US-China tension may escalate, according to Eurasia Group. The world's top two economies may fight each other in many more ways.
“There’s a lot of room for escalation here. I think that it’s, by now, quite clear that we’re in for the darkest chapter yet of U.S.-China relations,” Todd Mariano, director for U.S. at Eurasia Group, said during CNBC’s “Squawk Box Asia” on Thursday.
“We’re seeing moves now more on the technology and export front. I think the troubling sign is simply the multiplicity of fronts at which the two countries are fighting or preparing to fight,” he said.
US-China tension is rooted in several areas, such as their trade imbalance and competition in technology. This sparked a tariff war that may damage the world economy.
US and China have fought over a wider range of issues, including the origin of the coronavirus and Hong Kong's autonomy.
White House National Security Advisor Robert O’Brien said that China may face US sanctions due to the national security law it proposed for Hong Kong.
"Lose-lose" situation
The US-China conflict is a “lose-lose” situation for both sides, according to a political science professor from Harvard University.
Graham Allison, Harvard’s Douglas Dillon professor of government, said that the tension between the world’s major economies, US and China, may worsen. He added that the result is a “lose-lose” situation for both sides.
“The endgame will probably be lose-lose,” he said during an interview with CNBC’s “Squawk Box Asia."
“I think this will be worsening across the board and I hope that they don’t do any permanent damage,” said Allison. He served as assistant secretary of Defense under President Bill Clinton and special advisor to the secretary of Defense under President Ronald Reagan.
Allison pointed out that the US-China conflict could lead to the collapse of the phase one trade deal and resume with the blame game over the origins of the coronavirus.
Trump vs. Biden
Analysts believe Beijing may still prefer Trump to be win the US presidential elections over his Democratic rival, former Vice President Joe Biden, Reinsch said during CNBC’s “Street Signs Asia."
“I’ve asked that question to a bunch of Americans doing business in China and they all said the same thing: They think that the Chinese prefer Trump to be reelected,” Reinsch said.
“They believe that the Chinese think that the damage that Trump is doing to the western alliance is greater than the damage he’s doing to them. And so, they net come out better,” he said.
Cold war
Some also noted that rising US-China tensions could spark a Cold War. However, Cheng Li, a researcher from Brookings Institution, said neither country is prepared to face that even though relations faded too early.
“I don’t think policymakers (on) both sides are really ready for such a war,” Li, director of the John L. Thornton China Center and a senior fellow in the foreign policy program at Brookings, told CNBC’s “Street Signs Asia."
“I think the war will be devastating, there will be no winner,” he added. “I think this war should and can and must be prevented.”
