January 19th, 2019

Donald Trump’s cold war tactics will not work with China

Generals fight the last war, and Washington’s economic war on China is straight from America’s tactics against the Soviet Union and its skirmishes with Japan in the 1980s. Yet China is neither the Soviet Union nor Japan. The US’s aggressive trade actions towards Beijing, unless suspended in the near future, will damage the world economy and America itself.

The overriding aim of US policymakers is American economic and military primacy. Though China remains far poorer than the US (roughly one-third the gross domestic product per capita at international prices), it has pulled ahead of the US in total GDP when measured at international prices and is converging or ahead on technologies such as 5G. A notable upcoming test will be China’s ability to compete with Boeing and Airbus in the market for civilian aircraft during the 2020s. My own bet is it will be able to compete.

Read the full article in the Financial Times here.

 

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