What is at Stake in the US China Trade War?

Business world breathed a sigh of relief after US and China reached a tentative ceasefire in Buenos Aires last night. The trade war has caused significant ripples all over the world, and much more are at stake than just the trade between US and China. The dispute is far from over but the pause at least gives the two sides an opportunity to step back and reflect.

I lived about half of my life in China and the other half in the US. Far from a Chinese expert, but being someone who witnessed in first hand of the Chinese economic transformation in the last forty years gives me a perspective to see China in different lens. 

Here are a few facts about China to give you a sense of the size of China and Chinese economy, and also the pace of change in the last few decades. Due to the vast size of the population and world second largest economy (https://www.visualcapitalist.com/80-trillion-world-economy-one-chart/), any changes in China would automatically have an outsized impact, both economically and politically, at a global scale.

• According to World Bank, 800 million people were lifted out of poverty in the last 40 years in China. It is equivalent to more than two times of the total US population. 
• Chinese economy has “slowed” to about 6-7% growth after double digit growth for over thirty years, but 6-7% of growth in China is equivalent to adding the total economy of a new Netherlands every year.
• 260 million people lives in the fifteen largest cities in China, almost the total US population.
• Many in the western world probably never heard the app, but there are over one billion (yes, it is not a typo) WeChat users in the world.
• Since the 17 kilometer Shanghai-Jiading Expressway was first opened in October 1988 thirty years ago, the total length of China's expressway network reached 136500 kilometers, or 85000 miles, the world's largest expressway system by length, surpassed the overall length of the American interstate highway System in 2011.
• 272,971 students went to college in 1977 after China resumed official college entrance exam for the first time since 1965. In the recent year of 2016, China produced about 4.6 million STEM graduates, more than the total graduates of the next five highest countries combined.
• The Chinese economy today is about 32 times of that forty years ago. During the same period, the US economy has increased by about 8 times.
• While current US administration would like to spend $1 trillion over the next ten year on infrastructure, China has spent $11 trillion on infrastructure in the last ten years.

It is not surprising that US and China are both adjusting to the new reality of the growing weight of Chinese economy in the world. With the distinctively different histories and political systems between the two countries, it is inevitable that there will be frictions, dissonances and even confrontational struggles along the way. However, the peace and prosperity of the world depend on whether China and the United States can find a way to work together, not always in agreement, but to take the leadership and make decisions about the disagreements in a constructive and mature manner.

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