Kevin Rudd, former Australian prime minister, is a fluent Mandarin speaker and a long-time China observer. On the sidelines of the China Development Forum in Beijing, CGTN host Tian Wei talked to him about the breakout of a “trade war” between China and the United States. 

Rudd said that there's only a 50-50 prospect of coming out of it intact.

“I have never supported tariff or trade wars, because trade wars are very easy to start and very hard to end. I understand China will react. But the bottom line is we have to find a way of reintroducing the stability in the US-China economic relationship,” said  Rudd. “If that is unstable, then it will be bad not only for the two economies but also bad for the region and the world.”

Rudd noted that US President Donald Trump sees himself as a master tactician. 

“His strategic objective is to reduce the bilateral trade deficit; his tactic is to give everyone a dramatic example of what the US is capable of doing, through unilateral tariff measures,” said Rudd. “My only concern with President Trump is that he is not necessarily always a consistent strategist. He might be good at tactics, but I'm not so sure sometimes about his strategy.”

And there is always the real danger of whether the trade conflicts between China and the US will get out of control.

“Underneath of all, there is an opportunity to fix it, I would say right now it is a 50-50 prospect whether it can be fixed underneath with all the external drama," said Rudd. “If it is not fixed, it can go to the heart of each country's bilateral trade interests. Then it’s not just the effects on the two country's economy, it's the impact on the existing rules-based system governing international trade developed for the last 75 years.”

As the impacts are on the entire world, Rudd pointed out that the responsible action of all members of the World Trade Organization is to stand up and defend the rules of the system.

“The rules of the system say if you get a dispute between two member states, you use the dispute resolution mechanism of the WTO to resolve the dispute. That's the virtue of the international law. It's certainly better than going to war – trade war or physical war.”

But are the member states standing up? The US has already announced measures on steel and aluminum on the world, and Rudd said what the countries were responding to then was very much similar to what China is now facing.

“The question is how you deal with the Trump reality. [Member states ask themselves] ‘Do I think this is a good measure? No I don't. But it's the reality. And [the US] is still number one. So we got to work the parameters of that’.”

“My greatest fear is that the United States walks away. It is at that point the system collapses. You cannot have the number one economy in the world just say 'nah, it doesn’t work,' because then everyone else walks away,” Rudd warned. “That's where we go from an orderly international trade system to chaos.”