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the pacific explorer until fascinating story one on one on al-jazeera. for you to. see. china china china china. china they want to make a deal. the question is do i want to make a deal we've heard u.s. president donald trump talk about china many times. in fact it was he who started the so-called trade war with china you know the 2018 with tariffs piling up on both countries imports that isn't a real war and how much of it is impacting china's massive economy and it's 1400000000 people. i'm kamal santamaria here in the library of the national museum of carter willis trade war between the world's 2 biggest economies have repercussions far beyond their own shores we're seeking answers today as the president and founder of the center for china and globalization dr wang talks to

al-jazeera. dr wang thank you for joining us thank you for talking to al-jazeera i think for 18 months now we have heard the story of the so-called trade war between the united states and china but we hear it mostly through the prism of the united states possibly because donald trump shuts the loudest about it but we certainly haven't heard much of the chinese reaction other than when they put their own tariffs on i'm interested to start by just if you can tell me how has the story for the 18 months played out in china is it is it a big deal there or it certainly is a big do i mean the china and the u.s. relation this exactly 40 years of a diplomatic ties china opened and the 1978 and then january 1st ninety's and denied china u.s. diplomatic tight so china is open now but largely opened up to the u.s.

and actually for the last 4 decades as there's a bomb so there was up and downs but not as big as surprised as i expect this one and i remember the president trying to come to china 2017 bamber he had to talk 150000000000 deal was signed so you see such a high turn 25. even 30 percent of tariff on such a big amount $250000000000.00 we have a high $500000000000.00 or whatever it's president so so they certainly made the chinese a confused. and also a really troubled president trying to say oh we're winning here we're winning the trade war when in fact a lot of people in america saying no we're not winning actually this is affecting us as us business people is it if we mirror that in china is it having a you know a i don't think there's a there's a lot of economic impact there is there could be some psychological impact people just proper perhaps. it was holding from further heavy investing or maybe rolling

back a bit of the employment on that but basically i think both china and the u.s. looking to us the ability and a deal that can be truly beneficial so so i think but they don't see described in china as present trouble that oh everything's a collapse everything a stock market crash no i mean i mean except that the park price has come up due to the swine flu i mean you don't see any major changes no we don't i mean there could be only the slowing down but but china keeps maintain the 6.6 percent g.d.p. growth every year adding another australia to it with g.d.p. so so it's one china richard that kind of magnitude and they still keep 6 percent of the original base of year after year that that's incredible i mean so so. naturally you can see china slowing down from 65 to 6.2 is crashing it's still the

best one of the best in the world so i think i have to you know interpret how to interpret that could china have reacted more aggressively itself you know with the there was the $200000000000.00 or tariffs on $200000000000.00 worth of goods at a rate of i think it was 10 percent and china replied with 60000000000 and then again another 200. and went on a 25 percent of china again in a reaction but the 60000000000. they playing along there all because the proportion lee you know china's important proportion corresponding to us proportion of the import that's where they exercise the tariff of each other but you know china cannot match in absolute numbers with us because you know china was not really that in line with us in terms of exact the same amount of import of each other you know the thing is that the chinese market already a home market for us you know the reason the u.s. industry air space aircraft industry and you know high tech industry everybody in

china consumer market everything is because china is buying a lot of u.s. good products and particularly you love the u.s. company is invested in china selling in china so that's not counted as u.s. exports right so but then they got all the benefit back you know like oh well president trump announced the tax reduction and. said they're going to in a few years ago to repatch it backs $350000000000.00 so that's incredible that's all the money they made overseas so including china so so you can see but that money probably is not counted as a deficit the trade deficit for the u.s. because china may perform china made the $50.00 or $100.00 but it sells 1000 for a $1000.00 a year but then china may have a balance that they've made take a $600.00 or $800.00 as if china made all the money off of that so it's not accurately reflect the situation another facet of the trade war was august of this year when the united states declared china to be

