Roubini: There are no more guardrails – Expect a derailment, a crash and an American confrontation

Roubini: There are no more guardrails – Expect a derailment, a crash and an American confrontation

Economist Nouriel Roubini once again warns…

If the United States and China do not slow down… nothing will be able to prevent a war between the two superpowers, warns with his analysis, after his recent visit to Beijing, the eminent economist, former professor of economics at the New York University and Stern Professor Emeritus of the School of Business, CEO of the consulting firm “Roubini Global Economics”, Nouriel Roubini, who “sees” no break in the current journey towards conflicts…
In particular, “I recently attended the China Development Forum (CDF) in Beijing, an annual gathering of top foreign business leaders, academics, former policy makers and senior Chinese officials.
This year’s conference was the first to be held up close since 2019 and offered Western observers a chance to engage with Chinese leaders, including new Premier Li Qiang.
The event also gave Li the opportunity to engage with foreign officials for the first time since taking office.
Although much has been said about Chinese President Xi Jinping being careful to appoint close supporters to critical positions in the Chinese Communist Party and government, our conversations with Li and other senior Chinese officials showed that they take a nuanced and refined view of their policies and leadership style.
Before becoming prime minister in March, Li served as CCP secretary in Shanghai.
As an economic reformer and proponent of private entrepreneurship, he helped persuade Tesla to build a large factory in the city.
During the COVID-19 pandemic, he enforced Xi’s Zero COVID-19 policy and oversaw a two-month lockdown in Shanghai.
Luckily for Li, he was rewarded for his loyalty and not made the scapegoat for failed politics.
His close relationship with Xi also allowed him to convince the Chinese president to roll back zero restrictions on COVID-19 overnight when the policy proved unsustainable.
During our meeting, Li reiterated China’s commitment to “reform and opening up”, a message echoed by other Chinese leaders.
Li’s spirit contrasts sharply with the behavior of former Premier Li Keqiang, whom we met in previous years when he was Premier.
During our meeting, he had Apple CEO Tim Cook laughing out loud, attributing his jovial mood to the viral video of Cook being applauded by the crowd during his visit to an Apple store in Beijing.
He even joked about a video showing US lawmakers grilling TikTok CEO Shou Zi Chew, which also went viral that week.
Unlike Cook, he noted, the TikTok boss wasn’t smiling during his congressional hearing.
Li’s joke was an implicit warning that although American companies are always welcome in China, the Chinese government could play rough if its companies and interests are not respected by the United States.
Li’s veiled threat reflects China’s current attitude toward the United States.
Although economic decision makers often speak of openness, the policies of the Land of the Dragon still prioritize security and control over reform.
Qin Gang, China’s new foreign minister, took an aggressive stance during his speeches at the CDF.
With an odd reference to the United States, Qin warned Western participants that if China wishes to maintain an open global trade regime, it would respond forcefully to any attempt to drag it into a new Cold War.
In a recent speech, US Treasury Secretary Janet Yellen sought to allay China’s concerns that the United States is trying to “contain” its rise and disengage from its economy.
Recent US actions restricting trade with China, he said, were based more on national security concerns than an attempt to hinder the country’s economic growth.


But appeasing China will be a difficult task as the United States plans to impose restrictions on Chinese investment in the United States and on American investment in China.
To date, Chinese officials have not been receptive to efforts by Yellen and Secretary of State Antony Blinken to cultivate the ground for a dialogue on how to maximize the benefits of a potential partnership, minimize the areas of confrontation and how the two sides will be able to manage the growing strategic competition and rivalry between them.
European Commission President Ursula von der Leyen recently delivered a pragmatic speech in which she argued that Europe should “focus on reducing risk rather than decoupling” from China.
But he pointed to the many ways in which Chinese policies pose a threat to Europe and the West.
Her speech was not well received in Beijing and she was indeed treated coldly during her visit to China with French President Emmanuel Macron in April.
On the other hand, Macron, more welcoming, was warmly welcomed…
China is currently trying to drive a wedge between the European Union and the United States.
Since EU-based companies have significant interests in China, many European CEOs participated in the CDF, unlike the limited presence of US business leaders.
And Macron’s controversial comments during his visit in April, particularly his statement that Europe should not become a “vassal” of the United States, suggest the effort may have succeeded.
But a subsequent G7 statement reaffirmed the West’s stance on Taiwan and condemned China’s aggressive policies toward the island.
Moreover, China’s tacit support for Russia’s brutal invasion of Ukraine will likely prevent Europe from succumbing to a charm offensive.
The approaching US presidential election, along with China’s suspicion that the United States is trying to curb its economic growth, will hamper efforts to build trust and defuse tensions between them.
As Democrats and Republicans battle over who will show a tougher face on China…the Sino-American Cold War is likely to escalate, raising the risk of a potential hot war over Taiwan.
Despite efforts by U.S. officials to create safeguards for strategic competition with China and insistence by Chinese officials that they are not interested in economic decoupling, the prospects for cooperation seem to be growing. distant.
THE fragmentation and the Sign out are becoming the new normal, with both countries remaining on a collision course, as a dangerous deepening of the ongoing geopolitical recession is all but inevitable,” concludes Roubini.

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