China Center Quick Note: Hope for the best, plan for the worst -- A look at the potential negative consequences of US-China friction

The election of Donald Trump as the 45th president of the United States has injected new uncertainties into the US-China relationship, and while there are emerging signs that the new administration is backing away from some of its more extreme China rhetoric, the possibility of a deterioration of relations between the two countries cannot be ruled out.

Should a protracted geo-economic struggle emerge, both China and the US possess a robust set of formal and informal tools at their disposal with which to inflict both general and targeted economic pain on the opposing country. Given the enormous amount of arbitrary control the Communist Party of China (CCP) wields over the economy – as well as over the legal and regulatory system – MNC business planners need to be aware of the retaliatory levers that could be pushed in the event of conflict or as a means of influencing policy.