a currency manipulator and i think that's an easy phrase to throw around and certainly in the white house has done that maybe you can just explain to us. in simple terms what a currency manipulator is and also does 'd does china fit into that mold is a really you know you have to there is there is a there's quite a few quite theory and that is where they define terrorism a little later and china is not matching any of those you know china actually didn't really. floating around the $6.00 per u.s. dollar. but that's not you know china did not drastically devalued or do anything to do that so i think it's it's an accurate assessment of that i think to label china as a currency manipulator is not correct so then how i want to how does the u.s. get away with that but how are they just interpreting the data differently that's great i think that's over now us is losing the credibility on that is because

even though they said on their own when you match what china is doing it's not just china those are today's china the little inflation on that flatter the larger according to the markets which are in that u.s. or maybe china is going to they saw that as a as an indicator but then you see now they don't see that anymore so so you see it's. the basically that is decided by the market but chinese government has of course going to let not only allowed you to devalue. you know as as well the u.s. is the thinking no no not really so the picture i'm getting from years we explained all of this so well to us is that this is a it's it's an economic versus a political story interests of 2 countries. it should be about the economics but actually is it actually more about the politics certainly coming from the american side it's about. political self-interest and where they want to position themselves

against china. i think there's a bit of that and i think you know us was initially when they gauge china they were thinking ok that as we go along we are 2 system we're converging we will become the same you know the china we as the middle class growing there will be more more. universal suffrage and then they were they will have a similar system as us but that's a that's a bit of the expectation i think that you know in. a culture in east asia you know if you choose a society you have a single poor as one party you have a japan i mean even japan is a one party or the time almost so china you know you have to really look at that differently with 5000 years of history but if one you know if the if the government can really why in 5 years plan of the now every 5 years plan keep the economic growth i think the economic growth and prosperity for its citizens is the biggest digital message for the government probably to exercise the governance and you see

for the last 4 decades china has lifted 800000000 people out of property china has now become the 2nd largest economy in the war china is the largest trading nation for 130 countries china in the last 1015 years you know build up the high speed rail way past faster networking toward the total ends of that is equal to the next 10 countries combined so you think this is all getting overlooked because it's become about trade and the trade and i actually say so-called trade war because i think you know a war is a strange way to describe really what's going on but do you think that actually overshadowed the rest of the chinese story absolutely i think it is true it was you know they didn't look at the chief been the chinese government and the chinese people have working so hard to have you know that china. it is a country built of 30 percent every year of that world g.d.p. gross i mean if we have not become one of the strong locomotive of the world

economy so if china collapse if china really gets bad and not going to keep its 6 percent above g.d.p. growth china could export famine china could export refugees china could become a very chaotic and that would that be a ideal situation for other countries i don't think so so so it's really important to see that china if we can if we really can do well if they can lift 800000000 people out of property and cut 70 percent of world propre property by by by percentage that's you know let it be and i remember well the job in the late leader of china it doesn't matter is a black cat or a white cat as long as catches mice so in this system works if this isn't walks in china based on it's a culture. you know. tradition and its heritage so why not let it be you know i think more out of the article. misunderstanding and is not enough communication and there's

a lot of fear out of this then it's comes down to the trade war and even for trade the war is worth a lot of means the interpretation because china wasn't really the benefit for example you are saying they got there all the trade deficit but on the other service treat us as a big star plus there's $1000000000.00 chinese students study in the u.s. contributed $20000000000.00 a year the streaming in chinese tourists to around the u.s. in a country another sort of building a year and all those that are counted in our channels are paying a lot of pain tens and paying a lot of i.p.r. fees and things like that you know everything you've described of china is really capitalism personified and yet it remains a communist nation is that problem for china how does it operate 2 systems effectively. i think there is a there's a quite a bit of misunderstanding of the chinese system chinese actually is a mixed economy will be impacted on this market reform china is basically the market economy the government is in those central planning is really getting you

