Prolonged trade war could lead to another financial crisis: China’s US ambassador Cui Tiankai
Cui Tiankai raised the spectre of a repeat of the 2008 global financial crisis in an interview with The Wall Street Journal on Monday, ahead of the high-stakes meeting between US President Donald Trump and Chinese leader Xi Jinping, scheduled for the G20 summit in Buenos Aires later this week.
“Although the current economic situation in the US is good, people cannot rule out the possibility of another – I don’t want to use the word ‘crisis’ – a similar situation to what happened 10 years ago,” Cui said.
“But, under the current circumstances, do you think people will still be as ready and open as they were in 2008 to have effective international policy coordination and coordinated stimulus actions? I’m not sure about that.”
While markets are seeking a ceasefire from the G20 meeting, analysts say it will be unlikely for the tête-à-tête between the two leaders to yield a substantive deal, with both sides deadlocked on key issues such as reciprocal market access and intellectual property protection.
Trump said, in a separate interview with The Wall Street Journal, that it would be “highly unlikely” for him to hold off on raising tariffs on Chinese imports, with another hike from 10 per cent to 25 per cent on some products expected on January 1.
“The only deal that would be really acceptable to me – other than obviously we have to do something on the theft of intellectual property, right – but the only deal would be China has to open up their country to competition from the United States,” he said.
“They have to open up China to the United States. Otherwise, I don’t see a deal being made.”
But Cui defended Beijing against accusations of forced technology transfers and intellectual property theft, arguing that there are laws and policies to protect intellectual property rights for US businesses.
“For some of the cases of transfer of technology, it’s not forced transfer,” he said. “I’m sure there have been cases of so-called market share for technology. But these are commercial deals between the companies. If people don’t like the deals, they can certainly walk away. Nobody is forcing them to do these deals.
“Sometimes this kind of transfer of technology is forced not by the Chinese government or a Chinese company, but by market competition.”
The Chinese ambassador also raised an alarm about the growing mistrust between the countries – including US actions on Taiwan and the South China Sea, and allegations that Chinese students in the US are spies – which he said is “really poisoning” the overall relationship.
He urged Washington to seek advice from so-called old China hands, from whom he said the Chinese had sought counsel, even as observers say many of them have lost their clout with the Trump administration.
“I, myself, I’m talking to people like [former treasury] secretary [Hank] Paulson, Henry Kissinger, Steve Schwarzman, and the Chamber of Commerce here in Washington very often,” he said.
“I think both sides should make best use of their experience. We should listen to their advice seriously … What will serve the best interests of the United States, if we don’t listen to these experienced people?”
Cui added that he hoped Trump and Xi’s meeting in Argentina would allow for further progress on multiple fronts, including on economic and trade issues.