Joe Biden or Donald Trump – whoever is the President of the United States come November, their ultimate challenge is to secure “stable relations” with China which would win an all-out trade war, warns the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The warning from Nigel Green, chief executive and founder of deVere Group, comes as Mr Biden prepares to give his official acceptance speech on Thursday night to the Democratic National Convention to become the party’s nominee to run against Mr Trump on November 3.
Mr Green says: “Managing China and maintaining America’s fragile economic superiority over its major trade and commerce rival will be the defining foreign policy issue of this presidential election.
“Both the Democratic and the Republican candidates seemingly share a belief that ‘being tough’ on China — or whoever can knock China the most effectively– is going to do well with the electorate.
“Both Biden and Trump will up the China-bashing between now and November 3.”
He continues: “Whilst this strategy might be a political weapon to win the White House, whoever does become the next CEO of the world’s largest economy will have a golden opportunity to secure stable, normalised relations with China.
“And this should be high-up on their agenda.
“Cooperation will benefit both nations by helping to boost global economic growth, encourage investment, secure jobs, keep prices down for consumers, reduce unfair or illegal economic, commercial and technological practices, reduce poverty and environmental problems, and contribute to stopping human-rights abuses and military interventions.”
But there is another major reason, says the deVere CEO, why moving towards amicable relations with China cannot go unmet by the incumbent or the challenger.
“A de-escalation in U.S.-China tensions must be a top priority for whoever is in the Oval Office because it can be very reasonably assumed that China will win an all-out trade war.
“Why? Because America’s trade deficit with China is frequently over-estimated and barely gives it the upper hand.
“Also, China’s central bank — unlike the U.S. Federal Reserve — is not independent and can be made to cut interest rates to bolster domestic demand and devalue the currency to make Chinese exports even more competitive.
“In addition, China is better positioned than America – which has a record budget deficit – to help out industries hit hard by a trade war.
“Plus, the ruling Communist Party of China can take the political impact of a trade war better than whichever party wins in the U.S.
“The leaders of China don’t need to play popularity games.” Mr Green concludes: “Whoever wins the U.S. presidential election must seize the momentum that a win gives a political leader and immediately seek amiable relations with the world’s second-largest economy.”