We’ve Seen the End of the US-China Relationship. The Rift Is Now Total

Virus blame game finished what Trump's trade war had started

It didn’t have to end this way, but the die is now cast. After 48 years of painstaking progress, a major rupture of the US-China relationship is at hand. This is a tragic outcome for both sides – and for the world. From an unnecessary trade war to an increasingly desperate coronavirus war, two angry countries are trapped in a blame game with no easy way out.

A nationalistic American public is fed up with China. According to a new poll by the Pew Research Center, 66% of US citizens now view China in an unfavorable light – six points worse than last summer and the highest negative reading since Pew introduced this question some 15 years ago. While this shift was more evident for Republicans, those older than 50, and college graduates, unfavorable sentiment among Democrats, younger cohorts, and the less educated also hit record highs.

An equally nationalistic Chinese public is also irate at the United States. That is not just because President Donald Trump insisted on dubbing a global pandemic the “Chinese virus.” It is also because whispers turned into shouts linking the outbreak of COVID-19 to alleged suspicious activities at the Wuhan National Biosafety Laboratory.

Just as most children are taught that two wrongs don’t make a right, tit-for-tat blame does not justify severing the world’s most important bilateral relationship. But the time for dispassionate logic is over. We must, instead, contemplate the harsh consequences of this rupture.

Both economies, entwined in a deeply embedded codependency, will be hurt. China stands to lose its largest source of foreign demand, at a time when exports still account for 20% of its GDP. [Oh the poor Chinese, they’ll just have to use all that stuff they make themselves.] It will also lose access to US technology components required to advance indigenous innovation. And the loss of a currency anchor to the US dollar could lead to greater financial instability.

But the consequences will similarly be  for the US, which will lose a major source of low-cost goods that income-constrained consumers have long counted on to make ends meet. A growth-starved US economy will also lose a major source of external demand, because China has become America’s third-largest and fastest-growing export market. And the US will lose its largest source of foreign demand for Treasury securities, all the more worrisome in light of the looming funding requirements of the biggest government deficits in history.

This rupture does not come as a great surprise. As is the case in interpersonal relationships, geopolitical codependency can , especially if one partner starts to go its own way. And China’s  – shifting away from exports and investment to consumer-led growth, from manufacturing to services, from surplus saving to saving absorption, and from imported to indigenous innovation – did indeed put it on a very different path.

This turned out to be an increasingly uncomfortable development for a China-dependent US. Left behind, America felt scorned, and that scorn led first to blame, and now to open conflict.

The consequences of the US-China rupture go far beyond economics. A decisive shift in the balance of global power, ushering in a new cold war, could well be at hand. Under Trump’s “America First” administration, the US has turned inward, heaping scorn on its once-loyal allies, withdrawing support for key multilateral institutions (including the World Trade Organization and, in the midst of a pandemic, the World Health Organization), and embracing trade protectionism. Meanwhile, China is filling the void, partly by design (through its Belt and Road Initiative, the Asian Infrastructure Investment Bank, and airlifts of medical supplies to pandemic-ravaged countries in Europe and elsewhere), but also by default, as the US retreats.

Although these tectonic shifts will leave most Americans worse off, the US seems to be shrugging its collective shoulders. America First has resonated with widespread wariness of globalization (now reinforced by concerns over supply-chain vulnerability). Many Americans are angry over allegedly unfair trade deals and practices, indignant at seemingly disproportionate US funding for institutions like the International Monetary Fund and the World Bank, and suspicious that the US security umbrella in Europe, Asia, and elsewhere encourages free riders and others not paying their fair share.

Paradoxically, this inward turn comes at precisely the moment when America’s already depressed domestic saving is likely to come under enormous pressure from an explosion of pandemic-related government deficits. Not only does that imply deepening current-account and trade deficits (the nemesis of the America First agenda), but it also poses a major challenge to longer-term economic growth.

America’s public debt-to-GDP ratio, which reached 79% in 2019, will now almost certainly go well above the 106% record hit at the end of World War II. With interest rates pinned at zero, no one seems to care. But that’s just the problem: interest rates will not stay at zero forever, and economic growth in an overly indebted US will wither under just the slightest rise in borrowing costs.

