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China prepares for Cold War


On Wednesday, the People’s Daily ran an important op-ed by Long Guoqiang – deputy head of the State Council’s in-house think tank, the Development Research Center.

Long voiced what is quickly becoming the consensus view on American motivations for a trade war:

Long believes it's all a bid to contain China, just as the US did to the Soviet Union.Yep, that's right – Long sees this as the beginning of a new Cold War.

Long also reiterated China’s basic game plan.Don’t turn up the heat.But continue to match the US action for action. Be ready to resume negotiations any time.Meanwhile, Long suggests these domestic support measures:In the short-term, offer government assistance to companies hit by the tariffs – finding new markets for exporters and substitute sources for imports.In the long-term, avoid errors made by the Soviet Union – in other words, don’t abandon the domestic agenda.

Get smart: Long’s piece appears to reflect the thinking of top officials, so it should be closely read.

Get smarter: China's leadership no longer sees this as a trade spat, but rather as an attack on China’s basic political and economic models. That’s not a recipe for de-escalation.

People's Daily: 理性认识当前的中美贸易摩擦(人民要论)


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