– Last time, China kept the powder dry. Now China can respond with everything they have, says Scott Kennedy. For over 30 years, Scott Kennedy has followed China. The political scientist is one of three researchers news has asked to say what we can expect when it is again Xi and Trump who will lead the world’s two superpowers. This is an attempt to make you wiser. Wondering how the world is going? A place to start is to ask how will US-China relations fare? The world’s two superpowers. This is news’s expert panel: Scott Kennedy, senior advisor, Center For Strategic and International Studies, USA Bich Tran, researcher, international relations, National University of Singapore Jo Inge Bekkevold, senior advisor, Institute for Defense Studies, Norway In this case you can read: And finally : – There are no panda huggers among Trump’s chosen ones. Scott Kennedy talks about China’s famous national animal and often most charming “ambassador”, the panda bear. Kennedy also talks about appointments that show that China is central to Trump’s delivery of his promises in foreign policy. Marco Rubio, whom Trump wants as secretary of state, has been blacklisted twice by Beijing. It is uncertain whether he is still denied entry to China. Mike Waltz, who is wanted as national security adviser, is considered one of the toughest China hawks in Washington. Scott Bessent, one of Trump’s biggest donors in the election campaign, is tipped to become finance minister, while Howard Lutnick, who is a strong supporter of high tariff walls, could become trade minister. Both will be central to the implementation of Trump’s policy of putting the United States first in the economic field. A group of candidates who have early identified themselves for top jobs in Trump’s new administration. Among them you will find Marco Rubio, Mike Waltz and Elon Musk. Photo: AFP In sum, Trump’s first choice of ministers signals a view that US trade with China has an inherent risk. It serves China and not the US. China is seen as a threat to the US and the international system. Will inflict pain on China When Joe Biden became president, he took over the trade and tech war Trump started in his first term. But Biden tried at the same time to have a dialogue and agree with China on a “railing” that both China and the US could govern by. Biden and Xi agreed to work against rising seas. Climate activists placed these two photographs in the water crust on the beach in Rio just before the G20 meeting was due to start. Photo: AFP Trump’s chosen men have shown little interest in this “railing”. Scott Kennedy believes China will take an even harder line shortly after Trump moves back into the White House. – I think we will see the introduction of high punitive tariffs very early in Trump’s new government period. This along with a whole range of other tools that they will use to inflict pain on China. The US will limit China’s ability to develop technology and try to narrow China’s cooperation with other countries. Several countries may feel forced to choose between the US and China. – I don’t know if anyone will call this the second Cold War or Cold War 2.0. There is already a strong increase in the tension level, says Kennedy. Researcher Jo Inge Bekkevold leaves no doubt. – Yes, we are on our way into a form of new cold war. When Biden became president in 2020, he said that no relationship between two countries is more important to the world than the relationship between China and the United States. Now it is possible to say that no relationship between two people is more important to the world than the relationship between Xi and Trump. – Are we witnessing the fiercest power struggle of our time? – Absolutely, because the rivalry between the US and China is the first power struggle between superpowers since the Cold War. – Despite the fact that Russia poses a significant security threat to Europe, China – seen from Washington – is the biggest challenge to the USA’s national security and international order, says Jo Inge Bekkevold. Last handshake. Next will be with Trump. Xi pledged to work with the new US administration when he met Biden on the sidelines of the APEC meeting in Peru. Photo: Reuters How will China respond? In 2019, Trump blacklisted Chinese tech giants such as Huawei and made Western countries choose 5G networks from non-Chinese companies. Beijing used strong words, but responded only with reciprocal punitive tariffs on a few goods. The hope was that it was still possible to have a robust trade with the United States. Now it could be different. Trump has threatened 60 percent tariffs on Chinese goods. – If China concludes that Trump’s goal is to disconnect China, then they will see this as economic war. If they interpret it that way, they can get a much more persistent response, says Scott Kennedy. – Not limited to tariffs, but to a whole range of other types of actions that impose costs on the US. In the economic space, diplomatic and security policy. China will respond as hard as they can. Will the US or China win? According to Bekkevold, both the US and China will now put security interests ahead of economic growth. In China’s case, there is a rather dramatic shift in political priorities that has occurred under Xi. – In principle, China is less equipped than the US for a long-term trade war. The US has a larger domestic market, is better at innovation, and the US dollar has a stronger position as a means of payment than the Chinese yuan. – However, China has an advantage over the USA in terms of industrial production capacity. – China’s role in global value and supply chains means that a trade war will also affect the US and Western economies, says Bekkevold. Cheaper and better. Batteries and electric cars are two areas where the US and the EU fear too much Chinese dominance. Photo: AP China more vulnerable China is better prepared, but it is also more vulnerable than when Trump won the election for the first time in 2016. After the pandemic, China has struggled with uneven and weaker economic growth. – In addition, there is great anxiety in companies and households when it comes to the economy. I think the trust in China [til egen økonomi] has fallen. The tension with the US and the West fuels the uncertainty. – China should not be overly confident in its ability to fight back. Some