The Ebb and Flow of Conflict

Jan 26, 2023

Conflict progression — either escalation or resolution — does not occur in a straight line. The US-China conflict is an important case in point.

In the past five years, the Sino-American relationship has taken a decided turn for the worse.  A trade war was soon followed by a tech war, with the early skirmishes of a new cold war quick to follow.  Yet during this period, there have been periodic thaws — glitzy leader-to-leader dinners between Trump and Xi at Mar-a-Lago and Beijing, the celebrated Phase I trade accord, and a more recent mini-summit meeting between the two presidents last November in Bali.

Yet those thaws, in all cases, were nothing more than momentary lapses in a steady progression of conflict escalation.  Such is the case again today. Yes, there are some seemingly hopeful signs that conflict may be ebbing. After three years of isolation, Xi Jinping has resurfaced; he is not only starting to travel again but he reversed his signature draconian zero-Covid policy.  Liu He, Xi’s chief economic advisor, brought an upbeat message of a China on the mend to last week’s World Economic Forum in Davos.  And there appears to be some tempering of the Chinese tone to foreign policy — notably the promotion of Qin Gang to Foreign Minister after serving as US ambassador for a little over two years and the demotion of Zhao Lijian, one of China’s most outspoken “wolf Warriors,”  as foreign ministry spokesman. Offsetting has been the designation of Wang Huning as the senior leader in charge of Taiwan unification strategy; this is not good news for conflict resolution, as Wang is China’s leading ideologue and proponent of the thesis that America is in decline.

On the US side, the list of good news is shorter. The upcoming February 5-6 trip to Beijing by  Secretary of State Antony Blinken is viewed as an encouraging follow-up from the Xi-Biden Bali summit. And John Kerry, the senior climate envoy of the Biden Administration, sent similar hopeful signs at Davos about prospects for renewed negotiations between the world’s two largest greenhouse emitters.

But for every step forward, there has been a comparable step back.  That is glaringly evident on the technology front where Biden Administration pressures have been so acute in recent months.  The Netherlands appears to be on the brink of joining Japan in America’s new “coalition of the willing” that would tighten the noose on Chinese access to western technology; significantly, Dutch cooperation would include ASML, the world’s leading producer of lithography equipment that is critical to advanced semiconductor production. At the same time, an overwhelming bipartisan majority (voting 365 to 65) in the US House of Representatives just approved the establishment of a new China committee (formally known as the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party) that is almost certain to provide an official platform for China bashing. And Kevin McCarthy, the barely elected Speaker of the House, seems set to deliver on his earlier promise to make a quick trip to Taiwan that could well inflame the Chinese even more than last August’s visit of Nancy Pelosi.

Bottom line: The ebb of relief has not unwound the flow of Sino-American conflict escalation. Trade tensions remain intense, as US Trade Representative Katharine Tai underscored in Davos.  The tech war continues unabated. And the drumbeat of cold-war-like belligerence continues to resonate with lopsided bipartisan support in the halls of the US Congress. After five years of increasing conflict, a pervasive sense of distrust hangs over this troubled relationship. With neither Washington nor Beijing willing to go out on limb and restore trust, the gravity of conflict escalation has taken on a life of its own. The perils of Accidental Conflict are high and rising.

You can follow me on Twitter @SRoach_econ

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