Here at our CUSEF blog, we share news, updates and stories about China and the United States. We provide more than a cursory glimpse of what’s going on between the two powers - here, we offer an in-depth look into their current state of affairs.

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‘The China-U.S. Trade War and Future Economic Relations’: entering the “new normal”

‘The China-U.S. Trade War and Future Economic Relations’: entering the “new normal”
‘The China-U.S. Trade War and Future Economic Relations’: entering the “new normal”

In light of the ongoing trade war, Professor Lawrence J. Lau, one of the governors of the China-United States Exchange Foundation (CUSEF), analyzes the future of economic relations between China and the United States in his recently published book ‘The China-U.S. Trade War and Future Economic Relations’.

The Ralph and Claire Landau Professor of Economics at the Chinese University of Hong Kong and Kwoh-Ting Li Professor Emeritus in Economic Development at Stanford University took a closer look at the economic statistics of the past few decades to illustrate an intriguing point: while the economic impact of the China-U.S. trade war is by no means insignificant, it is relatively manageable for both countries. He argues the trade war will instead usher into a “new normal” of continuous technological and economic competition between the two countries. But to ensure stability of this new status quo, leaders in both nations must emphasize the benefits of a positive and stable bilateral trade relationship. As Professor Lau explains, “balancing China-U.S. trade and enhancing economic interdependence are not only possible, but desirable.”

Professor Lau’s assertions come at a time of immense uncertainty in the China-U.S. relationship, as trade negotiations shift rapidly between success and failure leaving citizens and businesses in both countries remain in a state of purgatory. The academic’s argument provides the possibility of a different future, one in which progressive competition prevails over conflict. While this change may cause initial unease, it allows for the prosperity of both the U.S. and China – maintaining their individual prominence while promoting continued cooperation.

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