know i mean totally out of money opens all the sectors and then you look at china composition it has a you know private sector which employs 90 percent of the workforce contribute about the 60 to 70 percent of china's g.d.p. gross and then there is another maybe $1015.00 or 20 percent of so he you know contributor chinese the g.d.p. and then there's not a 10 percent the multinational so it's really good the combination of private sector some is so easy multinationals so it's a it's a hybrid car but you can say that it's a black economy but with the chinese characteristics so i think in that kind of system it's stabilized the employer provides all employment to the citizens but also if there's a disaster you know social is about stability so you can also take take that you know not a profitable level so i think and also the chinese there was a buy it on road initiative that that all comes together i just wonder how long

that can be maintained and i know that sounds odd given as you say there's a 5000 year history of mira's free yes but i wonder as we move more and more and as this. catalyst nature takes over more and more one should get to a stage one day when the people actually want but a democratic country that you know that they don't want to be that mixed economy they actually want to be a fully democratic society i think you know. i mean the professor at. the end of the history even he himself think there was a conclusion short too early but you see actually given for the western style democracy it's not the same and it's not really achieved what has been going on you can see a we. we've seen the populism we see the bre-x. it for several years still hasn't been done we've seen. the yellow vast we've seen you know those recently arrested in the span chile and in the middle east of course

as well so isn't this kind of a you know if it's really totally rely on the so-called democratic movement it's not really you know it's creating a lot of problems so it's not a panacea for the problem so so i think that we have to bear in mind the technology the internet the mobile phones and everything it's creating a virtual. material democracy for example in china 111000000000 smart for users every day they're there taking their votes what to buy work to shower where to go over to where to watch what which rest on the day they are using their cell or phone to cast their votes every day that's a market economy and also on the other hand china is watched by 200 some countries the united nations sowed in the media and they've been they've been they've been criticizing china on they've been pinpoint china every day so china leadership and

also you know general people lead in china they know what's going on they've been they've been feedback about all this criticism and servers of course so that they can reflect they can really respond and also china is really on the think tanks and acts per system visibility studies in china in greece the world bank in a competitive bidding system so everything china is is is more internationalized i don't see how you know under this kind of system is any different as long as people are really happy and then as long as they are really getting a beacon on benefit maybe there's a little bit of. so shoe individual right maybe not perfectly practiced but china is a collective. anyway but his hunger i mean i mentioned hong kong just in passing is that show a little bit of a wake up call for china as well just a reminder of what people do sometimes want and i know it's

a different system in hong kong you know this is what the hope issues on a similar item of the hong kong is actually because the 102 system china let a free hand of hong kong and let hong kong people decide their own governance and future but that's probably connected to hong kong young people. you know desire and that's so that people felt as though raised their prices so high they cannot afford housing they can there's no job of it and also you know what hong kong is also not really catching up on the new sectors and the new new new development impetus actually used to when they take over in 1997 hong kong comes about 30 or 40 percent of china's g.d.p. now you know since you have taken over hong kong. so you see so there is a bit of a gap and those young people in hong kong make same as mainland but they but the the same that when they may they cannot afford even stout in hong kong so i think that's where the problem i think the future for that is really to integrate hong

kong with a great. hong kong and then so that young people coming across the border work and married and start to go to university and so they can social security and hospital you know everything that that they can really solve that problem let's look at china then in the context of the rest of the world what did you say before the growth rate was at the moment what the knowledge they maintained their latest these 6.21 was so. incredibly strong yeah i mean it's gone down from the very 10 days of 16 percent but it's still by world standards very strong the international monetary fund's global outlook for 29 t. they think it's global growth is going to slow to about 3. and yes and that actually this trade war between china and the u.s. could be a large factor in that you have a little bit of agree and i totally agree i was i was always christine lagarde last year at the munich a secure conference and and also the new chief of former c.e.o.

