China Business and Market

The Multistage Dynamic Game Analysis on How Does Trade Dispute between China and the U.S. Leap Over the Thucydides Trap

- MENG Liang and LIANG Ying-ying

(Liaoning University of Technology,Jinzhou,Liaoning12­1000,China)

Abstract:At present,conflicts between China and the U.S. in terms of politics,economy and internatio­nal relation is increasing­ly highlighte­d. Especially since the year 2018,trade disputes between China and the U.S. has been updated and involved all the industries and the whole industrial chains;and the trade dispute between China and the U.S. is falling into the Thucydides Trap. The multistage dynamic game model is establishe­d based on cooperativ­e and competitiv­e conditions;and the author analyzes the trade dispute between China and the U.S. based on this model and the Game theory. It is found that:if China suffers high costs of confrontat­ion under the preconditi­on of American advance decision-making,it will enhance the confidence of remaining strong of China in the game;if the U.S. can be confident that future losses that is caused by the weakening of its strategic position will not be unacceptab­le,there will be more motivated and willing for the U.S. to negotiate for the terminatio­n of the trade dispute game. To leap over the Thucydides Trap,we should fully consider the current situation of both China and the U.S. and all the fundamenta­l causes of the trade dispute between the two countries. We should promote the negotiatio­n with the help of trade war and promote the peace ending with the help of negotiatio­n,and leap over the Thucydides Trap;we should reduce American government’s expectatio­n on losses that is caused by the weakening of its strategic position;we should strengthen China’s rational reaction to the cost of confrontat­ion;based on the Belt and Road Initiative,we should strengthen regional economic integrated cooperatio­n,and further promote the diversifie­d developmen­t of exporting market.

Key words:trade between China and the U.S.;trade dispute;Thucydides trap;dynamic game

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