China-US trade war

Economics professor Zhu Ying notes that China-US trade ties are currently highly politicised, not least because of bilateral military competition, and what the West sees as China’s authoritarian approach in the digital sector. The US trade war is set to see further ripples and partial decoupling of supply chains may worsen. Can this standoff be resolved?

Amid the effects of the China-US trade war and the Covid-19 pandemic, global manufacturers are seeing the need to adopt a ”China+1“ strategy by diversifying their supply chains or business operations beyond China. However, moving parts of the supply chain to the Southeast Asian region is not so straightforward. What challenges do they face and how are they overcoming them? Will China's position as the "world's factory" be shaken and how will its economic model be changed?

When China’s “dual circulation” strategy was launched last year, some analysts interpreted it to mean that China would be focusing more on its domestic market. Figures show otherwise. Studying trade and investment indicators over the past few months, Chen Gang concludes that China’s economic engagement with the world is increasing as it runs on dual domestic and external engines.

China is no longer as enamoured with the US as it used to be, with its realisation that the US will never allow it to reach to its level and stand on an equal footing. Freed from sentimentality towards the US, China may accelerate its search for new partners to ensure its survival, says Han Dongping.

Based on science, there is no firm understanding of the effectiveness of the vaccines or how long they last, so getting vaccinated does not mean immunity. Based on politics however, countries seem to be starting to use vaccine nationalism as a tool. Is it not enough to have two worlds split apart by different internets — now will we see a world divided into those who used the Chinese vaccine and those who used other vaccines? Viruses know no borders, but it’s looking like vaccinations will. 

In the development of 1G to 4G technology, the US, Europe and Japan took turns to dominate. When it comes to 5G, China says that it has built the largest 5G network globally with other 718,000 5G base stations throughout the country, which is at least ten times the network in the US. China is also strong in 5G chip design and is making inroads in setting global standards for wireless networks. Is China getting a leg up in the tech race? 

US-based researcher Wei Da notes that China-US relations are at risk of stagnating and reaching a state of "cold peace" with the current development. While China has been making friendly overtures to the US, it is also signalling that the ball is in the US’s court. Would any side give space to the other? Who will benefit from such a situation?

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.

The China-US trade war looks set to continue under the new Biden administration, says economics professor Zhu Ying. Whether in terms of preventing technology transfer that could have military applications or seeking to enforce "structural changes” in China’s economy for fairer competition, the US will seek leverage through the trade war. Are we heading for a stalemate if the US wants to see a China that is playing by global rules, but the Chinese insist on pursuing an economic model with Chinese characteristics?