of war bang the same panel and you know they made a prediction is absolutely right because you see the thing about the china u.s. trade ways that it dampens confidence it's actually make people reluctant to invest and those people you know the value chains are hated on that because china is at the center of the global value chain you know a lot of things goes through china and then china is the number one per producer of 200 some products in the world so if china is really hit by these trade war the old other suppliers from from other regions from other countries were only fact affected and also so you return that you have a factor u.s. as well so i don't see how you know how the world economy will maintain such a strong growth. and then become effective how dangerous is 3 percent given that we are only 10 years now since the start of the global financial crisis

if we're getting down to 3 percent again how risky is that for a quote unquote global recession no that's why i mean this this partial deal with the present trump and china strike last month is absolutely crucial because if we do not do that i mean the 2 biggest economic power in the word and then if they if they really fight i mean all the others were suffer absolutely and then we drag the world into recession and that's quite possible too and we may not have another financial crisis because this is really alarming situation i think that we should realize that we we need to do that but also even worse is that there are some people even in the us thinking about the decoupling also we have a 2 track world and things like that so we have an economic. we have a you. nato now a. military war now you may want to get in the economic war and that's going to be very dangerous how would china weather any economic global economic downturn

because there was a move 5 probably more than 5 years ago for china to turn away from. exports and actually try and make its domestic economy increase domestic consumption so that it could be insulated as that actually works because that's a big ship to turn around isn't it when you've got a completely or a very strongly ex war based economy and then you say right we want to start changing it we want to make it more domestically driven that's a huge task well that's probably happening because you know in the past china was export led it was really export driven economy now china is really cutting down on that and for example service in china and by the 35 years plan by 2020 it will take almost 60 percent of the chinese g.d.p. so the chinese don't mess to consumption is greatly stimulated and also there's more room for china to invest in its infrastructure for example and a brand new airport would just open in beijing just so you see that china can use

the stimulus package china really stimulate the mass to consumption which is 1400000000 people itself it's a self-sustaining you've got an audience if it's going to a captive audience that's not what i mean but you've got that ready made. population there yes china could effectively operate on its own that's right john has 1400000000 people we're unified market one currency one system 1000000000 smartphone users china is the is getting leaps and bond into the into the into the new economy you know and then actually the china already have a 400 minute middle class buyers now and the we have seen the new reports saying that china has more 1000000000 there now than the united states more 1000000000 as well absolutely so you see that actually happen now and then by the next 1015 years china could have 800000000 middle class so itself china can you know survive it's

pretty well i mean china has you know if they're talking about category of production category or kind of product china is the china has the most products. by the united nations so china can be a self-sustaining well well balanced economy weather all the storms of the financial crisis china actually did very well in the last financial crisis to it so so i think that if china was it was really forced to do that china can but what china wants to do is china wants the contribution china wants to say let's do international in a multilateral says let's reform wu let's that's. a road you know let's work with a world bank be an everybody you know for example is a good example of that so so i think it's really important that china and us work together the 2 largest economy if they fight i mean definite the world's going to suffer yeah we are. a year away give or take from a u.s. election from perhaps the most definitive u.s. election we have seen in years i mean. does this have the potential to play out for

the next 12 months under president trump and then it could all it could all change again couldn't it i think that what president tom has been doing in the last. 2 and a half 3 years is that initially this of this intelligent military report the position of china as a strategic rivalry now has spread across the board all everybody that china is a struggle rivalry you know we could be a corporative rival could be a healthy competition but not strategic revery so if you really pretty place china is the enemy of the u.s. and that's really dangerous but i think what's more important is that president tom still have a year left in the white house and that what he has to deliver right i mean the message code kind of the u.s. agreement still hasn't been ratified and then the white house you know we need to he needs the. voters and what he has done for the last several years so china is

a big deal of a big part of that i think he doesn't have the time is running out i mean let's get everything we have achieved we can't do a perfect you but let's get you know. for the evil 90 percent or 80 percent as great let's do that so also i think it's really important that we need to stop this downward spiral you know we need to really stabilize that and that we need some progress and we need to lift the confidence and we need to get it gets got to reinforce the got a better deal and a face to face 3 and that's that's really work for the for the best of the benefits of the mankind and that's what china wants i mean that's essential you want well absolutely china china is of course china's never rock the boat image china did a study as trade war china was really. a defensive position but as the chinese gun is a china they were afraid of the trade but china doesn't want to initiate great trade war they really want to peace and prosperity talk to one president and founder of the center for china globalization thank you for talking to al-jazeera thank you.

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