Business World

China’s strengths in a trade spat are also its weaknesses

Strength can be deployed to defuse a trade war, as well as wage it. Advantage: Xi.

- By Daniel Moss

For the first time since the Opium Wars of the 19th century, China’s borders and territory are unchalleng­ed. No conflict frays the country’s edges. This stability has allowed for rapid industrial­ization, foreign investment and the rise of an urban Chinese middle class. Why would China jeopardize this in a trade spat with the US?

Hard- won political unity created the conditions in China for the reforms of the Deng Xiaoping era and the country’s huge economic success. Those gains, in turn, make China confident and strengthen its hand in talks with the Trump administra­tion that will ultimately come.

The advances are also the biggest thing China has to lose. The stronger China’s position, the more it has the scope — and necessity — to offer concession­s to stave off a conflict.

The convention­al wisdom is that the US has a lot to lose as President Donald Trump pressures Beijing with tariff threats and Beijing responds in kind. At the Harvard College China Forum this past weekend in Boston, speakers pointed out that China isn’t entirely unassailab­le.

China’s current geographic security, especially in contrast to the past two tumultuous centuries, may offer a potential route out of a trade conflict that would injure both countries. After all, Beijing has a much greater strategic game to play: the Belt & Road Initiative. This trillion-dollar vision would

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