Trade War Is Lose-Lose Situation Says HSBC's King

US and Chinese officials are discussing arrangements for the highly anticipated meeting between presidents Trump and XI at the g20 in Osaka Trumper said the Beijing must return to concessions had agreed in earlier talks but China's vice commerce minister says the aim of the Asaka meeting would be quote compromise on both sides joining us now is Stephen King HSBC senior economic advisor and author of a grave new world Stephen great to have you with us on the show has to be here how grave is the world gonna look after the meeting this weekend if it happens well we can you know cross our fingers and hope that some kind of deal comes through but I think it's important to recognize that the trade issue is not the only issue that separates the u.s. from China so in one sense it's a symptom of a broader problem and the underlying big problem of course is the fact that China is a rising superpower the US has the established superpower and there's a sense of tension between them I think also the Americans felt 20 years ago maybe that there was a reasonable chance that you would end up with China perhaps gradually shifting towards a more democratic system of government alongside the economic success they've had they've continued to enjoy economic success but they haven't made that shift towards a democracy and I think has meant that the u.s. now feels more uncomfortable with the relationship than might have been previously it's important to stress this is not specifically a donald trump issue i mean some people have said this but i think one thing that unites congress is a kind of anti china rhetoric so this is a difficult issue they I think it's got quite a long way to run beyond what happens this weekend mmm HSBC CEO John Flint made some really interesting comments on Bloomberg earlier about China now it was in the context of concerns around credit and he said look you know has the capacity to self-heal and he pointed to he didn't use the word miracle but to the strength of the Chinese economy as well how big is China's capacity to offset any downside risks from an escalation in this trade war well the trade war itself is unwelcome that's clear for all sides and everyone knows that a trade war is a kind of lose-lose situation but China does have some opportunities for continued growth one of which is that people often forget that China is a story of very very different regional experiences so if you're in the eastern coastal regions you can incredibly well over the last few decades if you and some of the inland regions just feel disconnected from the world you haven't really succeeded in quite the same waise there's a very big income inequality issue between those regions now belt and road which is something that you know people see as China connecting itself with other countries in Asia is also importantly a way of connecting the inland parts of China with the eastern coastal parts of China and if that connection can be made capital flows in line infrastructure begins to improve and the inland areas become a corridor through to the rest of Asia then you could quite easily see China carry on growing quite quickly in the years ahead Stephen King I got good news and then they got really good news your book the grave new world was important two years ago three years ago the bad news is it's even more important now folks because Stephen King addresses technology we're all dealing with this how does your dark side of technology overlay with this trade war well one must want one obvious point I guess is the whole issue of cyber and also just general issues about technology theft and all those kinds of issues that cropped up I think the other issue which is actually more an issue for the West and anything else is the sense that technology through social media has actually taken this further away from what we might think of as being the underlying truth now programs like this of course tried to explore the underlying truth but when you're on social media following your friends you tend to reinforce each other's biases and that actually is quite difficult for a democracy because if you can't agree on the underlying truth right and what else can you agree on okay your leaders spoke at our conference today in London mr. Flinn what is the underlying bias of the Chinese what is the HSBC view of what the underlying biases into these g20 meetings of President Xi and the communist leadership well the first thing is they can't really afford to lose face in other words that there are superpower themselves if the Americans tell them this is what we want from you and it makes a series of demands that the Chinese feel they can't deliver domestically then that creates automatic here clash Chinese to given negotiate a settlement rather than being told what the settlement is going to be the second thing is of course that if the u.s. walks away from some of its global leadership role I think China is hoping that it can establish a leadership role itself and you think about some of the international organizations of the Chinese have sponsored by the Asian infrastructure investment bank or the Shanghai Cooperation Organization or even the regional comprehensive economic partnership each of those is an organization run by the Chinese or established by the Chinese which in one sense is an extension or arrival to the Bretton Woods institutions that are created after World War two

21 thoughts on “Trade War Is Lose-Lose Situation Says HSBC's King

  • pull you pants up like a big boy bloomberg! previous Politicians were not cut out to deal with this! they were the problem! THANK GOD FOR TRUMP!

  • Trump doesn't know China. China is not Canada and Mexico. China will make you pay dearly. Like capt marvel said: China didn't start the trade war but it will finish it. Trump is an old entitled fool who will get his justice. He's conned everyone in America but not fooled other countries. He's a wild erratic simpleton who will make America suffer. He's already shit on the office of the President, shit on the FBI and CIA, shit on the stupid farmers, made a joke of the US government, destroyed any credibility of the EPA…….get rid of this fail businessman loser before he causes the lives of thousands of our men in the military. Iran is not Iraq… They have the support of Russia and can attack in many ways other than a frontal military assault.

  • "A communist is like a crocodile: when it opens its mouth you cannot tell whether it is trying to smile or preparing to eat you up.
    " -Winston Churchill

    HSBC? wasn't that the bank for terrorists and cartels until just a few years ago when the US cracked down on them? yup "Europe’s biggest bank paid a $1.9 billion fine and entered into the five-year deal in 2012 for failing to prevent Mexican drug cartels from laundering hundreds of millions of dollars."… who cares what hsbc thinks? they don't care about you or your country no matter where you live. they have a long history of corruption against governments. look it up. btw, governments are there to look after their people… banks have no allegiance to you that is not enforced by your government.

  • I think that Trump is shooting himself in the bone spurs…losing face is no issue for him. He has not got any.

  • America has been lying and faking technical triumphs ever since the fake Apollo landings even getting Russia to bankrupt themselves trying to catch-up! Now it’s China’s turn but it isn’t working as well because China has history with America’s duplicity hence the trade war against a Chinese telecoms company

  • More and more are coming out to say that trade war is a lose – lose engagement which no one had uttered it except China. Now Americans are realizing it.

  • Xi will hold a Brics, China-Russia-India trilateral meeting, African leaders plus unyet named countries leaders at G20 summit.. Meeting with Trump made at Trump's request will likely conclude with fiasco, since he already made threatening remarks for China full compliance with his demands.

  • US: China, kill yourself!
    China: I rather die with you…
    World: see who is going to blink first or we all go to hell together…

  • What democracy? There is no such thing as democracy….. Its Capitaliscracy…… Money and self interest governs the kinds of freedoms that you can enjoy….. You can shout till your hearts content….. Free speech…. But nothing is being done for society…. Capitalism + Confucinism + Meritocracy = strong, vibrant, industrious and efficient China. There is no one clear path for any single country in this world.

  • Translation: the US was hoping for a color revolution and a regime change resulting in a collapse. Thing however didn't turn out as planned, and now the US is in a desperate fight to contain a rising China.

  • I think the US should come to terms with the fact that they are no longer the only big boys on the block.

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