What We Get Wrong About the Relationship Between the U.S. and China

Despite all the coverage and analysis of the high-stakes trade war playing out between the U.S. and China, it’s not easy to fully understand the relationship between the two countries.

Speaking at Fortune Most Powerful Women International in London on Monday, Wei Sun Christianson, Morgan Stanley’s co-CEO, Asia Pacific, and CEO, China, identified two commonly held beliefs about the U.S. and China that she says are misguided.

First, she objected to the very use of the term “trade war” to describe the current dynamic between the rival nations. Instead, she prefers “trade tension,” saying that the U.S. and China are in the process of “trying to reach agreeable terms and to co-exist with each other.”

She went on to point to a second misconception—this one specific to the global jockeying for technology dominance: “The fear that China could become a tech giant and displace the U.S. is unfounded,” she said.

In reality, she said, the Chinese internet is bifurcated: “There’s the consumer internet and the industrial internet.” On the consumer side, the U.S. fear is, perhaps, well-founded. According to Christianson, a whopping 98% of consumers are using the internet on a mobile device. China is also ahead on consumer-facing “super apps,” like WeChat, which combine multiple services in a single application.

But when it comes to the industrial internet, the U.S. is still in the power position, said Christianson. In China, she said, the investment in enterprise IT service is 18% of that of the U.S. So, while there are areas where China is likely to become to the dominant tech player, there are also places where the country is still “playing catchup,” said Christianson: “And that reality needs to be told.”

Editor’s note: This story has been corrected to clarify Christianson’s comment about investment in enterprise IT service in China.