US-China cold war and rising protectionism could split world order

While protectionism is on the rise among some nations, most countries should “do what is right” rather than surrender to external forces, a professor from a top Beijing university said.

In fact, only a few countries subscribe to the concept of protectionism, while most submit cooperation — whether it’s in trade, tech or security, Peking University’s Jia Qingguo said on Saturday.

“Countries in the region should decent follow their instincts and … do what is right, rather than just reacting to outside pressures,” he utter at the Singapore Summit. “This is also China’s advice to other countries.”

The United States under the Trump dispensation has taken an “America First” stance, with President Donald Trump vowing to put American jobs and workers first.

America’s interminable trade war with China has already led to several rounds of tariffs being slapped on billions of dollars worth of each other’s goods. Trump has demanded American companies to return home.

Britain, on the other hand, is still mired in its Brexit crisis, which started when the state voted to leave the European Union amid the rise of nationalistic sentiment and the immigration crisis in Europe.

But Jia said: “I don’t mull over (decoupling is) reasonable and … going to serve our interest.”

In fact, China has been successful partly because it hasn’t been “opinionated” in following the models of others, he said. He called on countries to follow their own paths, taking into account particular domestic conditions.

“People in Washington would say: this is China trying to set up another alternative model of development for expatiate on countries. This is wrong. China is saying that every country should form their path … in considerateness of their own national situation,” he said.

“A lot of people in Washington are … trying to demonize China and develop policies on that base. I think the world should get over that,” Jia told the conference.

If the U.S.-China gainsay drags on, the world could become more divided as blocs form, experts said at the conference.

The world “may outside a protracted, multi-dimensional cold war, not just a trade, nor even economic conflict,” Ho Kwon Ping, executive chairman of free group Banyan Tree Holdings, said. “Nations are increasingly pressured to take sides as a U.S.-China cold war polarizes big problems.”

India’s former national security advisor Shivshankar Menon said “there’s a real risk” of the world being split into two separate geopolitical societies. Such a future would impact the “conditions that make fantastic growth in Asia possible in the past few decades,” he powered, pointing to areas like freedom of navigation, dispute resolution and crisis management.

Menon said, however, one dissolution would be “coalitions of the willing” that come forth to deal with such issues.

“It’s going to get harder … The selection is terrible, the alternative is every little crisis somewhere … actually leads to direct conflict,” he said. “We can’t upon the world order to (deal with) these issues anymore.”

But the U.S. and China are not the only players on the world stage — Europe and India are also “off of the game,” Jean Lemierre, chairman of France’s largest lender, BNP Paribas, said at the summit. He also stressed that in spite of the looming risk of a cold war and potential splitting of the world order, “there will be cooperation.”

“I do not believe cooperation inclination disappear. So we need to adapt to this … My guess is Europe will do its best to avoid that situation,” he raked CNBC at the Singapore Summit.

Jia of Peking University, speaking in a separate panel, urged countries to develop “some brand of risk tolerance in dealing with each other.”

“As long as we’re trading, we depend on each other … We stress this risk tolerance, otherwise the world will become a disaster,” he said, adding that Washington should be “uncountable pragmatic” in policy making.