Economist Stephen Roach warns the US and China are in a ‘conflicted co-dependency’
A leading economist warned on Thursday that the United States and China are in a “conflicted co-dependency” that this year’s two bilateral summits failed to address. “I think there’s a good chance that we’re in a temporarily more stable place. But to say that has solved the deep-rooted problems between us, I think is a real stretch,” said Stephen Roach, a veteran China-watcher and the former…
Economist Stephen Roach cautioned on Thursday that the US and China find themselves in a "conflicted co-dependency" relationship, one that the two bilateral summits this year have yet to fully resolve. Roach, a renowned China expert and former head of Morgan Stanley Asia, made these remarks at the China Institute of America. Despite recent summits, he does not believe they have adequately addressed the underlying issues of their "conflicted co-dependency."
Roach pointed to tensions over China's rising influence, followed by tariffs, sanctions, and the trade war as evidence of the deep-rooted problems between the two nations.
At the event titled "China’s Economy, America’s Risks – What Lies Ahead?", Roach examined the factors reshaping the global economic landscape, ranging from tariffs to artificial intelligence. The economist’s analogy of co-dependency highlights that while both countries influence each other, changing perceptions can exacerbate tensions. He likened this dynamic to a partner's feedback, where a shift in perception can lead to disagreement, friction, and conflict.
Roach’s perspective was shaped by the tensions that emerged during China's growing strength, the imposition of tariffs, sanctions, and the trade war, which became apparent during the analysts’ assessment. When asked about the prospects of "strategic, constructive stability" between the two countries, Roach acknowledged that the term "stability" may be optimistic.
He suggested that the aspirations of Chinese President Xi Jinping and former US President Donald Trump for a stable relationship in the coming years are not yet in sync.
The September state visit of Chinese President Xi to Washington yielded modest results. Both leaders entered the summit grappling with domestic economic issues. The US faced soaring gas prices due to the ongoing conflict in Iran, while China battled high youth unemployment, a sluggish housing market, and an export-driven growth model that perpetuated global trade tensions.
The visit led to an extension of the tariff ceasefire and discussions of targeted tariff reductions. The Busan trade truce was extended until January 10, 2027, following an unscheduled meeting between Chinese Vice-Premier He Lifeng and US Treasury Secretary Scott L. Bessent before Xi's arrival in the US.
The White House announced lists of non-sensitive goods valued at $30 billion, recommended for tariff reductions on both sides – a total of $60 billion – coordinated through the US-China Board of Trade, a bilateral body established during Trump's visit to Beijing in May. The leaders are scheduled to meet twice more this year, at the APEC summit in Shenzhen in November and the G20 conference in Miami in December, marking an unprecedented number of meetings in a single year.
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