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America Must Face Reality on China

For all the economic rivalry and political disagreement between the United States and China, a catastrophic outcome is unlikely, so long as the US faces reality in three ways. Above all, Americans should recognize that trying to defeat or contain China economically will not solve their problems at home.

BEIJING – The agreement in Buenos Aires last December between US President Donald Trump and his Chinese counterpart, Xi Jinping, led many to assume that the two countries’ trade war would soon be over. Although such optimism is misplaced, so are fears of a global economic meltdown caused by a rupture in US-China relations.

Frequent bilateral skirmishes will no doubt continue, as we saw with the arrest in early December of Huawei CFO Meng Wanzhou. But for all the economic rivalry and political disagreement between the United States and China, a catastrophic outcome is unlikely, so long as the US faces reality in three ways.

For starters, US policymakers need to accept the “new normal” of a China that boasts the world’s largest GDP (in purchasing-power parity terms). Just as the US was the largest economy in the twentieth century, China will be in the twenty-first. But under any scenario, America will of course remain a major economic power.

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