US-China trade war offers Beijing a historic opportunity to forge a new global order

Tian Feilong says the trade stand-off with the US is a test of China’s capabilities. It is a hurdle it must overcome to realise its goal of national rejuvenation and its vision of a ‘community of common destiny’

PUBLISHED : Friday, 13 April, 2018, 1:07pm
UPDATED : Friday, 13 April, 2018, 7:41pm

trade war between the United States and China is brewing, and any outbreak will have a major impact on the global political and economic order. 

This is not the first time the US has had to face down challenges from the so-called “second world” economies. Some 30 years ago, it used similar tactics against the Soviet Union, and also Japan, with some success. But if the US is expecting a similar result with its salvo against China, it is likely to be disappointed. 

The backdrop to the trade row is China’s rise and the threat it is posing to US global leadership. The two countries are caught in a Thucydides Trap, which warns of the hostilities that may come when an established power is confronted by a rising one. 

After 40 years of Chinese reforms, the West has finally realised that there will be no systemic change in China towards a Western democratic model. In fact, in the wake of President Xi Jinping’s report at the 19th Communist Party congress last October and the amendments to the Chinese constitution made last month, the West can see even more clearly how China is taking charge of its own development and the threat that this poses. The grand rhetoric and determined tone of the reports presented at these meetings have opened Western eyes to a vision of China’s development in the next three decades, and of the strategic consequences it may suffer if it fails to contain China’s rise. 

China is on the rise, but not as a hegemon

There are reasons why the West regards China as a looming threat. First, the “China collapse” theory that has been circulating in the West for years has been repeatedly proved wrong, sowing uncertainty in Western minds about the soundness of its judgment. Moreover, instead of collapsing, the Chinese have developed a political model based on authoritarian rule of law that has paved the way for modernisation in China while posing a challenge to the ideology of Western democracy. 

The great unravelling of a US-led global order

The West is also wary of China’s growing economic power. Beijing’s ambitious “Belt and Road Initiative”, especially, challenges the Western-dominated global economic order. This makes competition between China and the West inevitable. 

There have been two main responses to the skirmishes thus far in the trade row. 

Most people, including the intellectual elite, have accepted the legitimacy of China’s new road map

One is shared by most Chinese people. They support the government’s stance and the campaign for national rejuvenation. Their response is rational and politically mature. 

Second, a small number of liberal scholars support the US stance, and believe that China will lose in a trade war. They think China has taken a wrong turn in its development and want the US to intervene in China’s reform. 

After 40 years of reform in China, the ruling Communist Party has changed. In the past, it kept a low profile and tried to learn as much as it could. Today, its self-confidence brimming, it has taken on the responsibilities of leading a national renaissance and contributing to global governance. 

Nationalism is on the rise. At the same time, the liberal thinking that sprouted in the early days of the reforms is dissipating and losing its power. For some scholars and regular folk, the change has come too fast. Some are vainly fighting it. But most people, including the intellectual elite, have accepted the legitimacy of China’s new road map. 

Due to China’s progress and the solidarity of its people, America’s threats have so far not had their intended effect on China. By contrast, given the current disagreements and other difficulties within the US government and society, a trade war may well add to America’s problems. 

In a war of escalation, both sides would find it hard to back off. But the US has more to lose. The Chinese economy today is highly integrated with the world economy. The US is a large but declining market. If its trade threats have no effect, it will lose credibility as a hegemonic power. 

What we have here is a game of strategic bluff, and China’s strategic determination and stamina to fight back are being tested. Whoever folds first will lose. This crisis can be compared with the South China Sea arbitration row between China and the Philippines. Experience shows that when China persistently counter-attacks and protects its rights, it can succeed in checking the US. 

China and the Philippines chart course towards a calmer South China Sea

As a businessman, US President Donald Trump might try to negotiate at some point, while seeking the best price for the US. The Chinese countermoves are a way to keep this price as low as possible, while safeguarding Chinese sovereignty, security and developmental interests. 

The trade row offers China a historic opportunity to shape a new world order. 

First, by taking a positive approach, Beijing can show the world it is committed to free trade, and that it will abide by World Trade Organisation rules and a development ethos of mutual gain. The world will then know that the US is the troublemaker who breaks the rules and causes other countries to suffer losses. 

At Boao, Xi Jinping shows the world a grown-up China

Second, China can take the opportunity to overhaul domestic industries, enhance economic cooperation through its belt and road plan, and increase cooperation with economies outside the US, thus accelerating the formation of a new global economic order. 

Third, based on this experience, China can forge a path for the formation of a “community of common destiny”, in the interest of lasting peace. 

Fourth, China’s moves in response to the trade row and any related problems will offer indirect proof of the timeliness of its constitutional amendments, passed by the legislature in March. The crisis will also test the effectiveness of its governance system. 

In short, how China meets the challenge of the trade war can provide an endorsement of the achievements and development potential of its governance system, after 40 years of reform and opening up. It is a historic test of its capability. China must overcome this hurdle if its rejuvenation is to materialise, and every Chinese must do his or her part. 

The trade war is also happening at a time when the “Eastern global order”, which has been suppressed for centuries, is beginning to revive, to lead the next phase of globalisation. And China is at the pivot of such a transformation. Thus, the trade war may bring pain, but it is the pain of childbirth, as it will usher in a new age defined not just by China’s rejuvenation, but also by a community of common destiny for humankind. 

Tian Feilong is an associate professor at Beihang University’s Law School in Beijing. This is translated from Chinese