Despite escalating tensions between the US and China, they are not in a new “cold war,” said a former high-ranking diplomat from Singapore, Bilahari Kausikan, on Wednesday.
From trade and technology conflicts to the origins of the coronavirus pandemic and a new law in Hong Kong, the world’s two largest economies are currently at odds on multiple fronts.
“I don’t think they’re on an inevitable collision course. People forget a big factor ̵
“That doesn’t mean it can’t happen by accident, but it is unlikely,” said Kausikan, who was formerly Singapore’s Permanent Representative to the United Nations and previously served as a permanent secretary to the State Department in Singapore.
“On the other hand, I don’t think it’s the new Cold War,” he said, pointing out that the former Soviet Union and the United States were “only very tangentially linked economically.”
The national flags of the United States and China were flying in front of a building.
The Eng Koon | AFP via Getty Images
In comparison, China and the United States are currently so closely linked and much more closely linked that it will be very difficult for both sides to decouple.
While China has played up to the current protests in the United States, the state media sometimes take it easy, China is not unaware of its own problems, Kausikan told CNBC.
“They’re probably enjoying the show, but I don’t think they’re without their own worries,” said Kausikan, who is currently chair of the Middle East Institute at the National University of Singapore.
China needs more economic power than the United States to legitimize the rule of the Communist Party, he said.
Given the global economic performance hit by the coronavirus pandemic and hitting demand hard, Chinese growth can only really recover if the rest of the world does so, he said, and this will affect social mobility.
Beijing’s emphasis on “one country”
China approved the plan to introduce national security laws in the Chinese city of Hong Kong last week. It comes in the midst of protests against the erosion of freedoms on the territory as the new law will bypass the city’s legislation.
Since Hong Kong’s sovereignty was handed over to China by the United Kingdom in 1997, it has been governed by the “One Country, Two Systems” framework that provides cities with freedoms and limited autonomy, such as those of mainland China, that do not have Speech and the right to protest.
China says Hong Kong will also maintain its autonomy with the new law, which aims at secession, subversion of state power, terrorism and foreign interference. However, those who oppose the law say that this will further limit Hong Kong’s autonomy and give the central government greater powers to control disagreements.
“I don’t know why anyone is surprised by China’s move,” said Kausikan. “‘One country, two systems’ – Beijing’s focus has always been on ‘one country,'” said Kausikan.
“The level of autonomy Hong Kong has enjoyed since 1997 is based on Beijing’s permission and favor,” he said, adding that the extent of this depends on Hong Kong’s sense of boundaries and self-control.
“There are a significant number of people in Hong Kong who don’t know the borders,” he said, citing earlier protests for democracy before last year, such as in 2014. It has also become increasingly clear that the city administration has done so has been unable to control the riots.
While people in Hong Kong could suffer the consequences of recent developments, he said that it will not matter to China.
“Does Beijing care? I don’t think it’s that important,” said Kausikan. “It’s just another Chinese city.”
This is because Hong Kong’s economic importance for China is declining.
According to Reuters, Hong Kong contributed only about 2.7% to Chinese GDP last year, compared to more than 18% in 1997 when it was handed over to China.
While investors used to need Hong Kong to enter the Chinese market in the past, they can now do so, albeit with some inconvenience, straight to the mainland as Beijing opens up access to its markets.
“Hong Kong’s historic role as a mediator between the rest of the world and China has been eroded and will continue to erode,” he said.