Trade war: China, US tensions will persist despite phase one deal, says renowned scholar

The interim deal, announced last week, is a ‘good thing’ according to National Economic Research Institute director Fan Gang

But a mainstream view among Chinese government researchers is that the United and China are engaged in a rivalry that ‘won’t be fixed as quick as five to 10 years’

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Fan Gang is the director of the Beijing-based think tank, the National Economic Research Institute. Photo: Xinhua

Published: 2:09pm, 19 Dec 2019Updated: 2:09pm, 19 Dec 2019

China’s phase one deal with the United States will neither lead to balanced trade nor end a broad rivalry between the two countries, according to an influential Chinese researcher.

The interim deal is expected to see China significantly increase purchases from the US, and while Fan Gang – who is the director of the Beijing-based think tank, the National Economic Research Institute – believes it is a good thing for the two nations to manage the ongoing conflict, he is not optimistic about the future of the general bilateral relationship.

“The phase one deal is certainly a good thing, but we need long-term views because the [bilateral] problems may not be sorted out in the short-run,” Fan told the Sinopec Capital Annual Forum in Beijing on Wednesday.

Fan, who co-founded the influential Chinese Economists 50 Forum together with Vice-Premier Liu He and central bank governor Yi Gang in 1998, cited the history of the US’ rivalry with Britain, the former Soviet Union and Japan in suggesting that the competition between Beijing and Washington will be long term.

The phase one deal is certainly a good thing, but we need long-term views because the [bilateral] problems may not be sorted out in the short-run

Fan Gang

“It won’t be [fixed] as quick as five to 10 years,” Fan added.

His comments joined a widely shared view among Chinese academia that China and the US are now locked in a broad economic and geopolitical rivalry that could last well beyond the term of US President Donald Trump.

Chen Deming, China’s former commerce minister, said this month that a trade deal would not change the trajectory of the US-China relationship of “fighting while talking”.