On the Margin: China – A Cold War with Benefits

Pence’s much-anticipated China speech yesterday lays out The Trump Doctrine, a strategic outlook that denies either decoupling from China, or destroying it. It’s not a truce, but a cold war – and a cold war in which there is continued economic engagement being tuned to greater US benefit. This appears to resolve the risk that Trump’s real aim is to permanently disable the Chinese economy. It confirms that Trump sees the US in a multi-year struggle for trade and political reform, in which the trade dimension will remain unresolved across the 2020 election. Trump believes he will benefit from a tough-on-China platform that has already stolen elements from that of Warren; and China is complicit in providing this benefit. This slows the headlong push of China toward the cliff of a disorderly recession, and is consistent with a risk-back-on stance in global markets.