Escalating US-China Spat: No End in Sight

Summary

• The UN Secretary-General has recently warned that the world cannot afford a future where the two biggest economies divide the globe in a great fracture.
• The focus of the US-China dispute has seen a shift from trade tariffs towards virus spat, tech feud, and human rights abuses.
• The US President has recently blasted China for unleashing the coronavirus plague onto the globe.
• The Chinese-owned applications, WeChat and TikTok, are now a part of tech feud between the global superpowers.
• The US has recently decided to block some exports from China’s Xinjiang region, accusing the use of ‘forced labour’ in producing these goods.
• It is hard to neglect that the standoff between the world’s two largest economies is more likely to be a lose-lose situation for both nations.

At the time when the entire world is collectively fighting the battle against the Global Virus Crisis, the world’s two largest economies are busy settling their scores on COVID-19 origin, technology sharing and human rights abuses grounds. By elevating their tit-for-tat attacks, the US and China seem to be downplaying the severity of virus spread and posing an inescapable risk to the global economy.

Addressing the 75^th session of the UN (United Nations) General Assembly, the Secretary-General Mr Antonio Guterres has recently warned that the globe cannot afford a future where the two biggest economies divide the globe in a great fracture. Concerned over the US-China rivalry, he emphasised that the world must avoid this split at all costs.

While the ties between the US and China have been deteriorating since the onset of the trade conflict in 2018, the focus of dispute has been shifting away from trade tariffs over the last few months. Fears loom over other countries catapulting into the fray of geopolitical tensions between the US and China.

Against this backdrop, let us discuss three such areas of emerging feud between the two world powers:

Origin of the Novel Coronavirus

While addressing the UN General Assembly, the American President, Mr Donald Trump has recently blasted China for unleashing the coronavirus plague onto the globe. The COVID-19 storm, which originated in Wuhan, has so far infected over 31 million people worldwide, with the US leading the chart in terms of coronavirus cases with over 6.9 million infections (as on 24 September 2020).

Mr Trump has accused China of locking down domestic travel in the earliest days of the virus while allowing overseas flights to infect the world. Moreover, the US President lambasted China for concealing the initial evidence that the coronavirus can transmit via asymptomatic people and from human-to-human.

At the time when the US demanded China’s accountability for the virus spread, China urged other nations to discard any effort to politicise the health crisis. Whether China is attempting to cover-up Wuhan virus or Mr Trump is deflecting attention from his virus handling ahead of elections remain a subject of debate.

Technology Tussle

The Chinese-owned applications, WeChat and TikTok, which have been one of the popular social media trends for millions of Americans, are now a part of tech feud between global superpowers. The US Commerce of Department recently issued an order to ban new downloads of WeChat and TikTok amidst concerns of national security threat to American users.

However, the US seems to be loosening its strings on the technology tussle a bit.

Back in August, Mr Trump warned TikTok to face a ban in the US market if not bought by an American entity by 15 September 2020. While TikTok-owner ByteDance did not let the innovative technology fall entirely into the US hands, it recently agreed to sell 20% stake to American companies, Oracle and Walmart. Besides, a US federal judge has issued a temporary stay against the ban on WeChat.

While the US has sought to restrict the usage of Chinese applications amidst data privacy and national security concerns, the move is set to create a digital divide between the world’s largest economies. Besides, speculations are rife over China taking retaliatory actions against US-based applications, Google and Apple, if relations continue to worsen.

Human Rights Abuses

Criticising China over the human rights abuses, the US has recently decided to block some exports from the Xinjiang region, accusing the use of ‘forced labour’ in producing these goods. The US has announced an export ban on computer parts, cotton, hair products and garments from five entities based in Anhui and Xinjiang provinces.

Earlier in July this year, the US also imposed targeted sanctions on four Xinjiang officials for human rights abuse, freezing their assets and banning their entry in the US. Subsequently, the US also restricted some senior Chinese diplomats from holding cultural events and visiting university campuses in America in response to Beijing’s restrictions on the US diplomats.

The US calls the recent export ban as an action against illicit, exploitative and inhumane practices of forced labour in the American supply chains. However, China condemns the former’s move as an effort to undermine its prosperity and stability. Whatever be the objective, the step is expected to open a can of worms for the US cotton industry, which is heavily reliant on Chinese imports.

Bottom Line

Amidst the escalating US-China war, the US seems to be bleeding more from the conflict than China, with a surging number of COVID-19 cases, weakening dollar, elevated levels of unemployment claims and virus-induced recession. In contrary, China appears to be going from strength to strength with early containment of virus spread, economic recovery signs as evident from August retail and industrial data and strengthening Yuan against the greenback.

However, it is hard to neglect that the standoff between the world’s two largest economies is more likely to be a lose-lose situation for both nations.