Collateral damage expectedThe trade war between the United States and China is dealing a blow to the friendship of the two countries’ leaders. U.S. President Donald Trump recently said he and Chinese President Xi Jinping might not be friends anymore after he accused China of trying to intervene in the November election in the United States. On the other hand, Xi said the trade conflict between the two countries is not necessarily bad because it may be an opportunity to stimulate China’s self-supporting economy. Amid the trade war, China seems to be preparing for the worst possible situation.
It is unusual that major Chinese investors are selling real estate properties in the United States. A Chinese insurer, Anbang Insurance Group, put up a package of 16 hotels in the United States for sale. In New York City, many properties owned by Chinese companies are for sale. Some said it was because of China’s control over investment in the U.S. market, but others suspect that the investors are preparing for the possibility that their assets in the U.S. market will be frozen when the trade war becomes uncontrollable.
The trade war is not just about trade. If the problem is the U.S. trade deficit with China, China can just buy more American goods. The situation is not that simple because the United States is attacking China for stealing American technologies and investing government money to bolster advanced industries. It is targeting “Made in China 2025,” an ambitious state program to secure top technologies in 10 key industries to beat out the United States by 2030.
This is directly lined to military competition, because advance technologies are linked to military capabilities. The political consensus in the United States is that China has infringed upon U.S. interests with unfair practices.
After Chinese intellectuals worried that China’s arrogance, particularly the offensive attitude of Xi, caused Trump’s attacks, Beijing is toning down the private sector’s arguments in the trade war in order to protect Xi from any blame. But China made clear that the trade war is something it is destined to face at some point.
The trade war, therefore, will continue for a while. Korea will suffer. Because 37.6 percent of Korea’s exports are to the United States and China, the trade war is a disaster not only for the economy but also for security. As Trump has warned, China may abandon the international community’s sanctions on North Korea. The trade war is a power fight for the 21st century and it has just begun.
JoongAng Sunday, Sept. 29, Page 34