As the world is leaping towards Knowledge based economy which values and invest in human capital for economic development, the news from World Bank that US-China rifts is hurting knowledge generation and innovation is quite concerning.
Globalization and open economy were the two critical factors which led to the human advancements in past decades but because of trade war initiated by former US President Donald Trump to capitalize political agendas has caused long term damaged to the relations of the world’s top two largest economies.
The current regime in America is also siding with the most of the policies of the predecessor to contain China growth by continuing with trade tariffs and decoupling semiconductor supply chain to throttle China tech sector. The recent TikTok CEO testimony before Congress highlights the prejudices of the some of the policy makers who insisted app ban despite not having any intrinsic proof that TikTok is spying on US soil.
This current slump of innovation and knowledge generation is going to hurt the world, particularly the Asian countries. On surface diversification of China manufacturing capabilities led to the boom of exports in other markets but the further distrusts between US-China could lead to less investment as result of high supply costs because of trade routes restrictions.
The World Bank suggestion is spot on for the developing nations to reform their policies to be a part of both blocs instead of siding exclusively with either one of them to avoid missing goods of the both sides.
The European Commission President recent comments on China is sign of protectionism to stop China web3 advancements by developing so called defensive tools. In reality the EU is internally chalking out policies to, how US based tech companies can contribute to their €100 billion 5G rollout to which companies like Meta, Netflix and others haven’t responded in kind to accept the suggestions from the authorities.
Europe needs to understand, China is their biggest trading partner and world largest market which is essential for the EU domestic industrial complex and high-end luxury goods sectors. The authorities have to make sure they are not sidelined because of either or situation but rather they should play important role to cool down current rifts between China and USA.
The world is already facing too many challenges and we can only overcome them if the two big powerhouses work together to solve impending crises like Climate Change, Food Security and Economic Inequality.
Innovation and scientific progress are key to solve the above mentioned crisis which requires investments and knowledge sharing but the majority of the world still has not made scientific advancements to solve their problems. The vaccine crisis during covid crisis is one good example of how only select few countries were able to make their vaccines and the rest were heavily dependent to vaccinate their citizens.
China is vital for World’s Green Energy transition which needs immediate attention to fight Climate change and achieving sustainable development. If the current policy of western nations to sideline China is continued the emerging economies will not be to develop their renewable and green energy sectors because of high product costs and supply chain challenges. 
China by far is most promising economic model for other developing countries to implement as its challenges are more mirroring to emerging markets than western countries and that is the reasons countries like Argentina, Mexico and others want to join BRICS. Unilateral politically motivated decisions may give short terms gains but for the world stability and prosperity the two superpowers needs to work together and for that western countries needs to make policies to “engage” not “contain” China.

Moderndiplomacy