Why Xi believes the U.S. and China can overcome the 'Thucydides Trap'
In May, Chinese President Xi Jinping asked U.S. President Donald Trump whether the countries could avoid destructive rivalry. Now, it seems, he thinks they can
The concept of the 'Thucydides Trap' refers to a situation where a rising power threatens to displace an established power, often leading to conflict. In the context of U.S.-China relations, this trap is particularly relevant given the current trade tensions and competition for global influence. By suggesting that the U.S. and China can overcome this trap, President Xi is implying that both nations can find a way to manage their rivalry without resorting to destructive measures.
This development is significant because it comes at a time when trade negotiations between the U.S. and China have stalled. The two nations have been engaged in a tit-for-tat tariff battle, with each side imposing duties on the other's goods. A resolution to the trade tensions could have a positive impact on global markets, which have been volatile in recent months. Moreover, if the U.S. and China can find a way to manage their rivalry, it could set a precedent for other rising powers and established powers to follow.
Going forward, it's worth watching whether President Xi's optimism translates into concrete actions. Specifically, investors will be looking for signs that the U.S. and China can reach a trade agreement that addresses the concerns of both nations. Additionally, the upcoming G20 summit in Osaka may provide an opportunity for President Xi and President Trump to discuss their differences and explore areas of common ground. If the two leaders can find a way to work together, it could mark a significant shift in the trajectory of U.S.-China relations.
Originally reported by cnbc.com. Trade-News adds analysis for finance & markets readers.