China’s ‘Long Game’ in the Trade Conflict with the U.S.

May 21, 2019 (EIRNS)—Unless the China-U.S. economic relationship gets back on track, after the collapse of the trade negotiations and especially the new punitive measures against communications giant Huawei, the entire global economic order may collapse. That is the strategic evaluation now being put forth in China’s semi-official media, alongside their angry denunciations against Washington over what happened.

“These self-serving moves have disgraced Washington’s credibility as a responsible major country, and seriously eroded the foundation for international cooperation,” Xinhua wrote sharply on May 20. “It is worth noting that the U.S.-led global order may collapse once Washington’s credibility goes bankrupt.” The leading Chinese wire service went on to emphasize: “This dangerous prospect is in no one’s interests.”

A Global Times editorial the same day argued that the big loser in the sanctions against Huawei will be the U.S. and its companies, not China. There will be “support from Chinese society for Huawei to overcome difficulties,” whereas “the cut-off has completely destroyed the business reputation of American companies.... China is unlikely to use a large number of products provided by American companies anymore.” The editorial concludes:

“Stopping the supply to Huawei means they are irreversibly losing the China market. The China-U.S. trade war has caused losses on both sides. The pain inflicted on China is temporary. But what the U.S. has to face is growing long-term pain. The so-called decoupling with China is very likely the real beginning of U.S. decline.”

A second Global Times article by Hu Weijia warned about escalating financial and economic warfare between the U.S. and China. “China should be prepared for the worst-case scenario,” should the U.S. “use financial means to tackle its disputes with China, just as it did to Iran.” Such financial sanctions would “deal a heavy blow to China’s high-tech sector.... Backup plans are needed to ensure not only continuity of supplies of critical components for Huawei’s products, but also the strategic financial safety of Chinese companies.”

China Daily also editorialized on the subject, writing that

“What cannot be clearer is the U.S. is suffering from serious paranoia about China’s rise. Its attempt to strangle the development of Chinese technology companies is meant to block China’s advancement in science and technology.... But despite its efforts the U.S. will not be able to contain China’s technological progress, nor will it halt China’s economic development.”