US abrasiveness towards China is steered not just by security concerns. It is also because of overwhelming pressure from their corporates – skeptical about China’s earlier anticipated opening-up and now – advocating a stern approach. Therein lies our opportunity.
US President Donald Trump finally increased tariffs on US$200 billion of Chinese goods to 25 percent from 10 percent and is threatening to do more. China’s blocking of Google and Facebook and America’s extraordinary paranoia over Huawei – reflects a new low in the relationship between the two giants. The confrontation between China and America is now full-blown and across sectors ranging from foreign trade (more than 700 b $ a year, and accounting for 13% of America’s world trade) to digital technologies and media. It is also clear that the trade war is only symptomatic of a deeper strategic competition between the two countries. In fact, with the strategic importance of new digital technologies there is only a very thin line that separates commerce and national security. This time the seriousness for the US is even greater because it is pitted against a non-Caucasian rival – one which is not just strong in technology but is also a strong commercial competitor.