Ray Dalio book reveals top negotiator Liu He feared ‘tit-for-tat escalations’ before US-China trade war began
- The prominent hedge fund manager’s upcoming book about the rise and fall of empires touches on China’s deteriorating relationship with the United States
- ‘While Americans fight for what they want in the present, most Chinese strategise how to get what they want in the future,’ Dalio writes
When China’s top trade negotiator, Vice-Premier Liu He, walked into the Oval Office to meet US President Donald Trump in May 2018, he was not concerned so much with the outlook of trade negotiations as he was with the potential for escalating disputes between the world’s two largest economies.
That bit of prognostication was one detail from American billionaire hedge fund manager Ray Dalio’s upcoming book, The Changing World Order, about the rise and fall of past empires. In it, he dedicates a chapter to China’s history and currency, and another to the Sino-US relationship.
Dalio described Liu as “a skilled, wise, humble and likeable man”, and said the two became friends over the years. After his meeting with Trump, Liu spoke with Dalio and expressed deep concerns over the possibility of a worsening relationship between the two superpowers.
“He explained that, going into his meeting with Trump, he was concerned about how it would go, not because of the trade negotiations, which he was confident didn’t have any issues that couldn’t be worked out, but because he was concerned about the worst-case scenario where tit-for-tat escalations could get out of control and lead to more serious consequences,” Dalio wrote.
Liu’s thinking, as revealed by Dalio, partly reflects the fear among top Chinese leadership in the early days of the high-level trade negotiations. And that fear has become a reality now that the relationship between the two countries has deteriorated to the worst point in decades.