[2023 Global Outlook] US-China Conflict is the Biggest Geopolitical Risk... Hope for Thawing Mood 'Elusive'

After Bilateral Summit, Conflicts Deepen
Expanding Beyond Trade and Technology to Military Sphere
China Expresses Overt Discontent by Filing WTO Complaint Against US

[Asia Economy Beijing=Special Correspondent Kim Hyunjung] The intensifying hegemonic conflict and tensions between the United States and China represent the greatest geopolitical risk for global companies next year. The scope of conflict is expected to expand beyond trade and technology sectors to include military domains surrounding the Taiwan Strait, heightening tensions in bilateral relations. [Related Article] '2023 Economic Outlook - International'

According to Chinese local media on the 12th, China filed a dispute resolution lawsuit with the World Trade Organization (WTO) in response to the U.S. semiconductor export control measures. The Chinese Ministry of Commerce accused the U.S. of arbitrarily expanding the concept of security to abuse export controls, disrupting normal international trade, and threatening the stability of the global supply chain. With the U.S. unlikely to engage in consultations and semiconductor powerhouses Japan and the Netherlands deciding to join the U.S. in export controls against China, both countries appear to be escalating the conflict by forming shifting alliances with friendly nations.

China's backlash against the U.S. is becoming more explicit and aggressive. On the same day, during a video conference between the foreign ministers of China and South Korea, Wang Yi, member of the Chinese Communist Party Central Political Bureau and Foreign Minister, met with South Korean Foreign Minister Park Jin and emphasized that the U.S. 'CHIPS and Science Act' and 'Inflation Reduction Act' (IRA) harm the legitimate interests of various countries including China and South Korea. Wang also stated, "The U.S. is not a builder but a destroyer of global rules," and urged, "Countries must stand up to counter the mindset and hegemonic behavior that go against globalization and defend multilateralism." It is extremely rare for a bilateral diplomatic meeting to directly criticize a specific country.

[Image source=Yonhap News]

The deterioration of relations between the two countries is evident not only in diplomacy, politics, and economics but also in public sentiment. According to a recent poll by the Washington Pew Research Center, 82% of Americans surveyed held a negative view of China this year, up 6 percentage points from the previous year, marking a record high, while only 16% had a favorable view, the lowest recorded. Among respondents, 62% regarded China as a competitor, and 25% as an adversary.

Rejection of the Confucius Institutes, Chinese language promotion organizations sponsored by China's Ministry of Education, is also accelerating within the U.S. Due to anti-China sentiment and political attacks, the number of Confucius Institutes in the U.S. plummeted from 103 in 2017 to 18 as of April this year. Since July 2020, under former President Donald Trump's leadership, exchanges between the U.S., China, and Hong Kong have been suspended, severing joint research and educational exchanges between the two countries. Additionally, China's COVID-19 prevention measures have further disrupted civilian exchanges.

The Diplomat, an international politics specialized media outlet, pointed out that "As opportunities for exchanges decrease, research capabilities on China are at risk, and anti-China or anti-Asian sentiments are increasing," and emphasized that "both governments should establish platforms to strengthen civilian exchanges and human communication and cooperation." Scott Kennedy, an analyst at the U.S. Center for Strategic and International Studies, stressed to the outlet that "both governments and societies should expand direct and candid communication to responsibly pursue strategic competition."