Can the broken US-China relationship be salvaged? Ironically, COVID-19 offers an outside chance. Both countries’ leaders would need to end the blame game and begin restoring trust. To do so, they would need to come clean on what really happened in the early days of the pandemic – December for China, and January and February for the US.

This is not a time for false pride or nationalistic bluster. True leaders often emerge – or are revealed – at history’s darkest moments. Is it really too late for Trump and Chinese President Xi Jinping to comprehend what’s at stake and seize this opportunity?

Source: Project Syndicate

  1. Jozo Magoc says

    In our Dual and Bi–polar world, in the Tao-Path of Heavens,as above so below, the positive pole is above China,and the negative pole over the US…The new cycle of ENLIGHTENMENT OF NATIONS starts once again from China,which is up,meanwhile the US is down-to the 2nd Bankruptcy,after 1933,up to 2033 and by their Rat-child declaration on 1$ bill as the year of Novus Ordo Seclorum at Annuit Coeptis! The angry, zionists of the West preparing another war,with China, wants to send most ” goyim” souls to E Pluribus Unum= galactic Womb!
    But the zionist murderers and war crimminals face formidable enemies,capable to wipe off the zionists! I just point them out,it is Christian Russia who has in their Two headed eagle at the center: ST.GEORGE-THE DRAGON SLAYER ON THE WHITE( CHRIST) HORSE OF APOCALYPSE-SPEARING/ SLAYING THE ” great U SAtan”!!!

  2. Mary E says

    The US started the economic war on China for what reason?
    Well, for one, the US has to be in a war situation constantly and it finds the damndest reasons, all made up..all on behalf of the oil companies..their philosophy is if others have it, we will take it from them by way of violence and murder…not the long, tedious and correct diplomatic route. It is a greedy government..always has been but in the end it’s low road route will only destroy them…all by design..
    China is on the high road economically with its very successful Belt and Road project – which is a Win-Win for it and its partners- The US would like to have been smart enough to do that, but all Washington knows is force…it will be their undoing after many decades.This may be a prelude to a full blown war with China – and/or Russia. Say goodbye now folks….China will not lose and neither will Russia! They are close allies, economically as well as politically….and as we will see, militarily.

    1. Jozo Magoc says

      My reply to your comment is above!


    Roach sounds like a bleating Ameri-apologist begging the world to play nice!

  4. Nestor B. Aguilar says

    Corona Virus Pandemic is a false flag used in instilling fear and cover-up of the World Corporate Government Bankruptcy and the impending Global Currency Reset. The Governments of the Breton Woods’ member countries are illegitimate corporations. (KH)
    Karen Hudes: Board of Governors of the World Bank and IMF announced a transition to asset-backed currencies.

  5. Nestor B. Aguilar says

    Karen Hudes: A member of the US’ Armed forces has this to say about what is really going on in the military.

  6. chris chuba says

    Project Syndicate is a mostly Neocon publication in Canada and I love how this author acts as if this was a tragic confluence of events rather than a methodical attack by U.S. Neocons. If I hear Tom Cotton say ‘Communist China’, as if it is one word, one more time I might throw up.

    Now that U.S. Neocons have figured out that China, and not Russia, is the biggest threat to U.S. world domination, do you think they will go back to Russia, pretend to be nice to get Russia to stay on the sidelines while they attack China? That would be a hoot.

    1. stevek9 says

      That was Trump’s plan from day one. But his enemies in the Deep State scotched that. Since then he has found there is some political gain by bashing Russia, but you can tell there is no enthusiasm there. Although there was all this ‘my good friend, Xi’ it’s clear he wanted to disengage from China, and bring manufacturing home to the US. Trump’s instincts are generally good, but he is not very smart, and probably doesn’t realize how difficult that will be, and how many powerful people would oppose it. Still it is a good idea. In the 1970’s the US imported 6% of goods. The rest was made in the US.

