Pancreatic cancer and trade war

By Lee Seong-hyon

I gave a talk on the U.S.-China trade war to lawmakers at the National Assembly last week. My host introduced the topic as "timely." I corrected him.

"It's not a timely topic. It's a lot late for us to realize it now and discuss it here. It's like pancreatic cancer. Once you realize something is wrong and go to hospital, the doctor will tell you that you have six months left to live. We have to take the matter seriously, very seriously."

First, indeed, we're heading into the Thucydides Trap. It's a not self-fulfilling wish, but reality on the ground. Face it. The essence of the U.S.-China trade war is not about "trade" but "war." It's about competition for "supremacy" for future global leadership. It is the clash of two civilizations. Kiron Skinner, the U.S. State Department's policy planning head, said it. The U.S. government toned it down later, after realizing it spooked the world. But what is, is. Things are as they are.

Second, it will be a long-term process, taking one generation. Chinese leader Xi Jinping wants to realize the "great rejuvenation of the Chinese nation" by 2049. That's when China aims to surpass the U.S. and become the sole superpower on the planet. The year is also the 100th anniversary of the founding of the People's Republic of China.

The trajectory of U.S.-China relations will include momentary compromises and deteriorations, temporary agreements and then deteriorations, photo-op handshakes and then deteriorations again. It will repeat this process several times. Overall, it will look like a "downward equalization parabola" as a whole. Negotiations between the U.S. and China are not a search for a solution, but a process of divorce.

Third, unlike some common anticipation, China will not surrender. Most experts in the early days of the trade war expected China to say "ouch" and give in early. They were underestimating the size of China's ambition. China sees the current state in history as a "period of strategic opportunity" to leapfrog China's development to outstrip the United States. In Xi's words, it is the period of "the big transformation that comes once in a century" (bainian wei you zhi da bianju).

China sees Uncle Sam as a declining superpower under the leadership of Donald Trump, a political rookie who has been alienating allies and partners, who undermines the global governance structure the U.S. itself built, who distances himself from the very ethos of what makes America great: democracy, freedom, the rule of law and human rights.

China was more than delighted when Trump didn't make any mention of human rights during his visit in November 2017. He was the first U.S. president not to do so. China saw it as a "paradigm shift" in U.S.-China relations.

China is ready for a long-term competition. Although it may suffer in the short term because it is deprived of opportunities in the U.S. market, it plans to work harder to network with "the rest of the world," deepening cooperation, luring them with economic incentives and exploring exclusive opportunities.

Fourth, South Korea may experience more difficult times ahead than what it underwent during the 1997 Asian financial crisis (South Koreans dub it "the IMF crisis"). The U.N. body ESCAP already predicts South Korea is likely to suffer the biggest fallout from the trade war between the U.S. and China. While "the IMF crisis" was just about a financial crisis, the U.S.-China trade war is much more than that. It also has huge implications for national security and alliances.

Historically, the security of the Korean Peninsula has been most vulnerable during the process of "power transition" in neighboring powers due to its strategic location in regional geopolitics. In fact, the 1950-53 Korean War was a proxy war between the U.S. and China. The Korean Peninsula became their battlefield.

I am not saying there will be a war on the Korean Peninsula again. But South Korea will suffer enough and suffer dearly. It will be an existential challenge. South Korea should take the matter very seriously. It should first examine whether its current "strategic ambiguity" between the U.S. and China will hold water and sustain the posture. The nightmare of being forced to choose between Washington and Beijing may be nearer than it thinks. It's an uncommon time for South Korea. It needs uncommon wisdom.

Lee Seong-hyon (sunnybbsfs@gmail.com), Ph.D., is director of the Center for Chinese Studies at the Sejong Institute.

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