A ‘Bigger Global Threat Than Virus’ Is US China Cold War, Says Top Economist

Influential economist Jeffrey Sachs believes that it is not the novel coronavirus pandemic but the deepening cold war between the United States and China will turn out to be a much larger threat to global economy.

In an interview to the BBC, Sachs said after the end of the current bout of the pandemic, the world will be pushed into a period of “massive disruption without any leadership”.

He warned that this would be exacerbated by the tensions between the two largest economies of the world.

The US administration was blamed for the current tensions between the two countries by the Columbia University professor. “The US is a force for division, not for cooperation,” he said during the interview with BBC.

“It’s a force for trying to create a new cold war with China. If this takes hold – if that kind of approach is used, then we won’t go back to normal, indeed we will spiral into greater controversy and greater danger in fact.”

In recent days, tensions and disagreement between the United States and China have spurred for causes other than the existing trade tensions. US sanctions against Chinese officials who are believed to be responsible for the repression of Muslims in Xinjiang province was signed into legislation by the US president Donald Trump this week.

Additionally, Trump believes that China could have intentionally encouraged the international spread of the novel coronavirus so that its competing economies could get destabilized, he said in a recent interview with the Wall Street Journal.

Further, while imposing a ban on the Chinese telecom equipment making giant Huawei and preventing the company from using US chip technologies, the Trump administration is allowing American companies to collaborate with the Chinese firm on development of 5G standards

Chinese companies, in particular Chinese telecoms giant Huawei, have been targeted by the Trump administration over charges that the equipment of the company can be used for spying on American users by Chinese agencies which threatens national security of the US. Such allegations have been refuted by Huawei.

Targeting Huawei was never simply a security concern, agreed Professor Sachs.

“The US lost its step on 5G, which is a critical part of the new digital economy. And Huawei was taking a greater and greater share of global markets. The US concocted in my opinion, the view that Huawei is a global threat. And has leaned very hard on US allies… to try to break the relations with Huawei,” he said.

However there are a host of other countries that China has run into problems recently.

Tensions at the Indo-China border last week resulted in the death of 20 Indian soldiers in some of the worst violence the two sides have seen in almost fifty years.

On the other hand, intensive investments by China in economic projects in Pakistan, Myanmar, Sri Lanka and Nepal have stoked concerns in India that China;’s ultimate strategy is to weaken India’s influence in the region because all of the countries mentioned above are direct neighbors of India.

The rise of China is a cause of concern for its neighbors in Asia particularly because China is providing little signals that it wants to grow in a peaceful and cooperative way, Sachs admitted.

“Do I believe that China could do more to ease fears which are very real? I do,” he told me.

“The big choice frankly is in China’s hands. If China is cooperative, if it engages in diplomacy, regional cooperation and multilateralism, in other words – soft power – because it is a very powerful country…. then I think that Asia has an incredibly bright future.

(Adapted from BBC.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Uncategorized

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