China-U.S. Tensions Prelude To Economic Cold War, ‘Bloomberg’ Suggests
Among all the countries the President of the United States, Donald Trump, has targeted, slapped with tariffs, and provoked, one country stands out: China. According to a Bloomberg analysis published today, the Asian country will be a source of economic conflict for years to come, and this will result in an economic cold war.
Before president Trump took office, Americans were mostly focused on terrorism and war in the Middle East. But, in December 2001, three months after the September 11 attacks, China joined the World Trade Organization. This, according to Bloomberg, was a defining moment.
With Americans focused on war and terrorism, the Chinese economy kept growing. Next came the 2008 financial crisis, which reshaped the political environment in the United States, turning it into an environment of “dysfunction and partisan polarization.”
Bloomberg‘s columnist and portfolio manager for New River Investments, Conor Sen, argued that the United States will not be able to compete with China’s “Made in China 2025” project, which could turn the Asian country into a national security threat. If the “Made in China 2025” initiative proves to be successful, the following scenario will play out, Sen explained.
“China becomes the global leader in technological innovation. Its economic growth continues to outpace American economic growth, and over time it’s America forced to adapt to Chinese values in key areas in the global economy rather than the other way around.”
This scenario, Sen added, will likely unite Republicans and Democrats, but the impact of the growing rivalry between the two countries will be so far-reaching that every pore of American society will feel its effects.
“The economic conflict between the U.S. and China could define the next generation of American life,” Bloomberg concluded.
— Bloomberg (@business) August 13, 2018
China, the world’s second-largest economy, will continue to grow throughout 2018, according to the International Monetary Fund’s (IMF) forecast, summarized by Reuters. In the first quarter of 2018, the Chinese economy grew faster than expected: 6.8 percent.
IMF maintains China's 2018 GDP growth forecast at 6.6 percent https://t.co/GZMemjTZoy
— Reuters China (@ReutersChina) May 30, 2018
However, according to IMF’s predictions, the economic growth will slow to 6.5 percent this year from 6.9 percent in 2017, mostly due to higher borrowing costs and government intervention. The increase of debt in China, on the other hand, has slowed down significantly.
Donald Trump continues to escalate the trade war with China, but he may not be able to win it on his own. In order to achieve that, the United States needs to form alliances, according to Asia Times. So, instead of isolating ally countries, like European Union member states, the POTUS should focus on establishing trade partnerships with them, Asia Times concluded.