Biden: The Chinese complication, Joe Biden & the European Union

Biden: The Chinese complication, Joe Biden & the European Union

 

The People's Republic, its economic expansion and growing political influence is the greatest challenge for the new government of a weakened and absent US after four years of Trumpism. 

 

Martin Wolf, the great Financial Times analyst, a few years ago defined China as a "premature superpower." A series of circumstances would have advanced the place of the prevalence of the People's Republic but without consolidating or maturing the necessary foundations to be in that place. Mindful of the geopolitical impacts of the current pandemic and the meagre results of the trade war with the US, this concept may have lost its rigor.

 

China has been omnipresent in 2020 although not only due to the plague of the coronavirus whose origin is attributed to Wuhan from where it would have been transmitted to the world. The end of the year indicates that these two protagonists, the disease and the Asian power, will continue to centralize the scene forward, although for very different reasons. Contrary to what could have been assumed just months ago, the People's Republic arrives in January 2021 as one of the few winners of the drama that has shocked the world. This condition determines the place that it intends or that it will definitely occupy on the world stage after the change of power in the United States to Joe Biden, the other pole of the geopolitical transformation that will take place in the coming months.

 

There are three episodes in these hours, also linked by the pandemic, which should be observed. One refers to the advancement of the times of development and hegemony of the Asian power on horseback of the asymmetries that the disease brought. Another, the escalation of the repression of the Xi Jinping regime, deliberately ignoring the worldwide protest, with the significant case of the arrest of journalist Zhang Zhan! Finally, the historic embrace that Germanized Europe has just crowned with an unprecedented investment agreement with the Asian power!

 

China: The first item on that list was detected, among others, by the Centre for Economic and Business Research, a powerful London-based institute, which determined that China will overtake the US as the leading global economy in just seven years, much earlier than expected. They attribute this to the fact that the Central Empire ends 2020 with an estimated growth of 2%, the only major economy with advances in its GDP. On the contrary, the US will contract by around 5% which will allow Beijing to close the gap. A significant piece of data from this evaluation is provided by the fact that the People's Republic already surpassed North America in the third quarter of the year that ended as the largest trading partner of the European Union.

 

That condition is what gives meaning to the pact announced this past Wednesday between the European bloc and the People's Republic, firmly promoted by the German Angela Merkel to leave it tied before the end of her rotating presidency of the EU on December 31. A temporary issue that could indicate that it was not intended to bluntly ignore the US and especially its imminent president, Joe Biden, as everything indicates that it has happened.

 

The episode confirms that the Atlantic relationship is damaged and it will require time to stitch it up, although it will hardly return to the levels before Donald Trump's anti-European campaign. But, besides, it confirms that the US is not what it used to be today, although the EU came a long way from constituting what some of its leaders suppose or dream of, an autonomous superpower between the two giants.

 

The Sino-European agreement has unique advantages for both parties. It provides Beijing with a meaningful and pragmatically in the pure north of the world for its technological and strategic developments such as the Silk Road. In return, it cancels the obligation of mixed associations with Chinese firms for European companies that invest in the People's Republic; the criterion of intellectual property is broadened and the importance of the issue of state subsidies that facilitate competition from Chinese companies is raised on the agenda. But, essentially, it opens up to Europeans the immense Chinese market where consumption, according to calculations by Goldman Sachs, will explain this year that more than half of the national GDP begins: about 8.4 trillion dollars compared to a product of 15, 6 trillion.

 

This agreement is the second of great importance that the Chinese empire has crowned in the last weeks of this dramatic 2020, apart, by the way, from the renewal of the controversial secret pact with the Vatican. In November, Beijing launched the Regional Comprehensive Economic Association (RCEP), the world's most important free trade agreement, which unites 15 Asia-Pacific nations that account for 30% of the global economy. It was the most complete synthesis of the redesign of the geopolitical map. That space was led by the US with the so-called Trans-Pacific Agreement that Barack Obama built and from which Trump left in 2017. Beijing, which was not in that pact, now left the US out of this enormous wealth-generating machine.

 

Biden rules out recovering that initiative. He knows that winning support from a possibly Republican-dominant Senate for a multilateral deal would be an impossible mission. China has unlikely allies on Capitol Hill. But Biden is willing to rebuild bridges with Europe and seek to speak with a single voice to reconfigure the link with China. It has an understandable urgency. The last years of insularity and geopolitical abdication of the United States, together with the soap opera of Trump denying having lost the elections and backfiring the North American democracy, have emboldened Chinese communism that is considered impervious to international pressure.

 

The case of Zhang, incarcerated to four years on ridiculous blames for reporting what was unfolding in Wuhan at the beginning of the pandemic is an example of that behaviour that adds to the pressure on Hong Kong or the repression of the Uighur minority in the province from Xinjiang. As noted in Foreign Affairs, Michéle Flournoy, Obama's deputy defence minister, "the greater the Chinese leadership's confidence in its own capabilities, the greater the doubts it harbours about the US's ability and resolve."

 

That dynamic, where the emerging power sees the one it still governs as decadent, lurks in a very dangerous risk zone. "An important miscalculation could make Chinese leaders to finalise that they should - for example - continue on Taiwan, and constitute a fait accompli that a weakened and the distracted US would have to accept," the former official warns.

 

Biden - These factors, together with the power are economic and therefore political growth is what makes China the main puzzle Joe Biden will have to deal with. Flournoy raises the need to build a deterrent to convince the Chinese leadership that the US not only has "the ability to crush any aggression but also that there is the will to do so. Today Beijing doubts both aspects."

 

The war between China and the United States is not commercial, although it was established in those terms with the balance of an extraordinary cost in the pockets of the Americans. According to a Fortune report, American companies spent up to $46 billion by the end of 2019 for expenses generated by the tariffs. But there are worse data. Bloomberg Economics recently estimated that the trade war, apart from the pandemic, cut this 2020 some 316 billion dollars to the North American economy.

 

The war, which had those costs and little profit, has been for technological supremacy. "The Chinese Communist Party understood that technology is the way to power," The Economist warned a couple of months ago. The West especially rejects the “Made in China 2025” initiative, a gigantic state support structure for the development of semiconductors, robotics, supercomputers, artificial intelligence, and telecommunications.

 

Lorand Laskai, a researcher at the Council on Foreign Relations, argues that the goal of the program "is not so much to join the ranks of high-tech economies like Germany, the US, South Korea, and Japan, but to replace them entirely." Made in China 2025 exists to achieve self-sufficiency through technology substitution and to be the superpower that dominates the global market in critical industries.

 

A nightmare for America

 

Joe Biden bets on the economic power of his country together with his allies to limit Chinese claims, as he proposes in his famous article Why America Must Lead Again. The Democrat, although he will maintain the tariffs against China, for now, says that unlike Trump, he has a strategy to not only feign toughness. In part, it is a $ 300 billion fund for research and development along with another $ 400 billion packages to stimulate local production of critical and high-value supplies, such as medical equipment, 5G telecommunications hardware, and vehicles.

 

 

 

 

Electrical

 

The purpose is for the US not to be dependent on China, a decoupling that will moderate the formidable interaction of their country with the Asian economy. But that will mean an increase in taxes for investment in these items, and of course the rise in the cost of the products that would replace those that the Asian giant provides at a bargain price. A difficult policy and without clarity of results that will depend on the quality of alliances, especially economic ones, that the US can rebuild. China, meanwhile, seems to be trying on its clothes to return to being what it was for centuries.