Prepare for a long conflict with US, Beijing adviser says

Pei Changhong believes fundamental differences will doom the meeting between Trump and Xi

Beijing should prepare for extended conflict with Washington, because their fundamental differences cannot be resolved in a brief meeting of top leaders, a government adviser has warned.

“We shouldn’t and can’t accept the US-imposed terms for a ‘ceasefire’. The trade war won’t end in two or three years and we should make long-term mental preparations,” Pei Changhong, former director of the Institute of Economics at the Chinese Academy of Social Sciences, a government think tank, said.

US President Donald Trump was using the trade war as a tool to blackmail Beijing for economic concessions, but the fundamental American strategy was to contain China, he argued. “Suppressing potential rivals is a political tradition in the US, no matter who is in office,” Pei, a member of China’s top political advisory body, wrote in an article posted online.

The warning, made just two days before President Xi Jinping and Trump meet after the G20 summit in Argentina, comes amid expectations that the two leaders will reach an agreement to avoid an escalation of the trade conflict, at least temporarily.

But Pei predicted that relations between the world’s two largest economies will remain difficult in the years ahead, complicating China’s economic development. The reform and opening up initiative started by the late paramount leader Deng Xiaoping transformed China from a poor agricultural country into the world’s top exporter and the second-largest economy. Its transition, spurred by its entry into the World Trade Organisation in 2001, was largely supported by Washington until recently.

Washington’s U-turn in attitude came after the US decided that China was a threat economically and strategically, saying that Beijing had taken advantage of global free-trade rules.

Pei said the US was, in essence, demanding that China give up its government-led growth model and political system. According to him, China was moving forward with market-oriented reforms but it will not adopt the same economic system as the US.

It had already achieved considerable progress in building a market economy and opening up its market, Pei said.

“The problem is that everyone uses US standards to measure [progress] … The US always uses its own values and standards to judge others. Isn’t that typical of chauvinism and hegemony?”

Despite Beijing having announced a series of market-opening measures earlier this year and repeating its pledge to enact further reforms, Pei said those steps were based on China’s own needs and were not the result of foreign pressure. “China has its own timetable and road map,” he said.

Pei said time was on China’s side, given its political system and its huge consumer market.

“China won’t be defeated, because it’s not the Soviet Union. China is not Japan either and it won’t accept the Plaza Agreement,” he said, a reference to the 1985 currency accord among developed nations to depreciate the US dollar against the yen and deutschmark, which many analysts argue was a major contributing factor to Japan’s economic stagnation in subsequent years.

Suppressing potential rivals is a political tradition in the US, no matter who is in office

PEI CHANGHONG, GOVERNMENT ADVISER