Well we made it out of the Trump era, and there were thankfully no further China land mines laid by him or the former (yay!) Sec of State Pompeo. Steve Bannon, who has some interesting China angles attached to him, got a pardon, but he could be re-indicted with little trouble. Failing that, the chances of him getting himself into further entertaining strife are huge. The suggestion that Huawei’s Ms Meng could benefit from a last-minute reprieve also did not turn out to be correct, so she is still in Vancouver and the wheels of justice continue to plod through the extradition process. Ditto Edward Snowden—remind us again, why was it he initially ran to HK?
The next question is what the Biden China strategy is going to be. The urgency of other issues, including the pandemic and state of the economy, will push back any categorical statements, but the indications are, as previously stated, that the basic China position at the end of the former administration will be the starting point, and while Biden began his presidency by instantly rolling back many Trumpian policies and positions, nothing of the kind is expected on China. The new Sec of State was quoted as saying that Trump’s China policy was basically right but flawed in terms of actual strategies used. Biden’s team is expected to stress a collective approach to China issues. The sigh of relief from many world capitals at the change in the guard was audible even from here. There has been much discussion about the extent to which America can recover its reputation and be once again respected and trusted. Our guess? The world needs an “America” and there are no other viable candidates. Much the same as the situation with the US dollar.
China economy numbers continued to look good, and the reported number for 2020 GDP growth was 2.3%. Chinese stats always have that question mark next to them, but regardless of the details, there is no doubt China did better than any other major economy last year, due to good-old draconian management controls. Various analysts are now predicting that China’s economy could overtake the US to become the world’s biggest by 2028 as a result of the virus. There are lots of other issues that could impact on that, and seven years is a long time in economics. But while Biden’s ascendancy provides hope of the US actually bringing the virus under control in the months ahead, there is no doubt that the relative size of the two economies has been altered in this extraordinary time.
Enjoy the weekend.