Image of Photo of Dr Stephen Roach and cover shot of his book, Accidental Conflict

Accidental conflict: America, China, and the clash of false narratives

The China Centre lecture on Tuesday 7 June 2022 was delivered by Dr Stephen Roach, Senior Fellow, Yale Jackson Institute for Global Affairs, and former Chairman of Morgan Stanley Asia.

Dr Stephen Roach's seminar addressed the possibilities for conflict, including military conflict, between the USA and China. He distinguished three phases in the US-China relationship in recent decades. Phase I covered the period 1972-1989. Dr Roach characterised this period as a 'marriage of convenience', in which both economies encountered serious difficulties. Phase II covered the period 1990-2008. During this period there was a relentlessly deepening co-dependency between the American and Chinese economies, 'turbo-charged' by China's entry to the WTO, with great mutual benefit. Phase III began with the global financial crisis of 2008/9, lasting to the present-day. This phase has been characterised by increasing conflict, including the emergence of Cold War rhetoric. In Dr Roach's view the conflict is based on false narratives on both sides: the USA blames China for its own domestic failings, including the 'savings shortfall', the 'innovation shortfall' and 'hegemonic over-stretch', while China's difficulties arise mainly from the failure of the economy to 're-balance' away from investment towards consumption. Dr Roach argued that the rise of social media, has helped to foster 'false narratives' in both the USA and China. He concluded that the USA and China need to find a way to shift their relationship from an 'unhealthy' to a 'healthy' inter-dependence. This requires rebuilding trust though policies that remove the impediments to sustainable growth in both economies.

The Q&A session included the following topics: the USA's capability to adjust peacefully to the end of the era of US hegemony; the role of the state and private sectors in China's development; the reasons for the wide extent of hostility towards China across the whole spectrum of US politics; the contrast between the Cold War with the Soviet Union and the Cold War with China; the relative competence of high-level government officials in the USA and China; the extent and location of American overseas military bases compared with those of China; and the dangers of a new arms race.

Dr Stephen Roach has been a senior fellow at Yale University since 2010 where he developed new courses on Asia — notably 'The Next China' and 'The Lessons of Japan'.

Prior to moving to academia, Stephen Roach spent thirty years at Morgan Stanley where for the bulk of his career he served as the firm's chief economist, heading up a highly regarded team of economists around the world. From 2007 to 2010 he was the Hong Kong-based Chairman of Morgan Stanley Asia with broad oversight for client relationships in the region.

His recent research has focused on the conflict-prone US-China relationship, which was featured in his 2014 book, Unbalanced: The Codependency of America and China and in his 2022 book, Accidental Conflict: America, China, and the Clash of False Narratives.

Prior to joining Morgan Stanley in 1982, he worked in senior capacities at Morgan Guaranty Trust Company and the Federal Reserve Board in Washington D.C.

Stephen Roach holds a PhD in economics from New York University and was a research fellow at the Brookings Institution. He lives in New Canaan, Connecticut.