Biden has been US president for 10 days or so now, and we’re starting to get a clearer sense of the direction of US-China relations, or at least we now have some data and announcement points to consider in terms of plotting a course. Biden’s pick for Sec. of State, A. Blinken, was confirmed, which means the US State Department has a credible figure running it with the full support of the US president and the authority to roll out a coherent foreign policy for the first time in four years. The first moves indicate a balance of support for and rollback of Trump-era policies. Implementation of the directive that US stock markets delist Chinese companies with suspected ties to the Chinese military, including massive players like China Mobile and China Unicom, was suspended pending review. But the US blacklisted the long-awaited Chinese entrant in the commercial airliner market, COMAC. This has big implications for the airliner’s future as US regulatory approval for aircraft is hugely important globally, and the Chinese market is going to be the biggest buyer of aircraft in the coming decades. Takeaway? Airbus stock is a buy.
China’s economy continues to look pretty good as it powers into 2021, but the stock market and property markets are both a bit jittery. Stocks because the Center wants to start pulling back on various virus era supports and property because inflows of cash into the economy have resulted in crazy property market booms in all major cities. But what IS the right price for an apartment in Shanghai or Beijing? If it is true that the Chinese economy is being fundamentally decoupled, then comparisons with property prices in New York and London have increasingly little relevance.
But beyond China and the United States, there is Russia. While the Biden administration reaches out to other countries around the world to discuss a new approach to China, what is happening in the north is worth watching. If there is one sure way to shift the current global balance, it would be if Russia was to transition to another mode of governance. Over the past two decades, Russia has had China’s back, not only geographically, but also ideologically and strategically. We have absolutely no idea what the chances are of a change, but Navalny gives no indication of being either naive or an idiot. This weekend, it could be worth watching what happens up there.