They always say it comes before a storm, but the most notable thing about news these days compared to prior to Jan 20 is that it is not so frightening to open it up, and developments generally seem measured, incremental and almost expected. China-US relations are still facing the same issues, but the Biden team to deal with them is now basically in place, and while many of the faces come from the old Obama China crowd, the general sense is of a new awareness of the issues and challenges. In terms of specifics, China failed to meet its US import targets under the agreement with the previous administration, but US exports of food products to China are currently booming. It’s still not entirely clear how the US will deal with the 2022 Olympics, but a boycott at this point feels unlikely. How about Europe? The EU parliament was this week discussing the China-EU investment agreement, agreed in principle in the dying days of the former US administration, and it is meeting strong headwinds. One imagines that US diplomats are making their views known. Investment is exactly the kind of area where the Biden team has been calling for coordination. Also in that general area, the former Google Chairman Eric Schmidt said this week that China’s technology positioning is strong, and that it is only one or two years behind the US. “The threat is very real,” he said.
China’s economy continues to feel solid, and the central government announced plans to double the economy by 2035, largely with massive infrastructure spending—more high speed rail lines and airports, plus a super-fast Maglev link between Guangzhou, Shanghai and Beijing that will reportedly do the GZ-BJ trip in three and a half hours. Wow. But while there is money for domestic infrastructure, there may not be so much left over the infrastructure elsewhere—the latest reports indicate BRI spending by China has all but dried up. And a last interesting indicator for the future for Chia manufacturing —Xiaomi announced that effectively 100% of the assembly of its phones and TVs are now being done in India, not in China. Double wow.
Have a pleasant weekend.