On January 25, Chinese Communist Party President Xi Jinping attended the World Economic Forum by video and gave a speech in which he was suspected of shouting at the new U.S. President Joe Biden. With the Wuhan pneumonia Epidemic hitting the economy hard, the direction of U.S.-China relations has raised world concerns.
The World Economic Forum’s “Davos Agenda” dialogue, scheduled to take place online from January 25 to 29, is attracting global attention. According to Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, 2021 is a crucial year for rebuilding trust. He stressed that the world is at an important crossroads. The epidemic has hit the world hard and undermined the international community’s efforts to tackle issues such as unemployment, poverty and climate change.
In the evening of Jan. 25, Hong Kong Time, Chinese Communist Party President Xi Jinping attended and delivered a special message by video from Beijing.
According to a video released by Chinese official media CCTV, Xi said the epidemic is far from over and the fight against it continues, “but we firmly believe that the cold winter cannot stop the spring, and the dark night cannot obscure the dawn. Humanity will be able to overcome the epidemic and grow and progress and be reborn in the struggle with the disaster.”
Xi Jinping said, “Engaging in ‘small circles’ and ‘new cold war’ at the international level, excluding, threatening and intimidating others, engaging in de-linking, cutting off supplies and sanctions at every turn, artificially causing mutual isolation or even isolation, can only push the world towards division and even confrontation.”
Last year the Trump administration imposed sanctions on Chinese and Hong Kong officials for undermining democracy and violating human rights, even to the level of vice-presidential leaders under the Chinese Communist regime. And the effectiveness of the sanctions is real tough, for example, no financial institution serves Hong Kong Chief Executive Carrie Lam, who can only use cash.
Xi’s speech appears to be a shot across the bow to the new U.S. President Joe Biden.
However, the Biden Administration‘s secretaries who have not yet taken office were each tough on China Policy during the Senate hearings. Future Secretary of State Blinken also said, “We can win the race against China.” He even used the rhetoric that Trump likes to use to describe China (the Chinese Communist Party) as “the most significant challenge to U.S. national interests.
According to Lu Xiuyuan, a researcher at the independent think tank Tianjun Political Economy, the current U.S. diplomatic strategy is still a continuation of the policy under the Trump Administration. From Biden’s previous statements, he is more respectful of multilateralism. Then it is necessary to seek the agreement of allies such as the European Union and Canada before a complete foreign policy can be formulated. In recent days, Chinese military aircraft have repeatedly exerted pressure on Taiwan, and Beijing authorities are testing Biden’s willingness to implement or maintain the Trump administration’s “Indo-Pacific strategy” and fulfill its commitments to allies.
In addition, the spread of the Wuhan pneumonia epidemic is also affecting the course of U.S.-China relations. 2020, the sudden outbreak of Wuhan pneumonia has triggered not only a global public health crisis, but also posed serious challenges to various economic and social sectors.
According to WHO statistics, there are now nearly 100 million cumulative confirmed cases of Wuhan pneumonia worldwide, with more than 2 million cumulative deaths. According to a report by the United Nations Development Programme, nearly 100 million people worldwide may fall back into extreme poverty in 2020. 2021, the gloom of the epidemic may still leave the world economy and international situation in difficult times.
Ren Chongdao, a researcher at Tianjun Political Economy, pointed out that the negative impact of the Wuhan pneumonia epidemic will fully emerge this year, and the economic situation will be even worse. Previously, in the process of economic globalization, all countries have actively or passively participated in it, and no one can be left alone for such an irresistible factor as the epidemic. The Biden administration’s policy focuses on the domestic epidemic and the economy, and if not handled properly, it will also lead to a backlash in domestic public opinion.
The pace of reverse globalization is also accelerating at the moment. Especially after the Wuhan pneumonia outbreak last year, the trend regarding reverse globalization has intensified and it is also a key variable that will affect China’s economy and capital markets in the long run.
It could even be argued that the core of the current counter-globalization is de-Chinaization, and that the Chinese economy will find it difficult to escape the negative impact in the future. Driven by the impact of the Wuhan pneumonia epidemic and the de-Chinaization of global supply chains, foreign capital continues to exit the Chinese market, and if the scale and speed continue to increase, the impact on China’s job market cannot be underestimated.
On January 18, China’s National Bureau of Statistics released its annual report on China’s economy for 2020, with a preliminary estimate of annual gross domestic product (GDP) of 1,015,986 billion yuan, an increase of 2.3% over the previous year at comparable prices. By quarter, the first quarter was down 6.8% year-on-year, the second quarter grew by 3.2%, the third quarter by 4.9% and the fourth quarter by 6.5%.
From the data, it can be seen that the so-called important pillar of the economy’s internal circulation, consumption, is sluggish and domestic demand is low, with the key reasons being the decrease in people’s income and the rapid rise in prices.
Beijing authorities want to boost domestic demand and stimulate Chinese people’s consumption, thus boosting economic growth. However, the current situation shows that consumption figures are not optimistic due to the impact of the epidemic. At the same time, a large amount of household debt is composed of housing loans, and in the long run, people’s consumption power is overdrawn and consumption growth is being exhausted.
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