of the ways they can choose to respond can create more domestic anxiety, which in turn can have other unforeseen consequences for leadership, says Kennedy. Livreima can decide A trade war will cost. In both China and the West, people will feel the consequences. – In the event of a prolonged trade war, it will also play a role which political system and society is able to tighten the belts the hardest, says Bekkevold. The good life in Shanghai. Most Chinese have experienced a rise in prosperity and are worried that the economy is deteriorating. Photo: Reuters Trump does not always distinguish between friends and rivals. – Basically, the US can lean on allied countries with large economies, such as Japan and South Korea in Asia and Germany and France in Europe. This advantage could be weakened if Trump imposes high tariffs on allies as well. Can the US step wrong? In a cold war with China, the US will need supporters. In Asia and Europe. A country that is much closer to the United States now than a few years ago is Vietnam. Like China, they are ruled by a communist party, but have a deep skepticism about their giant neighbour. Vietnam has had strong growth partly because several international groups choose to produce there rather than in China. Researcher Bich Tran is from Vietnam herself. She says there are opportunities and traps. – Trump does not care about democratic values. This can reduce the contradictions with a country like Vietnam and make cooperation easier. However, criticizing China because it is ruled by communists can also unsettle Vietnam’s leaders. Trump’s last secretary of state did just that. – Harsh comments that Mike Pompeo made in 2020 will not help the relationship between the US and Vietnam. Washington should focus on what China is and is doing today. Considering Vietnam, they should avoid harmful comments about communism, says Bich Tran. Like Japan and South Korea, Vietnam depends on exports and has a large trade surplus with the United States. – Another challenge is that Trump is likely to politicize the US trade deficit with Vietnam and threaten to raise tariffs on Vietnamese goods, says Bich Tran. Female workers sew casual wear for an international brand. Vietnam’s trade surplus with the US has tripled since 2017. Photo: AFP Will the US isolate itself more and China less? It is not a given that the US will succeed in isolating China. The US can itself be left a little more alone. There is a tipping point for several of America’s allies. For countries that do not wish to take sides, this point will kick in earlier. – I believe that if the US were to change from a strategy to limit risk to disconnect from China, it would face opposition from countries that believe it is possible to reduce risk and at the same time have robust trade with China. – If this difference is allowed to play out, it will lead to greater friction and give China opportunities not only to continue developing technology, but potentially instead of being isolated, China will see that the US is left more isolated than the US itself wants, says Scott Kennedy. Jo Inge Bekkevold emphasizes that there are important differences between the new Cold War and the old one. The struggle for power is less ideological and less polarizing. The split is more about finances. The arms race is not as intense as between the Soviet Union and the United States. Neither the US nor China spend anywhere near as much on weapons as the US and the Soviet Union did. But the new Cold War is less predictable. – There are many indications that the USA’s rivalry with China creates more instability than the USA’s rivalry with the Soviet Union during the Cold War. There is, for example, a greater degree of uncertainty linked to conflict escalation, says Jo Inge Bekkevold. One example is the self-governing and democratic island of Taiwan, which China has said it will reunite with the mainland, if necessary by force. – Taiwan is in the middle of the geographical core area for the US-China rivalry, says Bekkevold. What role can Elon Musk play? Elon Musk is also at the heart of the power struggle. The world’s richest man is on both sides of the trade war. Tesla is deeply invested in China and opened its third Giga factory in Shanghai. X, formerly Twitter, is locked out of the Chinese market due to the Chinese firewall and China’s censorship rules. Musk’s new AI startup X-AI could gain a huge market in China. In China, Musk is a super celebrity with a huge fan base. – There is enormous curiosity about Musk, says Scott Kennedy. Musk has direct access to both Trump and China’s no. 2 Prime Minister Li Qiang, perhaps Xi Jinping’s most trusted man. Trump, the artist Kid Rock and Elon Musk pose for the camera 11 days after the election victory. They saw a “UFC mixed martial arts” match at Madison Square Garden, New York. Photo: AFP Both Bekkevold and Kennedy believe Musk can play a role as a facilitator of dialogue. Bekkevold points to four possible outcomes. Trump forces Musk to pull out of China. Musk persuades Trump to make exceptions for his investments in China. Other American companies will then ask for the same. China kicks Tesla out of the country in response to US tariffs on Chinese electric cars. China benefits from using Musk as a useful link to Trump. Can Trump and Xi make a deal? Are the threats of 60 percent tariffs on all Chinese goods a starting point for negotiations? Will Trump attempt a deal? Scott Kennedy believes the chances of a deal would have been greater if Kamala Harris had won, but even then a deal would have seemed far off. For that to happen, China must put things into the pot that will fundamentally change today’s China. – China can open up providing market access in industries where it is closed, including for social media. They can make changes to the Chinese firewall. This is the firewall that shuts out Google, Facebook, Musk’s X and almost all Western internet giants. – The US can offer to remove punitive tariffs. Advocating for a graduated security protection aimed at Chinese companies rather than banning them. For example, for the Chinese pharmaceutical industry or electric cars. – There are several ways forward for both sides, if they put their heart into it, says Kennedy. Published 23.11.2024, at 08.16
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