Henry Kissinger has warned that an armed conflict could break out between the United States and China if they fail to resolve their trade war.

The sober remarks from the former US Secretary of State came at a conference in Beijing on the future of the two economic giants.

“If the conflict is permitted to run unconstrained, the outcome could be even worse than it was in Europe,” Kissinger, who was instrumental in normalizing diplomatic relations in the 1970s between Washington and Beijing, said at the Bloomberg New Economy Forum on Thursday.

“World War I broke out because of a relatively minor crisis … and today the weapons are more powerful,” the 96-year-old added.

China and the US have been caught in a trade dispute for 18 months, with the two sides struggling to reach an agreement despite 14 rounds of talks. Tensions have also been running high on the diplomatic front.

Beijing has lashed out at Washington over US naval operations in the disputed South China Sea, while the US has heavily criticized China’s policy of the mass detention of ethnic Uighurs. Capital Hill has also voiced support for the pro-democracy movement in Hong Kong, with protests entering a sixth month.

“China is a major economic country. And so are we,” Kissinger said. “And so we are bound to step on each other’s toes all over the world.”

The former top diplomat stressed that during the Cold War between the US and the Soviet Union, a plan to reduce the nuclear capacity of both countries was a top priority.

But in China, because former conflicts between the two had always been “passive,” he pointed out that there was no framework to deal with Beijing as a “military power.”

Former US Secretary of State Henry Kissinger has warned of a new Cold War between China and the United States. Photo: AFP / Alex Wong / Getty Images

If the two sides keep seeing “every issue in the world in terms of conflict” with each other, it could be “dangerous for mankind,” he added.

Kissinger, who was former President Richard Nixon’s Secretary of State, said the trade negotiations were just a “substitute” for more substantial talks about conflicts between the two, including tensions over Hong Kong.

When asked if unrest in the semi-autonomous region of China could be the “flashpoint” for a new Cold War, Kissinger said he hoped the “highly emotional” issue would be “settled by negotiations.”

Relations between the world’s two largest economies dominated the Bloomberg New Economy Forum. In a keynote address, China’s Vice-President Wang Qishan took a sledgehammer to protectionism before reaffirming Beijing’s commitment to let the market play a decisive role.

His comments came after an interim trade deal with Washington still hangs in the balance following US President Donald Trump’s claim that China had not made enough concessions.

Wang said the international order was “under attack” because of “protectionism and populism” without naming the US.

“The rise of protectionism and populism have given a shock to the international order and economic globalization,” he added. “We should abandon the zero-sum thinking and Cold War mentality.

“We should continue advocating multilateralism and democratization of international relations, building up a fair and reasonable global governance mechanism,” Wang, who is part of Chinese President Xi Jinping’s inner circle, said.

– additional reporting AFP