US needs to straighten out its domestic system malaise to compete with China
Published: Feb 28, 2021 04:48 PM
Illustration: Chen Xia/GT

Illustration: Chen Xia/GT

The Biden administration seems to have "set the tone" for steering his country's relationship with China by engaging in "extremely fierce competition", which is contrary to what most Chinese people have hoped for a US policy reversal after four truculent and destructive years of Donald Trump. 

China has aspired for a productive partnership with the US, not unbridled or even cut-throat competition that will be detrimental to both.

The international community wants to see a prompt comeback to close cooperation and partnership between the world's two largest economies and most important powers to help guard the world out of the pandemic-induced chaos and severe economic contraction.

Ill-willed, fierce competition between the two titans often leads to ugly confrontations and dented economic efficiency - the least the world needs in the aftermath of a decimating coronavirus crisis.

Actually, the Biden administration ought to address the US' own backyard by sweeping away the malefaction legacy of Trump and his loyal cohorts at Capitol Hill, instead of seeking an outside opponent and rival for competition. 

The American political and social system is seriously flawed after a liar was able to be elected to the White House, who could wield his enormous executive power to dismantle many institutions in the US, and even instigate his followers to siege the Congress just because he was not re-elected. And, to the chagrin of most Americans and the world, he escaped unscathed twice, after his comrades at the Senate acquitted him of two impeachments. 

Appallingly, Trump's containing-China policy is, incredibly, being picked up by the new administration, as Biden's top lieutenants at the Finance Department and the Office of Trade Representative affirmed recently that they will not do away with the punitive tariffs imposed by Trump on $360 billion Chinese goods, or redress dozens of Chinese companies placed by Trump on the Commerce Department's discriminatory blacklist. It also restricted the opportunities afforded to Chinese students to study science and technology at well-known US institutions of higher learning. 

Correspondingly, China's retaliatory tit-for-tat tariffs on many American goods and punishments placed on some American businesses will stay in the months to come. The tariffs and curbs on businesses will hurt both Chinese and American economies, which will also continue to distort global industrial chains and restrain global economic recovery. 

If this is what Washington wants for "extremely fierce competition" with China, it won't end well for either party, and the US is poised to lose more. 

China has readjusted its policy stance by invigorating domestic market exploration while aligning more closely with its neighbors and genuine trade partners in the EU, ASEAN, RCEP, Africa and elsewhere. Partially because of Trump's trade war, China's foreign commerce is now less dependent on the US, as shown by 2020 trade figures. 

The trend will only accelerate if the Trump tariffs are maintained on Chinese commodities, with China pivoting more actively to trading with friendly countries and keeping most US-made goods at arm's length. Until today, hundreds of US companies are filing lawsuits or complaints about Trump tariffs for causing lost Chinese market share and evaporated corporate profits.  

Speaking of "competition", the American economic system has one structural ailment - laissez-faire liberalism often leading to a few hundred oligarchies and superrich tycoons at the societal top, with a diminishing middle-class and a growing impoverished populace at the bottom. Exacerbation of the wealth divide in the US will increasingly drive the US economy towards the Indian or Mexican model. 

In contrast, China's economic governance places more importance on collectivism and public welfare. Just take a look at the huge differences of the US' and China's investment in high-speed railways and other public works, as well as the gap of college tuition prices charged in the two nations. 

To some extent, the new US administration's reluctance to negate Trump policies is a manifestation of heightening anxiety in Washington about the meteoric, nonstop economic rise of China in the past three decades, which has driven some US politicians to become more dismayed and disgruntled than usual about the systemic inertia in the US. The latest snowstorm-caused power outage and mayhem in Texas, and the nightmarish response to the COVID-19 pandemic with more than 500,000 fatalities, show that inertia.  

If the Biden administration really wants to improve its competitiveness, it should try to overhaul the broken US internal governing system, including its seriously problematic monetary and fiscal system that led to the 2008-09 global financial crisis and wrecked trillions of dollars of corporate and family wealth all across the world. China spent heavily in 2009 and 2010, which helped the world economy walk out of the malaise. 

Now, to cope with the fallout of a pandemic, the two largest economies have an obligation to closely cooperate in vaccine rollout and worldwide administration, and join hands to shore up the global free trade and investment system, and help lift the world out of its economic predicament. 

But Washington seems set to choose "fierce competition" in order to check China's growth. Also, President Biden and his top advisors are even enrolling US allies to do less business and have less contact with China, which is highly cynical, if not mean. Reasonably, many countries are giving a wary eye to Washington. 

As a matter of fact, the future international order is not to be dictated by the US, or a US-China bipolarity rule. It will always be a multipolar world, and all major powers including Russia, Germany, France, Japan, Britain, Brazil, India and South Africa and many others will be co-stakeholders in the world order. These nations will cooperate to uphold multilateralism and the global trading system with its broadly enmeshed supply chains to be protected, because of the benefits that each country enjoys as a result and to which economic well-being in each nation is tethered. 

The author is an editor with the Global Times.

blog comments powered by Disqus