Derek Scissors of the American Enterprise Institute makes the interesting case that after twenty-five years of enormous expansion, both the United States and China will soon reach the conclusion that the relationship involves two incompatible forces.
Indeed, Scissors argues that in the current trade dispute, both sides are close to the realization that whatever the deal, no agreement will last. The Trump Administration is a “difficult negotiating partner because it is divided on China goals.” The Chinese were incorrectly led to believe that the US trade hard-liners “would be pacified by a few headline deals.”
Meanwhile, the Chinese currency since May has plummeted 8 percent against the dollar. The US Foreign Investment Risk Review Modernization Act was just enacted. Since 2016, Chinese investment in the United States has plummeted.
Then there’s Chinese President Xi Jinping who, Scissors argues, “has cultivated the image of another Mao rather than another Deng.” Translation: A strong-man autocrat who is not a believer in liberalized markets.
Is Scissors correct that the US-China relationship is about to permanently shrink? And if so, how will this change affect the global order, including currency relationships, relative levels of economic performance, and national security concerns?
Twenty distinguished global strategists consider the question, followed by a response from Derek Scissors.
Peter Navarro: Deputy Assistant to the President and Director of Trade and Manufacturing Policy, The White House
Gary Clyde Hufbauer: Nonresident Senior Fellow, Peterson Institute for International Economics
Jason Furman: Professor of the Practice of Economic Policy, Harvard University’s Kennedy School, Nonresident Senior Fellow, Peterson Institute for International Economics, and former Chairman, President’s Council of Economic Advisers
Jim O’Neill: Former Commercial Secretary to the Treasury, United Kingdom, and former Chairman, Asset Management, Goldman Sachs International
Joseph P. Gagnon: Senior Fellow, Peterson Institute for International Economics
Yuen Yuen Ang: Associate Professor of Political Science, University of Michigan, and author, How China Escaped the Poverty Trap (Cornell University Press, 2016)
Richard N. Cooper: Maurits C. Boas Professor of International Economics, Harvard University
Richard Jerram: Chief Economist, Bank of Singapore
C. Fred Bergsten: Senior Fellow and Director Emeritus, Peterson Institute for
Mohamed A. El-Erian: Chief Economic Advisor, Allianz; Contributing Editor, Financial Times, Columnist, Bloomberg Opinion, and Chair, President Obama’s Global Development Council
Jeffrey R. Shafer: Former Undersecretary for International Affairs, U.S. Treasury
Jennifer Lind: Associate Professor, Dartmouth College, and Associate Fellow, Chatham House
Robert A. Manning: Senior Fellow, Brent Scowcroft Center on International Security, Atlantic Council
Catherine L. Mann: Managing Director and Global Chief Economist, Citigroup
William Brock: Former United States Trade Representative and former U.S. Secretary of Labor
Andrew Dewit: Professor, School of Economic Policy Studies, Rikkyo University
Diana Choyleva: Chief Economist, Enodo Economics, and co-author, The American Phoenix and Why China and Europe Will Struggle After the Coming Slump (2011)
Atman Trivedi: Managing Director, Hills and Company, and Adjunct Fellow, Pacific Forum
Craig Allen: President, U.S.-China Business Council, former U.S. Ambassador to Brunei Darussalam, and former Deputy Assistant Secretary for China, International Trade Administration, U.S. Department of Commerce
Hongyi Lai: Associate Professor, School of Politics and International Relations, University of Nottingham
Derek Scissors: Resident Scholar, American Enterprise Institute