Cold War between America and China threatens the world economy

Cold War between America and China threatens the world economy

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Researcher Shatha Khalil *
The trade war between the United States and China has overshadowed the global economy over the past year, creating uncertainty in the business world and even consumers. The image of the Sino-US rivalry became apparent in the middle of the 20th century; for global trade expansion to extend from Asia to Africa to reach Europe, after the Second World War, where China intended to present itself first among many counterparts in an independent Asian-African bloc of countries, but this does not fit to the United States of America, as President Donald Trump used to attack China criticizing the trade imbalance between the two countries and the Chinese intellectual property rules, which Trump sees as hindering the progress of US companies.

Observers believe that the trade war is part of a US attempt to curb the Chinese rise, amid the fear of Western governments of growing global influence of China.
The imposition of US tariffs on Chinese goods as well as China has taken the same step, with tariffs on goods worth billions of dollars, and may be increasing, and Trump hinted to impose a charge of 25% on Chinese goods worth 325 billion dollars.
The IMF warned that the escalation “threatens the global economy” and secure global financial stability.
Analysts say that even though Trump has underestimated the impact of tariffs on the US economy, the increase may affect some US companies as well as consumers that may be borne by companies part of the cost.

Permanent disagreement between China and America:
The US-China dilemma lies in Washington’s refusal to give the right to navigation and control on the South China Sea, which has great support within the United States, explaining that since President Richard Nixon went to China in 1972, his country’s policy toward the Pacific ocean was stable regardless of Party differences within the administration of any president.

China is ahead over the United States in GDP and trade or ahead over it in technology, such as the fifth generation of mobile phone, the author believes that China will compete in the beginning of 2020 civil aviation companies Boeing and Airbus.

Economist Jeffrey Sachs predicts that “Cold War tactics” used by US President Donald Trump will not work with China and that China’s economy will become bigger than America’s economy thanks to the population.

He says that what the United States is doing to China is a “cold war.” It is pushing its security allies in NATO, Japan, Australia and others to stop buying advanced Chinese technology.

In the same vein, the magazine Foreign Policy reported that the United States and China have become one of the strongest cold wars in history, especially after Beijing deliberately penetrated accounts of high-profile figures in the Pentagon, and Washington’s insistence not to abandon the South China Sea, as well as trade wars that will not subside.
The US magazine stressed that the arms race and the US military competition with China will determine the features of the twenty-first century, pointing out that the cyber breakthroughs peaked, after the Chinese computers penetrated records of maintenance of US warships.

The differences between the United States and China are blatant and fundamental, and can hardly be negotiated, but can never be appeased.
The Chinese should be committed to pushing US naval and air forces away from the western Pacific Ocean, “southern and eastern China,” while the US military is determined to stay in the area, the magazine said.
China views the “South China Sea” in the way US strategists saw the Caribbean in the 19th and early 20th centuries as the main extension of blue water from their continental land mass, which enables them to control the ocean.
The Pacific ocean is no longer the only barrier in China-US relations, saying the new era of the war will be impossible without the economic and technological race.

Fears of the new Silk Road:
The Silk Road is one of the most important trade routes linking East Asia to Africa and Northern Europe, through Central Asia, Eastern Europe and the Middle East. The goods are transported through a combination of roads, railways and interconnected sea lines. This large initiative aims at reviving the two silk routes, sea route (belt), and land (the road), which were linking China to the world.
China hopes to raise the volume of exchanges through the Silk Road to 2.5 trillion dollars over 10 years. The number of countries participating so far is 65 countries, accounting for 60 percent of the world’s population.

China insists that its project can not be considered a hegemony as promoted by a number of Western countries, but rather offers for partnership and cooperation between countries, where China is addressing the world with the logic of mutual profit, or as it is known with the principle of (Win-Win). But what it is certain the project contributes to the redrawing of the map of international forces and balances in a large way, which poses a threat to Western industrial countries, it competes with its markets and bring them out of their areas of influence.

US reports of the Defense Ministry show that it faces the Chinese threat with much greater vigor than its Russian counterpart, Beijing, with its high power as a rising technological force, may outperform Washington in digital battle systems.
China’s ideological development has greatly affected relations between China and the United States, after Beijing’s strict development was seen since the era of Deng Xiaoping and his successors until it has reached the rule of Chi Jinping to be turned to a “solid authoritarian” state, confirming China’s technological development where it enhances the conflict between the two countries, instead of easing its impact , after the war turned to just one click on the computer.

New Fees:
Trump’s new fees are calculated on American importers of Chinese goods, not on the Chinese exporter, and their price falls into their selling prices, meaning the US middle class finds itself in danger of paying higher prices for current consumer goods.

As for China, the imposed fees are subject to more than 250 billion dollars of Chinese imports of punitive customs duties, raised on Friday from 10 to 25% on the equivalent of 200 billion dollars of Chinese goods.
Trump has launched measures to impose customs duties on the rest of China’s imports equivalent $ 300 billion in imports. The new tariff rise is likely to be effective only a few months later, but waving by it allow to be used to tighten the screws on China in tough trade negotiations.

AFP quoted that the “Trade Partnership organization “, has confirmed that the rise of customs duties, which came into force on 10/5/2019 will lead to the rise of annual cost of a US family of four individuals increased by $ 677.
From its part , Beijing streses that it will not subject to threats < and Liu , the chief negotiator said China strongly opposes the recent increase in tariffs, but believes that small setbacks are normal and inevitable during the negotiations between the two countries, as we look ahead, we remain cautiously optimistic.

In conclusion, the US Chamber of Commerce in China said in a statement that it is committed to helping the two sides to reach a “sustainable” solution. And added “Despite our frustration over tariff increases, we support the existing efforts of the two sides to reach a strong and resolute agreement that resolves fundamental and structural issues that faced by our members in China, “and we are waiting , will the negotiations succeed or the next setbacks will be bigger ?!

Economic Studies Unit
Rawabet Center for Research and Strategic Studies