The economic power of a country includes various factors, primarily market size. If a trade war breaks out between China and the US, their confidence derives mainly from respective market size. The bigger the market, the more attractive a country will be to its trade partners and the easier to take the strategic upper hand.
Statistics suggest different results comparing China and US market size. One conclusion is that China's consumer market overtook the US in 2017. Another foretells this will happen in 2018 or 2019.
China and the US now are largely equal in consumer market size. But China will surpass the US soon and is very likely to leave the latter far behind.
China has been the world's largest automobile market for nine years. One-fifth of US-made automobiles are sold to China. German automakers sell 30 percent of their vehicles to China. Volkswagen sells 40 percent of its vehicles to China.
China has remained the world's largest market for smart phones, garments, e-commerce, tourism and agricultural products. China accounts for over half of the world soybean trade. In the past decade, US global exports grew 4 percent, up 11 percent to China.
China has astonishing potential to expand its market. As more Chinese get richer and a variety of shopping channels go online and offline, the contribution of consumption to the Chinese economy has grown rapidly. With the improvement of healthcare and pension systems, China will release more of its potential in consumption.
China being the largest consumer market worldwide will profoundly change the global economic landscape and influence international politics. Launching a trade war against China involves high risks. A strategic confrontation with China is unwise if there is no serious conflict.
Given its technological edge, the US can find substitutes easily for its imports from China in case of a trade war, and China will thus lose opportunities of learning and introducing advanced US technologies. But the consequences shouldn't be exaggerated. So far the US hasn't wanted to sell its cutting-edge products to China. It's not easy for the US to find alternatives for Chinese products that feature stable supply, high quality and low price.
By claiming China will suffer more from the trade war, Washington is trying to vindicate its high-stakes bet. Despite its intent to work with allies against China, the US is unable to do so. US allies won't resist the temptation of a huge Chinese market to do as Washington says.
Washington is simply blustering. After all, it lacks the domestic unity and resilience to wrestle with China.
People habitually imagine how tremendous US power can be, but the country is clearly aware that it doesn't have the capability to fight a fierce battle. Such a battle needs social solidarity and public support, neither of which the US government has.
According to the latest reports, the two countries are talking over the issue. US Treasury Secretary Steven Mnuchin said he was "cautiously hopeful" about reaching an agreement. But if by an agreement he means only Chinese concessions, he'd better not be hopeful and instead just prepare for a trade war.