US-China trade war causes extinction.

A trade war would do enormous damage. It could foster a resentful and aggressive China and lead to the situation foreseen by Mearsheimer (2001), where a declining America decides to halt China’s rise. Decisions for war or peace Andrew J. Nathan and Andrew Scobell’s China’s Search for Security (2012) is noteworthy for its systematic inclusion of economic factors in a security oriented analysis. The driver of China’s foreign policy is its search for security, the book claims. Where the offensive realist Mearsheimer sees regional hegemony and global power as means to acquire national security, the defensive realists Nathan and Scobell distinguish between security and hegemony: Beijing wants security but not global power. When Beijing says it wants peace it means stability so it can ‘concentrate on economic development’ (Nathan and Scobell, 2012: 28). A country’s foreign policy is driven by its factual interests, although the causal path from interest to policy may be distorted by misinformation, miscalculation, value commitments, institutional weaknesses or leadership shortcomings. Nathan and Scobell think China will remain a ‘status quo power in a system designed by the West’ but hold it possible that future Chinese leaders may challenge US pre-eminence if Washington does not keep up the economic foundation for US power (Nathan and Scobell, 2012: 13, 346, 357). What could unravel the global system would not be China’s rise but US decline. This is the main risk, as they see it. If ‘the West weakens itself to the point of creating a power vacuum’, then China will acquire bases around the world and replace the dollar with the renminbi in its foreign trade. The US would thus have to decide whether and when to resist, and this could lead to war. The recipe for peace is that the US maintains its strength and conducts a cautious foreign policy. China is likely to act rationally on the basis of its search for security (Nathan and Scobell, 2012: xi, 359). It follows from their reasoning that the risk of war will increase if China can no longer depend on the US for its economic development, while the US retains sufficient military power to believe it can win a war. Again it is seen that a politically motivated reduction in the Sino–US economic interdependence is a likely precursor to any crisis leading to war. If Nathan and Scobell’s reasoning is combined with Roach’s analysis of financial politics and Copeland’s ‘trade expectation’ argument it seems that the key to minimizing the risk of war is to rebalance the global economic system in a way allowing the major powers to remain codependent. A combination of mutual nuclear deterrence and economic interdependence is likely to preserve global peace as long as no major power expects to see a rapid decline in its relative power. Deterrence and inter-dependence are both, however, precarious. One depends on credibility, the other on the expectation that flows are kept open within a mutually beneficial financial and trading system.