      1. itchyvet says

        May I remind you, the concept of outsourcing manufacturing was born and heavily pushed by none other than the Americans. Too bad it’s bitten them on their back sides. There’s no way in hell, the U.S. can turn this around, maybe in 30 years or so. But there’s going to be some incredible hard times for them, before that happens. I cannot say, that nation does not deserve it.

  7. Séamus Ó Néill says

    Simple, let’s cut to the chase, no more bullshit, America’s kaput and by its own foul hands ! There’s neither intelligence nor diplomacy in American political circles. Trump is a moron, a narcisstic egomaniac incapable of accepting responsibility or blame. China’s ascendancy and rise to World No1 greatly disturbed America so Trump began a fight back with a trade war. He, unsurprisingly, lost the trade war and American farmers and consumers were fecked. To try and encourage China to buy American agriculture produce, cyber attacks were launched on China’s agriculture and food supply, first an avian flu on their ducks, then swine fever on their pigs ( both, the main source of protein in China ) and thirdly an “armyworm ” attack on their crops. China survived, seemingly unscathed without the need for American produce, so a plan was concocted to release a virus in Hubei provence…China’s industrial heartland. ( China’s rise had to be stopped anyway it could ) It was timed to coincide with the Chinese New Year and people returnig home would carry it to every corner of China. Whether Chinese intelligence discovered the plot ot not, when the outbreak was detected in Wuhan, they locked down the whole of Hubei provence and prevented the spread of the virus. An attack was launched on Iran at the same time but American incompentency and daily worldwide travel ensured that the virus circled the globe and we’re witnessing the result today !

    1. itchyvet says

      Spot on, Seamus, good to see there are some folks who can follow the dots and see the daylight.

    2. LS says

      I would not assume its presence in America is the result of incompetence. It happens to offer a convenient excuse for an economy that was probably going to collapse anyway. They can use it to ease us into the inevitable austerity that would accompany economic collapse, and to make various societal changes that the left has been after.

      No matter what happens, I take some solace in knowing that the Chinese and Russians, along with those in their orbit, will move forward.

      1. Séamus Ó Néill says

        I was trying to be as concise as possible, after the leak at Fort Detrick, a lot of pneumonia type deaths occured in America, some blamed on e-cigs, a phenomena strangly confined to a small part of America.Yes the virus was always going to be released to cover the bankruptcy of Western powers, but I think it arrived prematurely and hence the reason both Britain and America were lackadaisical and unprepared. The takedown of China was upmost priority, with the virus later arriving in Europe/America but with the end resultant blame game still on a severely weakened China….the plan has obviously backfired with America suffering the most and yes, perhaps we can now move forward into a more enlightened age.with any assistance we can get.

  8. LS says

    Enmity is good if it keeps Westerners from corrupting the Chinese. The Chinese and the Russians do not need to have anything to do with the US. Nothing. There is a lot going on in the Eastern hemisphere. Good grief, the whole Western hemisphere could disappear and it wouldn’t mean shit. The author of this piece sounds really low-T.

    1. hoyeru says

      not quite right. The Chinese are greedy bastards, as greedy as Americans. One thing, the Americans aren’t dummies. They can read others weaknesses very well. They KNEW how greedy the Chinese are and used that. The Chinese made 2 major mistakes: being greedy and trusting the West. Russia finally learned they cannot expect any friendship from the West, it took them about 20 years. Hopefully, the Chiense will quickly learn that lesson as well and forget about the West.

      1. itchyvet says

        Quote, “the Americans aren’t dummies” Unquote. IF, what you post has any validity at all, why then, are Americans in the position they are in then ??? L.O.L.

    2. stevek9 says

      You do realize that the reverse is true as well, don’t you? The US along with Russia might be the only two countries in the World that could be complete Autarchy’s. The Rest of the World could disappear and America (and Russia) would do just fine. Maybe China, but I’m not sure they grow enough food.

      If you are concerned about energy, uranium means that all of these countries could exist without the Middle East, or Oil, or Coal.

