. Chinese officials have maintained that, though they are open to talks on an equal footing, they will not back down on core issues of principle.

At the panel at Tsinghua, experts were overwhelmingly pessimistic about a quick resolution to the trade tension, pointing to the US' clear strategic goal to contain China's rise rather than focusing on trade issues.

"The room for negotiations is limited," said Wu Xiaoqiu, vice president of Renmin University of China. "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 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 part of the US broader strategy of containing China and it could spread into more areas and become a full-fledged economic war.

For China, although it is of utmost importance to protect its interests, it is also necessary to bear the responsibility of safeguarding  multilateralism and globalization, analysts said.

"China is on the right side of multilateralism and thus better-positioned to win the battle against the US' unilateralism, which is opposed by many countries around the world," said Bai Chongen, dean of the School of Economics and Management at Tsinghua. "The US' unilateralism has little support and will not succeed and its goal to defeat China through a Cold War will not succeed."