Escalating tensions between the US and China have led to expectations of a protracted trial of strength. Some warn that a new cold war is looming. On the contrary, the wrangling over trade practices and intellectual property is diverting attention from a deeper and more intractable conflict between the two powers: one concerned with China’s aspirations, its development model and its challenge to US primacy.
China is deploying a smart stratagem. By fine-tuning its position and agreeing to make some concessions to the US, it is staving off the possibility of an outright collision. The bickering precludes a real diplomatic showdown. By giving a little on trade, it is playing for time to continue its economic expansion and reforms. As the US domestic political infighting rages, China solidifies its own political unity to keep a firm footing.
This partly explains why China is willing to make more concessions on trade. Recently, it has resumed imports of US soyabeans and liquid gas; it has responded to US concerns over cyber espionage; it has just amended the law to ban forced technology transfers from foreign companies operating in China. In addition, 38 governmental institutions have signed a memorandum to crack down on intellectual property rights infringement. But these compromises are gains in disguise because they are compatible with China’s long-term economic development.