China could end the trade war by taking steps to ease other countries’ fears over globalisation
As Winston Churchill once said, “If we open a quarrel between the past and the present we shall find that we have lost the future”. The same sentiment can be applied to the ongoing US-China trade war, where the principal concern of the feuding parties must be with the future rather than squabbling over the past or the present.
As the world order is rapidly changing with localisation and nationalism on the rise in most countries, it would be unwise on the part of Chinese leaders to ignore these signs and continue to believe in the rhetoric created by the Chinese media, citing themselves as victims and the US as the aggressor. While the rhetoric might generally work for the Chinese people, it would probably have little value for people outside China, given that their culture, values and beliefs are so vastly different. Hence there is a need for President Xi Jinping to have a global perspective and tailor communication accordingly.
As China has been the biggest beneficiary of global free trade, it needs to develop empathy towards other countries that have been negatively impacted by the shift in the global trade order over the past 30 years. The people who have suffered due to loss of manufacturing jobs in their respective countries form the core base of Trump supporters as well as several far-right parties in Europe that are becoming more popular by the day.
The crisis Europe is facing right now can arguably be attributed to globalisation. Germany is the only country in Europe that continues to do well having preserved its core manufacturing base compared to other nations which transferred all their manufacturing offshore, resulting in the severe job losses and high unemployment rates that cause unrest and unstable social and political environments today.
Watch: US-China trade war – 105 days and counting
China, for its part, can take several positive steps that would dispel the notion that while it continues to take advantage of the global trade order by exporting goods to other countries, it does not reciprocate appropriately by lowering its trade barriers. It can earn goodwill by taking some concrete steps right away: first, coming up with new regulations that enforce intellectual property rights; second, offering to buy more agricultural and energy products from other countries; third, reducing state subsidies; and fourth, making it easier for other countries to invest in China and providing a level playing field.
While everyone might end up losing if the current trade war carries on for much longer, as the ZTE example recently showed, the US is much better placed right now to exert maximum damage on the Chinese economy. The bigger danger to China, however, is a scenario in which the trade war drags on indefinitely, enabling the US to forge a coalition with European countries, who are under pressure for political reasons amid growing nationalism and anti-global sentiments, against China. That would be disastrous and could undo all the benefits China has seen over the last three decades.
As Chinese leaders aspire to greatness for their country, they could benefit from keeping in mind another famous quote from Churchill: “The price of greatness is responsibility.”
Arun Garg, Taikoo Shing