      1. itchyvet says

        Quote, “The Rest of the World could disappear and America (and Russia) would do just fine” Unquote. L.O.L. of course you missed the FACT, that the U.S. cannot survive without raping and pillaging other nations resources. To claim they could survive on their own is ludicrous. From where would then then gain their riches ??????????

  9. Ron Ronery says

    If the USA government cancels the Federal Reserve and takes back control of it’s money creation, it has ZERO debt problems. It could print itself out of any depression as long as printed money is invested in real GDP. In otherwords, do what the former Republic of the USA did, what the Nazi’s did in the 1930’s and what China is doing today. There is a “global” International Finance parasite that has infected the Western World and the USA specifically since 1913. If the USA kills the parasite, it will be great again. China, Russia, or any virus are not the enemy….private banking parasite is the enemy of mankind.

    1. hoyeru says

      you’re dreaming. the FED controls USA. The bankers control US gov. If Trump ever ties to do that he will get Keneddyed.

    2. stevek9 says

      We had the perfect opportunity to kill the ‘parasite’ in 2008. We did not do it, and I’m not sure it can ever happen now. What to do was clear, shut down and take over all the money center banks, fire all the management above the level of Director and bar them for holding any position in a financial institution in the future (prosecute and jail those who committed fraud), recapitalize the banks under new management. Oh, and reinstate the Glass-Steagal Act. That would leave banks private, but would probably keep them under control for another 50-100 years.

  10. stevek9 says

    Debt is too high in the US, but debt in a fiat currency issued by the ‘borrower’ only matters if it leads to inflation. The fact that a lot of the debt is held by foreign governments is why there is no inflation. That may start to change, but not overnight. In which case, the debt will need to be reduced.

  11. Genghis Gobi says

    Amerikastanis are always hypnotised by their own lies and propaganda. Also they have an almost genetic-level need to blame everyone but themselves for their own misdeeds. So the last thing these people will do is step back. They still imagine they own the planet, and they will try to force China to surrender. This will not go well for the Imperalist States of Amerikastan.

  12. Ilya says

    America’s debt to GDP ratio is 110%ish, the 79% figure is something magic they pull out of a hat. $22.5trn debt, $21.5trn GDP in 2019.

    1. cechas vodobenikov says

      I believe closer to 116-119%
      anticipated to increase to 30-35 trillion in the wake of COVID

      1. Ilya says

        Yeah, shady reporting as always from the Empire! 19% deficit this year projected, only half the year through.. They are shooting past Greece in epic style 😀

    2. chris chuba says

      Ah yes … the old public vs private debt trick but we still pay interest on the public debt (social security / medicare) and its counted as part of our debt ceiling.

    3. Canosin says

      it’s now almost 25 Trillions debt and about 117% ratio to GDP……AND RISING…….
      and it’s just the beginning of May 2020……the figure will be approx 29 Trillions debt to 19 Trillions GDP by December 2020…..and that’s an optimistic outlook……

  13. cechas vodobenikov says

    also BRICS—Brazil, Russia, China, India, S Africa trade bloc
    today the GOP is sinophobic; the dems r Russophobic
    as Gorer, Williams etc wrote, amerikans only take credit for their successes and blame external forces, others for their failures

  14. stevek9 says

    Ending US (and World) dependency on China for manufacturing is a good thing, for the US … and for China.

  15. jm74 says

    US started it and China with Russia, Iran, Venezuela, Cuba and N. K. will end it. US should have stopped their BS after the Iraqi fiasco.

      1. James Willy says

        And they took down a plane load of cia pieces a shyte too, in co-ordination with Iran.

      2. Per says
    1. Canosin says

      too late now……the empire will and must go……it will disappear faster than one can imagine

  16. Grand Nagus Zek says

    let the Empire rot

  17. hoyeru says

    the article is sugar coating Reality. USA is deadly terrified of China’s economic rise. America liked the cheap labor for 30 years but once China became too powerful, American got scared cuz America always tells itself it’s number 1 in anything and it “leads” the world. Thats all.

    Now America is hoping to halt China’s rise by any means necessary. See, I said the exact thing the article said, and only used 5 sentences to do it,

Leave A Reply

Your email address will not be published.