The U.S. and China could slip into a ‘new cold war’ that pushes countries to pick sides
|Date | 01-10-2020 - 10:13 AM||Article Type | Stock Markets||Region | World|
- The new “cold war” could last a generation, and may be a “global economic, military and ideological struggle” between the U.S. and China, said Darren Tay of Fitch Solutions.
- A split between the world’s two largest economies would likely force Southeast Asian countries to take sides, he said — even though they would want to be “pragmatic” and remain friendly with both countries for as long as possible.
- Tay also said it would be difficult for Asian nations to resist “the pull from China’s gravity in terms of its size and its influence,” but that’s not to say they will all side with China.
SINGAPORE — The U.S. and China have “diametrically opposed values” and will eventually slip into a “new cold war” in the coming decades, said a China analyst from Fitch Solutions.
“By a new cold war, I mean an all out, perhaps generation long, global economic, military and ideological struggle that could lead to a bifurcation of large parts of the world into a pro-U.S. bloc and a pro-China bloc with significant numbers of countries caught in between,” said Darren Tay from the Asia country risk team at the data research firm.
The split between the world’s two largest economies would likely force Southeast Asian countries to take sides, he said, even though they would want to be “pragmatic” and remain friendly with both countries for as long as possible.
“Being in Asia, the pull from China’s gravity in terms of its size and its influence would be hard to resist,” said Tay during the firm’s Asia Macroeconomic Quarterly Update virtual seminar on Monday.
“That’s not a knockdown argument to say that they will all side with China in that case,” he added. “But there is that risk to consider.”
Explaining what he meant by an “ideological stand-off” between the U.S. and China, Tay referred to a Chinese Communist Party memo circulated in 2013 that identified constitutional democracy and freedom of the press as some threats to the party’s authority. He pointed out that these are what the West considers universal values.
Tay said the technology sector has already become a battleground for the U.S. and China, and is likely to see the largest divide if relations do not improve.