The China-US Endgame: War or Trade?

Wang Yi, director of the Central Committee Foreign Affairs Office of the Chinese Communist Party, and U.S. National Security Advisor Jake Sullivan met in Vienna, Austria, on May 10 and 11. Their meeting took place over two days, lasted for eight hours, and was so spontaneous and protracted that all parties were naturally curious about what the two discussed. Common sense dictates that first, of course, it was something important; second, it was pressing; and third, it was a matter requiring the attention of both parties.

We must first look at the broader context. The context is that the U.S. is in a hurry, while China, relatively speaking, is not. A number of senior U.S. officials and generals have repeatedly expressed their willingness to visit China and made repeated calls to their Chinese counterparts, which have gone unanswered. This shows that it is the U.S. that is impatient, whereas China’s acceptance of the invitation to high-level bilateral talks in Vienna makes it clear that China believes there may be something to discuss, that it may be worth discussing and that it may be worth discussing at length.

From China’s perspective, there are only two worthwhile things to discuss: the Russia-Ukraine war and the Taiwan Strait. Of course, from the U.S. perspective, there is another topic to discuss, but China may not be happy to take it up, namely the U.S. debt issue. Talking about the latter may not be completely off the table for China, but it depends on how it is discussed.

The Russia-Ukraine war has continued for more than a year. Russia, Ukraine and Europe have all paid a heavy price, and they are in no mood to keep fighting. Even if the U.S. is keen to continue, it has no choice but to respond positively now that China has played its hand (advancing “China’s position on a political solution to the Ukraine crisis” card) and is occupying the moral high ground. China has sent its special envoy for Eurasian affairs, Li Hui, on mediation trips to Ukraine, Poland, France, Germany and Russia, while the Vienna talks between Wang and Sullivan should lead toward more in-depth discussion of both the Chinese and American positions and how each country can help.

The Western media currently regard the Taiwan Strait as the most dangerous region on the face of the earth, and, according to this observer, we can’t rule out that the level of danger will boil over in the next 18 months. In his 2017 book, “Destined for War: Can America and China Escape Thucydides’s Trap?”, Graham T. Allison, the American scholar who first proposed the term “Thucydides Trap,” compiled statistics on 16 relationships between a ruling power and an emerging power over nearly 500 years. Of these, 12 of them — that is, a 75% probability — ended up going to war. As the latest such historical pair, will China and the U.S. become part of the 75% as well? Or will they be spared a war?

Let’s start with the strategic calculations that the U.S. is making. In order to maintain its hegemony, the U.S. must get rid of China, the new second-in-command; there is no question about this. Crucially, the tussle between China and the U.S. is playing out right up to the present moment, and the longer the U.S. wrestles with this, the more worn out it gets. With only two cards left to play and the “technology card” not necessarily being a winning one — if it doesn’t have the opposite effect entirely — the “Taiwan card” is all that the U.S. has left.

Logically, there are two options for the U.S. in playing the "Taiwan card.” One, as suggested by the RAND Corporation think tank in the U.S., would be to engineer a conventional war in the Taiwan Strait. This would induce China to intervene, cause huge damage on the industrial, financial and technological fronts, and could even lead to a social and political crisis, thus completely disrupting the momentum of China’s rise. The U.S. can’t wait to strengthen Taiwan militarily and turn it into an arsenal, and similarly, it is also doing all it can to turn Japan, South Korea and the Philippines into a united front as part of this strategy. But the problem now is that the U.S. seems to have missed its window of opportunity; that is to say, a victory for the U.S. in the Taiwan Strait and the Western Pacific is no longer assured, and the longer things drag on, the less favorable they look for the U.S.

At this point in time, the U.S.’ economic and debt problems look incendiary in the short term and irremediable in the long term, so this observer fears that the only country in the world that can put out the flames and help ease the deep economic crisis is China. In addition, the constantly rising stakes of the long-standing Taiwan issue could not be anything other than a bargaining chip for Beijing. And from the look of things, it is not outside the realm of possibility that this could become an alternative for the U.S., in playing the Taiwan card.

Coincidentally, it was Sullivan who once suggested to Secretary of State Hillary Clinton, his superior at the time, that the U.S. and China might “trade” Taiwan, and he is now national security adviser to President Joe Biden. The Vienna talks between Sullivan and Wang therefore make it hard to avoid making a connection.

The author is a senior commentator for Phoenix Satellite TV.