Thread by @ChinaFinance40

The Next Phase of Trump’s #Trade War with #China by Yu Yongding @ProSyn project-syndicate.org/commentary/nex…

#China remains committed to its 40-year-old process of reform and opening up. But this will require China's leaders to find ways to manage escalating tensions with the US and avoid a costly – and potentially devastating – reconfiguration of the global #economy.

Trump recently announcedthat he would allow US companies to continue to sell to the #Chinese tech giant #Huawei, but it remains highly unlikely that his administration will abandon its efforts to strangle China’s high-tech industries. China has three options:

1.accede to US pressure to disengage from global value chains; 2.remain committed to integration hoping sanctions on Chinese high-tech companies will also hurt their US counterparts (such as #Qualcomm) enough that the Trump administration backs down;

3.focus on supporting domestic high-tech companies’ efforts to strengthen their own positions within global value chains and develop contingency plans. Meanwhile,China must also prepare for the possibility that the #tradewar will escalate into a #currency war.