Economic power

Economics professor Zhu Ying notes that the new Biden administration is trying to rope in the EU in its efforts to contain China. However, the evidence so far seems to suggest that such a plan is unlikely to work, given the pragmatic stance exhibited by key countries such as Germany. The China-EU investment agreement is an early warning that the EU may not be a firm ally of the US, not forgetting that China has always leveraged the economy to divide the West.

In January 2021, Chinese Foreign Minister Wang Yi visited several ASEAN countries, including Brunei, Indonesia, Myanmar and the Philippines, in an effort to push for collaboration in key projects under the BRI, and providing access to Chinese vaccines. However, Beijing’s passage of a new coastguard law has undermined Wang Yi’s outreach efforts. ISEAS academic Lye Liang Fook explains what is behind China's efforts and looks into its implications.

At last year’s WEF, Prince Charles and other leaders proposed the “Great Reset” — a global effort to rebuild the global economic structure. However, as appealing as this may sound, Hong Kong commentator Chip Tsao points out that the current slate of world leaders and international organisations are probably unable to rein in private juggernauts and get a handle on the Chinese wild card.

The conclusion of the EU-UK Trade Cooperation Agreement and the EU-China Comprehensive Agreement on Investment (CAI) in the last days of 2020 sent a strong signal that the EU will not wait for the US to resume a leading role in the world economic order. Building partnerships with countries like China are just the impetus the EU needs to deepen integration and build better prospects for itself. In this move away from a US-centric view of the economic order, the EU is not alone.

A new study suggests that official Chinese lending has dropped in recent years. This stems from lessons learnt after a decade of mistakes in overseas lending. How would this affect Belt and Road Initiative projects in Southeast Asia?

China’s manufacturing sector is known to be the “world’s factory”, and its scale is unrivalled. However, Chinese academic Chen Hongbin notes that this manufacturing behemoth is not as strong as it seems.

Despite the challenges of Covid-19, China registered 2.3% growth in 2020, the only major economy to do so. A combination of able pandemic containment efforts, expansion in industrial production and fixed asset investment, as well as prompt measures to help micro, small and medium enterprises brought them to this point. If this positive trajectory continues, China looks set to continue its remarkable rebound in 2021.

Even if it might be a unilateral move, China should embark on its third phase of opening up, says Zheng Yongnian. The first phase of China’s opening up took place after the Opium War while the second was led by Deng Xiaoping’s reforms. Now, in the face of unprecedented challenges of the new century, China must undertake a higher-order opening up, and work towards setting global standards and formulating rules at the international level. These endeavours begin at home, with the domestic standardisation of rules in different regions and localities.

Talks on the China-EU investment deal were concluded on 30 December 2020, lending fresh impetus to China’s further opening up to the world. However, the response so far, both externally and internally, seems to be lukewarm to the idea of what some call China’s third opening up. Zaobao associate editor Han Yong Hong ponders why this is so and analyses where China is likely to go from here.