July 23, 2020 – The worsening conflict between the United States and China has some characteristics of a new Cold War – and could prove just as dangerous, experts warned in a National Press Foundation briefing.

While traditional political thinking has held that economic interdependence between the United States and China would bind the two nations together and reduce the risk of conflict, Alan Dupont, a former Australian diplomat, argued the reverse may be true.

The perception in the U.S. that it is dependent on China and should “decouple” its economy from Beijing’s could increase tensions and lead to a military conflict, Dupont said.

At the same time, some economic separation between the U.S. and China is necessary to preserve  an open global trading system and democratic values and institutions, Dupont argues in a new white paper on “de-risking” the relationship. He described the possible outcomes for the relationship as “reconciliation, separation or divorce” — divorce being the most dangerous.

Both Dupont, speaking from Sydney, and Peking University professor Jia Qingguo, offering the view from Beijing, urged leaders in both countries to cool their rhetoric. Both sides should attempt to find norms and frameworks within which to manage the conflict, they said.

But both men, and journalist Ana Swanson of The New York Times, agreed that de-escalation would be unlikely, particularly during an election year in the U.S.

"The mood in Beijing is not good — for some time now," said Jia, professor and former dean of the School of International Studies at Peking University.

Chinese officials increasingly believe the conflict isn’t just about money and unfair trade, but about the United States trying to hurt China, he said.

Jia, who also serves on the Standing Committee and the Foreign Affairs Committee of the National Committee of the Chinese People’s Political Consultative Conference, argued that the Trump administration has whipped up anti-Chinese sentiment with false narratives about Chinese misbehavior and that the U.S. population had accepted those “lies.” He said President Donald Trump has adopted an election-year strategy of scapegoating China for U.S. failures to address the needs of its own population and for mismanaging the COVID-19 pandemic. And he warned that Democrats’ tough line on China during the campaign would come back to haunt them if they seize the White House in November.

Swanson, who covers international economics, said the business community, which had long opposed strict U.S. moves against China, has increasing reservations about doing business there. But she reports that shifting manufacturing out of China had not brought the re-shoring – or movement of jobs back to the United States – that the Trump administration has sought.

Instead, international corporations are moving operations to Vietnam, Mexico or other nations that offer lower wages and costs.

Jia countered that multinational companies are still making money in China, whose economy is still growing.

Dupont said reform of the World Trade Organization is urgently needed as an institution for dispute resolution. Trump has threatened to withdraw the U.S. from the international body. Even without withdrawing, Swanson said, the United States could take other steps to cause the institution to wither.

Dupont said the Chinese decision to try to leap ahead in artificial intelligence, biotech and other emerging technologies has set the stage for a much larger confrontation about who will own the future.

“It really is a contest between the two major powers as to which of them is going to be No. 1, and unfortunately, that doesn’t seem to leave a lot of room for compromise,” he said.