The Syrian crisis must not conceal the other current factors of instability. Tension between the U.S. and its allied nations and Russia will wane as soon as situation in Syria calms down. Economic consequences of the sanctions will be limited at the world level. It won’t be the same if a real economic war opposes China and the U.S. It is the whole international trade organization which could be affected. Despite its defects and the exceptional imbalances that system has sometimes generated, it has permitted a continuous trade development for more than fifty years and it is, according to the usual expression, along with democracy, the worst one with the exception of all the others. To put it in question is a dangerous bet. But for the two protagonists, the stake is not the same. Due to their leader characters and the situation of their countries, the game is unequal.

The wise Man has said:” Be subtle to the point to be invisible. Be mysterious to the point to be unpredictable. Then you will control your rival fate.” It is not sure that Donald Trump has understood the full significance of these principles which are at the heart of the Chinese strategic culture. His many declarations, his turnarounds and his in black and white words are taking away from his action any subtle or mysterious character. So it is very unlikely he has any hold on his rival. To the opposite, the Chinese president is well in keeping with that logic. When he announces in 2013, his “New Silk Roads” project, few are those who measure the full significance of what was going to be the international economic strategy of the country. The following year, in the China national Museum, in Beijing next to Tien An men square, an exhibit which displays manuscripts, works of art and maps shows what was, a thousand years ago, the first attempt to develop trade between Europe and the Middle Empire. When, in 2009, just after the major financial crisis and the recession which followed it in Western countries, China Central Bank chairman Zhou Xiaochuan launched the first steps of the internationalization process of the Chinese currency, the Yuan, once more, very few are those who did understood the importance of the project. In 2016, the Chinese currency entered the currencies basket which is used to calculate the value of SDRs and got the statute of a reserve currency.

The contrast between the volatility of the thought and the action of American leaders and the determination of their Chinese counterparts is going along with a deep lack of understanding by the first ones of the cause of the economic and financial disequilibrium between the two countries. Considered measures will only make them worse. The first loser of a trade war will be the American economy. In Washington, it seems to be ignored that the expansion of Chinese industry and exports was, by large, the result of American companies decisions which organized their supply chains in China to reduce their production costs and to transfer the benefits to their customers. Major retailers, including Walmart, have chosen there their suppliers. Trade deficit between the two countries is the consequence of decisions which were not made in China but in the United States. The trend will slow with the continuous rise of the level of life of the Chinese population and the reduction of the production costs gap. Chinese last foreign trade numbers are revealing. The trade surplus, even with the U.S., shows a clear reduction, even if it is still substantial with near to 60 billion dollars. China growth, during the same period remained solid (6.8%) thanks to internal demand. The rebalancing, expected by authorities in on a way but it has not yet reached all its objectives because it is investment and not household consumption which is its major engine.

The second trial done by Washington to Beijing is about the technological looting carried out by Chinese companies through technological transfers and leonine contracts. But it is a rearguard fight. The hundreds of thousands young engineers who are  Chinese leaving universities will not have, in the future, difficulties to compete with their counterparts from California or Massachusetts. They are universal practices which have permitted growth everywhere in the world. In France, national nuclear technologies had failed. It was necessary to use nuclear reactors designed by Westinghouse. Ten years later, Framatome, the French nuclear engineering company, was able to conceive its own models and to export them without asking the permission to the American group. On the opposite, Alsthom mastered the high-speed train technologies. The company, afraid by the risk of losing the control of the market, refused to make an alliance with Chinese companies and to bring to them its know-how. We know what happened after. There are today 2 500 kilometers of lines in France and 25 000 in China.

The United States have much more to lose in this conflict than China. Its twin deficit, public and external, is highly financed by Beijing which became, over passing Japan, its most important creditor. The degradation of the relationship between these two countries could affect financial international stability. If Washington persists in its projects, the American consumers will pay the taxes on imported products whose most important share cannot be produced in the U.S. American companies will lose competitiveness if their supply chains are impacted and they will need years to reorganize them. Regarding American exports toward China, they will be affected by retaliatory measures, with the highest benefit for Brazil for instance with soya and South Korea with passenger cars. Regarding measures against acquisitions of strategic activities, the American administration, like all its counterparts, Chinese included, have the appropriate instruments to block them and have never renounced to put them into practice, as it has just happened with the decisions against Chinese telecommunication equipments maker ZTE.

During that time, Beijing is pursuing its financial strategy. The Yuan has been reevaluated by near 10% against the dollar in 2017 and can be hardly qualified as manipulated. The passed excesses in abroad investments financed by debt of several private companies have been slowed because they could affect the country stability. Market connections are developing and the agreement between London and Shanghai stock markets will offer to foreign investors an easier access to Chinese shares. Off-shore bond market in Yuan has rebounded since the beginning of the year. At last, the government has decided to progressively soften the rules about foreign investment in China. Investment funds and asset management firms with a majority of foreign shareholders will be authorized. Car manufacturers also will have progressively the possibility to operate in China without a local partner.

These created tensions, if they stay, will incite China to much more diversify its outlets and reinforce the country in its economic foreign policy renamed Belt and Road Initiative. Infrastructures projects in Central Asia and even to Europe will benefit to its exports. They will support neighboring countries dynamism and contribute to increase Beijing influence on that part of the world. Is it really what Washington is looking for ?