Why Joe Biden as president could derail China’s plans

If you’re wondering why we don’t see China’s top leadership much in public these days, it’s probably because they’re busy counting their Trumpian loot.

The biggest misnomer regarding Tuesday’s US election is that Beijing wants Joe Biden to crush Donald Trump. Well, maybe from a schadenfreude perspective, it would be fun to see President Trump sent packing his bags to his Florida resort town. But then Xi Jinping would have far fewer wins from a Biden White House.

Objectively speaking, who has benefited more from the last 1,378 days of Trumpian chaos than Asia’s largest economy? Beijing laments tariffs as much as Trump’s stifling campaign Huawei TechnologyByteDance’s TikTok and Tencent’s WeChat.

Beijing also hates @realdonaldtrump tweets and being blamed for Trump’s disastrous response to Covid-19. Although China deserves contempt for allowing the pandemic to spread, America’s epic mishandling of the virus is entirely on Trump.

But China’s economy ending this year-long dumpster fire in the dark while Trump’s sinks further into the red says a lot. China is expected to grow 2% in 2020 as the Trump Nation struggles to extricate itself from 1929 conditions.

China is achieving this feat despite the ever-increasing number of obstacles Trump puts in its way. Nor has Beijing resorted to the burst of stimulus on the scale that Washington has had to roll out. The People’s Bank of China has not resorted to massive quantitative easing or debt monetization.

The real divergence, however, lies in how the economic fallout from the pandemics works in Xi’s favor. This week in Beijing, the Communist Party laid out its economic vision for the best five years, its 14and Phone brainstorming session. It is also about agreeing on an agenda for where China wants to be in 15 years, in 2035.

We’ll learn more in the coming weeks, but the focus on important topics such as fostering technological innovation, growing the middle class, sustainability, and the mechanics of China’s openness to a where its economy will dominate in the not so distant future.

This strategy is diametrically opposed to Trumponomics. Since 2017, Trump has sought to saw off swathes of China’s economy and bring them back to America’s path. It’s an old-fashioned approach that could have worked in, say, 1985, when the Group of Seven nations could rock world trade with a simple press release. Sometimes even at the Plaza Hotel in New York, which Trump had owned for decades.

Though a drag on China, Trump’s tariffs, ‘entity list’ of banned companies and moves to strangle the mainland’s 5G equipment haven’t reversed the trade deficit any more than they have. increased the competitiveness of the United States. Lots of drama, but little hard evidence, if any, that Trump has extracted anything of merit from Beijing.

This “phase 1” trade agreement that Trump is touting? The United States would have done better to remain in the 12-member Trans-Pacific Partnership, created to curb China’s mercantilist exploits. That day in January 2017 when Trump pulled out of that deal was one of the best Xi’s tenure. Since then, his administration has outmaneuvered Trump’s at every turn.

A Biden White House won’t, a Xi no doubt hopes that won’t happen.

People tend to miss the problem forest for Beijing through the short-term relief sheets. Of course, the days after a Trump defeat could be mild in the Communist Party’s halls of power. China would also be right to believe that Biden would reduce or even eliminate tariffs that have proven to hurt American consumers more than Chinese households.

Until reality sets in. In addition to joining the Paris climate accord, Biden is certain to rejoin the TPP. Worse still for Xi in 2021, Biden’s team would almost certainly bolster the pact by pressuring South Korea, Indonesia, the Philippines and other Asian upstarts to join. Maybe pressure Pacific nations everywhere to join.

This would increase the influence of the democratic world to negotiate with Beijing. Like Trump, Xi prefers bilateral negotiations to multilateral arrangements. Easier to shed your weight that way.

A Biden White House would not look the other way as Beijing continues to clamp down on Hong Kong. The Trump crowd was too busy trying to preserve his weak beer trade deal with China to remember that the United States once stood with other democracies. Biden is also not going to give Chinese leaders a free pass for the mass internment ethnic Uyghurs in northwestern Xinjiang.

Another worry for Chinese leaders: Biden will beef up at home, putting America back in the tech race for 2025 and beyond. Silicon Valley has long lost its mojo. Most of the resulting “innovations” are better and faster ways to sell advertising on the web. The Trump years were more about bringing back coal and bullying Detroit into making less fuel-efficient cars.

Biden, on the other hand, plans to spend hundreds of billions of dollars, $300 billion to start, on new research and development to ensure America’s tech industry regains momentum. The stakes are high. As Trump throws grenades at the global trading system, Beijing is investing aggressively to make China the dominant power in 5G, electric vehicles, semiconductors, artificial intelligence, renewable energy, and more.

Four more years of Trump taking America back to 1985 would be exactly what Xiconomics needed. It won’t be fun while it’s happening, but it would put China even further ahead of schedule for 2025 and then 2035. The last thing Beijing wants is for a Biden White House to stop China from owning a future Trump loses.

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