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The United States and China have been embroiled in a bitter battle of wills as President Donald Trump adopted a harder stance against Beijing over claims of unfair competition and intellectual property violation. President Trump has issued a series of trade sanctions since 2016, with the divide with China deepening further amidst the ongoing coronavirus pandemic and Chinese attempts to expand its influence over Hong Kong and the South China Sea. Agathe Demarais, Global Forecasting director at the The Economist Intelligence Unit (EIU), suggested the tensions could further extend into more sectors in addition to trade as the two countries seek to secure “global economic dominance” over each other.
Speaking to Express.co.uk, Ms Demarais said: “We’ve been saying at the Economist Intelligence Unit for about two years now, since the trade war started, that the trade war between the US and China is not really about trade.
“It’s about a struggle for global economic dominance because if we take a look at the data, China is soon going to pass the US as the first and the biggest economic power in the world.
“We think there’s a rivalry playing out and it’s playing out in three areas especially. The first one is obviously trade, we’ve seen it with all the tariffs, the trade action, all the craziness.
“And though it’s relating to trade, it’s actually shifting to investment controls and intellectual property theft, that kind of topics.”
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Ms Demarais continued: “Then there’s another areas which is technology.
“The US and China are both struggling to be the world leader in technology and I think that what it really is is that the US is worried about losing its technological predominance in the global scene.
“We’ve seen some recent moves, we’ve seen all the export bans to Huawei, we’ve seen the US’s willingness to ban TikTok.
“We see a lot of movement in this area with the US taking measures to slow down the rise of China as a tech superpower.”
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The United States spearheaded efforts to have Huawei technologies from domestic 5G networks, a decision that later inspired the UK Government to also order British providers to remove Huawei parts from their networks by 2027.
And Donald Trump earlier this month warned video platform TikTok could be banned from the US over concerns the service’s mother company ByteDance could provide users’ data to the Chinese Government. ByteDance has rejected any claim of collaboration with Beijing.
The EIU forecaster added: “And finally the third area that is a pressure point is finance because nowadays the globalisation, financial ties are at the very heart of everything, at the heart of the global economy.
“What we think is going to happen is that this rivalry is going to claim the financial sphere and this is going to especially the case with financial sanctions.
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“I would expect the US, in the medium-term, to impose financial sanctions on Chinese banks.”
The assessment echoed a warning from a former People’s Bank of China advisor who insisted Beijing should be prepared for the US to seize financial assets.
Economist Yu Yongding suggested President Trump could follow in the footsteps of his predecessor Barak Obama, who in 2012 set sanctions on the Bank of Kunlun for financing deals with Iran.
Mr Yu said: “The financial sanctions could be done in a variety of forms, targeting banks or certain industries.
“This possibility can’t be ruled out.”
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