Business Monday: It’s all about China at Aspen debate
As the tariff war between the U.S. and China heated up even more last week, the majority of an Aspen audience concluded Friday that the Trump administration’s current policy toward the superpower nation is not productive.
The timing of the Oxford-style debate regarding the U.S.’s tense relations with China, hosted by the nonprofit Intelligence Squared and Aspen Strategy Group at Paepcke Auditorium, came the same week President Donald Trump announced the introduction of tariffs on Chinese imports worth $300 billion, the Federal Reserve made its first cut in interest rates in more than a decade and stock exchanges staggered.
U.S. relations with China have triggered concerns about a downturn in the global market, a fact not lost on Nicholas Burns, executive director of Aspen Strategy Group, a division of the Aspen Institute.
“I think this issue tonight is the most important question facing the American people and it will be for the next couple of decades: How do we deal with a stronger, more assertive China challenging us on economics and in trade?” he told moderator John Donvan in opening remarks to the debate.
Contestants in the debate noted the China question isn’t one driven by partisan politics; a number of Republicans and Democrats agree that more aggressive measures should be taken against the country that has been bullish on the growth and development of its infrastructure, technology and military strength.
Kori Schake, deputy-director general of the International Institute for Strategic Studies, joined Michael Pillsbury, a senior fellow at the Hudson Institute and adviser to Trump, in arguing favorably for the motion, stating, “The recent U.S. policy towards China is productive.” While no fan of Trump, Schake said time will tell when it comes to whether the U.S. comes out ahead in the tariff wars.
“I do believe (in) a policy that imposes enough cost on China that they begin to play by the rules of the international economic order, rather than just taking the benefits of partial participation, partial opening of their markets, partial access for others,” she said. “I think in the long run that could be useful, but the president can’t do basic math; he doesn’t understand that American consumers are fighting the tariffs.”
Even so, Schake noted that tariff proponents “make a decent point that us accepting near-term risk to reset the rules that China plays by is a near-term loss that brings us long-term gain.”
The tariff talks also have resulted in a falling growth rate for China’s GDP, which Pillsbury said is a good thing because it shows China is getting the message.
“The Chinese are very worried about this,” he said. “President Trump in some ways has encouraged their worrying because he said six times now on different TV shows that if Hillary Clinton had won, China would be surpassing America now during her term, and ‘this is not going to happen on my watch.’”
Yet Jake Sullivan, former national security adviser to Vice President Joe Biden, said the GPD growth-rate drop is not significant enough to show that recent U.S. trade policy with China is having its desired effect. Sullivan, along with Graham Allison, who was Bill Clinton’s assistant secretary of defense, argued against the motion.
“If going from 6.7% GDP growth last year to 6.2% of China GPD growth this year, if that’s your measure of a productive policy, we are going to lose over the long term,” Sullivan said. “Because at the end of the day, while we are imposing these tariffs and American farmers and consumers are paying all the costs while China lowers its tariffs for everyone else, we are focused on steel, soy, coal. China’s focused on quantum computing, AI, biotechnology. They’re not thinking about their growth rate in next quarter; they’re thinking about their growth rate in the next quarter-century.”
Sullivan also made the case for a prosperous China, so long as it plays by the rules.
“It’s all fine and good to think about how to slow China down,” he said, “but I believe that the most unproductive policy of this administration has been to not making investments that would make America run faster and win the economic competition.”
Allison and Sullivan’s arguments also won over the audience, which before the debate voted 26% in favor of the motion, 51% against it, and 23% undecided.
At the debate’s conclusion, 83% said they did not find U.S. policy toward China productive, while 15% said they did.
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