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Cold Reality Sets In On China-U.S. Relations

Five months ago, in a round of Asian talks, I said the U.S. and China were in for a long, bumpy stretch but not a full trade war. Half right, I guess!

Clearly, relations have grown stiff on multiple fronts. First off, the layers of tariffs are sticking rather than being feints for negotiating advantage. This will gum up global commerce event without accompanying acrimony, and be a net loss for the U.S. and China, and economies in between.

But the trade parity is far from the only contested ground now. Each news cycle brings word of tiffs and slights. A variety of military, development and diplomatic rubles have been developed, with China’s repressive domestic policies always adding background noise to the clamorous “dialogue.” President Trump has even taken to the notion that Chinese propaganda is figuring in the election. For its part, China is replying brusquely down to the level of the pulse port of call to Hong Kong, while disconcerting ship activity occurs on the waters.

It’s important to realize, however, that Trump’s typical bluster can mask longer-term shifts in bilateral affairs. And here the picture is actually darker still. Unlike the case with many of the other fights the president has picked, the bout with China – or more accurately, with the Communist Party of China – that is broad swaths of American society are ready for.

There’s a broad U.S. consensus that the PRC government is indisposed to a liberal order (forget democratic) that underlies a basic rule of law for a civil, transactional world society. Yes, China has signed treaties (some of the U.S. has sniffed at), and has made gestures toward at least economic openness at home, but it has not won over belief in its good intentions. That this is a good one as well as Republican position will be underscored if power in Washington again is divided after November.

The Chinese are famous for taking the long view of things, and that of course is helpful to us all here. Brushes between these two nations have many periods of more useful engagement. For a recent compilation of this, I’d suggest John Pomfret’s book, The Beautiful Country and the Middle Kingdom: America and China, 1776 to the Present. It’s tough in its treatment of both sides.

For the rest of Asia at this hour, there’s some apprehension and perhaps opportunity to play sides. No one can win the actual weapons in the South China Sea or the Taiwan Strait. In a cold war, however, alliances can help. China clumsily goes about seeking them in mercantilist fashion, while the U.S. squandered a sure thing by abandoning the Trans-Pacific Partnership.

If I were asked again, I’d say neither China nor the U.S. can afford a big mistake from here – but that doesn’t necessarily preclude one. – Tim Ferguson (Forbes International)