A view on US-China relations beyond 2020
Post-pandemic US-China Relations
It is widely observed that as the Chinese economy is developing, the anticipated liberalizing effects on the regime and society never seem to have materialized. This reality is tricky because the relationship between China and Western countries such as the US is one of the most important relationships in the next several decades, which can shape fundamentally the ways in which we live, and the kind of world the future generations will inherit.
China: Looking back on 2020 and beyond
Looking back on 2020, thanks to the whole-of-society epidemic-controlling efforts, the GDP of China maintained a positive growth rate. According to S&P Global, the Chinese economy grew by 2.3% in 2020, compared to a decrease of 3.5% for the US. Despite being its slowest annual growth rate since 1976, the statistics suggest the strength of the Chinese economy against the global Covid-19 pandemic. From 2021 onwards, the analysts have identified several trends to watch for the Chinese economy.
1. It may take a longer time for China than the rest of the world to reach herd immunity because 1.) China’s relatively lower efficacy of Vero-cells-based vaccines produced by companies Sinopharm, Sinovac, and CanSino. On December 29, 2020, Sinopharm reported 79% efficacy in an interim evaluation and 86% efficacy, which is still quite low compared to Moderna’s and Pfizer’s 95% efficacy rates for their mRNA vaccines. 2) China’s relatively slow population-level vaccination efforts. The chairman of Sinovac told state media outlet CGTN that Sinovac will produce 300 million doses a year in its newly built 20,000 sqm production plant. Like all the other vaccines, it requires two doses, which means it is currently only able to inoculate 150m people a year — just over a tenth of China’s population.The below figure shows countries with the highest vaccination rates, with China having administered 0.69 doses per 100 of its citizens as of Jan 10, 2021.
2. Well before the pandemic, there has been a prioritization of the modernization of the urban over the suburban, the development of the coastal areas over the inland areas, and the attainment of GDP growth targets over environmental standards in China. The stark socioeconomic inequality in China is one of the focus areas for the Chinese government to address in the years ahead.
As one can see from the first graph, the inequality index of China has overall been decreasing since 2004; yet from 2015 and onwards, there has been a spike with a considerable decrease in 2019, where in 2019 the score was 46.5 points. However, the coefficient of 40 points is already alarming, as per the United Nations standards.
According to the second graph, while the top quantile has been increasing over the years, the bottom quantile has been staying put, indicating an alarming gap between these two groups.
While it will likely be well beyond 2050 when China reaches the status of a developed nation, the Chinese economy already has lots of strengths, driving much of the momentum in the world economy and offering plenty of opportunities for investors. Some evidence identified by the analysts is the following:
1. In China, real GDP has been increasing steadily since 2009 and is set to grow by 6% until 2024, even considering the negative effects of the pandemic.
2. Despite the pandemic, FDI’s increased considerably in China in 2020. According to SCMP, Foreign direct investment (FDI) into China rose 4.5 per 1. cent from 2019 to US$144.37 billion last year – the fourth consecutive year of growth. From the graph below, it can be seen that foreign direct investments have been on constant growth, which suggests an attractive economic environment for the investors that further boosts economic expansion of China.
3. The last indicator of the healthy Chinese economy is the significant increase in consumer spending over the years in renminbi.
US-China Relations: After Trump Administration
Despite many adversarial elements, the US-China relations have equally promising aspects. The analysts discuss some signs (which are, of course, difficult to come by) that may be helpful to smooth away some obstacles for a promising relationship, as well as remaining challenges.
- A lack of mutual understanding is easing: many millennials in China and Asia have developed a decent mastery of the English language and a sufficient appreciation of the Western culture, compared to their parents and grandparents’ generations who have not had similar kind of opportunities before. Two graphs are presented in the following, with one of English Proficiency in China by regions, and the other of English Proficiency in China according to EF EPI index.
Still, too few people from China and the US are making a serious effort to understand a culture entirely different from their own. The analysts believe that based on biased understanding, policy choices of either country (e.g., the trade war initiated by the US and the Chinese ``warrior wolf’’ diplomacy) regarding the other may have very likely been biased as well or even flawed, landing both countries into a vicious cycle of ceaseless bickering and confrontations.
2. The rule of international law seems gradually superseding the rule of great powers. On several occasions, Xi Jinping suggested the importance of the rule of law for the international society in his talks, most recently by quoting from Chinese classics Xunzi. Obviously, Xi is opposed to the practices of unilateralism and the neglect of international norms under the Trump administration. However, it is worth pointing out that so will China be subject to the rule of international law, the same set of laws that may have China answer the demands from the international society on abstaining from abusing human rights of minority groups. For instance, the US State Department declared on Jan 19th, 2021, that the Chinese government is committing genocide and crimes against humanity through its wide-scale repression of Uighurs and other predominantly Muslim ethnic minorities in its northwestern region of Xinjiang, including in its use of internment camps and forced sterilization. President Biden, a critic of China’s human rights record during his decades in public office, has also used forceful language to describe its repressive policies. In August, he released a statement calling China’s actions “genocide” As part of the realization of the rule of law at an international level, there seems to be the need for more sincere dialogues from the opposing sides of China and the US as well as the international society over what constitutes legitimate behaviors acceptable by all, which may help toward clearing the obstacles in the US-China relationship.
[1] “Coronavirus: How effective are the Chinese vaccines?” https://www.dw.com/en/coronavirus-how-effective-are-the-chinese-vaccines/a-56370802
[2]“Covid: What do we know about China’s coronavirus vaccines?”https://www.bbc.com/news/world-asia-china-55212787
[3] “Gini index: inequality of income distribution in China from 2004 to 2019.” https://www.statista.com/statistics/250400/inequality-of-income-distribution-in-china-based-on-the-gini-index/
[4] “Income diverging in China.” https://www.statista.com/chart/22306/average-annual-disposable-income-top-bottom-quintile-china/
[5] “Real GDP of China from 2021 to 2024.” https://www.statista.com/statistics/263770/gross-domestic-product-gdp-of-china/
[6] “China FDI rose record level 2020 despite coronavirus.” https://www.scmp.com/economy/china-economy/article/3118469/china-fdi-rose-record-level-2020-despite-coronavirus-fastest
[7] “China’s Foreign Direct Investment.” https://tradingeconomics.com/china/foreign-direct-investment
[8] “China’s consumer spending.” https://tradingeconomics.com/china/consumer-spending
[9] “English language proficiency in greater China in 2017, by region.”
https://www.statista.com/statistics/949264/greater-china-english-language-proficiency-by-region/
[10] “EF English Proficiency Index.”https://www.ef.com/ca/epi/regions/asia/china/
[11]“U.S. Says China’s Repression of Uighurs Is ‘Genocide’.”
https://www.nytimes.com/2021/01/19/us/politics/trump-china-xinjiang.html
[12] Ibid.
