Prediction on US/China Trade war to be verified in 2021
Main points of contention
Marxist ideological foundation versus a Judeo-Christian philosophical foundation
“In god we trust” versus a centrally controlled and designed market model
China’s inability to open up markets internationally due to challenges in finding a sustainable way to separate market from government
viewing the Party as above the market leading to difference in way IP ownership is viewed
The Chinese dream versus the American dream
China’s dumping strategy which lead to the severe imbalance of trade and thus steady US job losses over the past years
China’s strategy of acquiring US technology via forceful knowledge transfer due to its point of view on markets which resulted in the blacklisting of Huawei
China’s intention to establish leadership over two thirds of the world’s population thus challenging US dominance leading to the election of a hawkish US president
Assessment of situation
The issue is deeply structural and resolution will be unlikely during Trump’s current term of service
Companies within impacted industries will continue experiencing negative headwinds well beyond 2019
US companies will gradually shift production to the US and other parts of the world as President Reagan’s hypothesis on China’s successful transition to a market economy gets invalidated
World splits into two distinct economic blocs
Chinese economy will face continued pressure given the following concerns
aging population
lack of room for further domestic growth
none granting of WTO market status
US untangles its free market economy from the Chinese centrally controlled market economy as the latter slips into recession
