The new US president has been busy, but he finally got around to making a more categorical statement on China, which was generally robust without being too specific—probably the right approach and a major shift from the last presidency when the guy was constantly tweeting all sorts of unpredictable statements. One can argue that the Trumpian approach left the Chinese perplexed—always good to have the other side unsure of what the hell you’re doing. But ultimately, Trump was easy to predict and not hard to manipulate. Biden? Back to the old diplomatic process, which at the least allows for more effective coordination with other players, and that is a key part of the game plan.
Biden described China as the “most serious competitor” to the United States and said his administration would take on issues on various fronts. “We’ll compete from a position of strength, by building back better at home, working with our allies and partners, renewing our role in international institutions and reclaiming our credibility and moral authority,” he said. We’ll see.
In another development, the new US administration indicated it was doing a review of supply chains to reduce reliance on other countries for essential medical supplies and minerals. It also appears there will be no let-up in terms of controls on what the Chinese government most wants, which is access to semiconductors. But they have been preparing for the day for a long time.
In other news, Ant Financial reached agreement with the authorities which will bring it and other fintech companies firmly under the control of the system. Meanwhile, debt mountains are still an issue, efforts to do an end-run round the US dollar continue, and the economy while in pretty good shape is going to suffer from the severe virus crackdown on travel back home for CNY.
Enjoy the last weekend of the Year of the Rat.