China will end this year as the only major country in the world to see its economy grow rather than contract.
Why is this important: China is operating from a position of great strength, with an economy expected to grow 8.4% in 2021. If President-elect Joe Biden sees China as a “serious competitor”, then competition will be fiercer during his presidency at any time. in history.
What they say : “No matter how many times you hear the Chinese growth story, it continues to have the ability to shock and amaze,” says Columbia historian Adam Tooze. “In terms of scale and speed, it’s unlike any previous experience.”
By the numbers: China’s economy is expected to grow by 2% in 2020 and another 8.4% in 2021. By the end of next year, its economy is expected to be 10.6% larger than it was at the start. of this year.
- On the other hand, after shrinking 3.6% this year and rising 4% next year, the US economy will end 2021 just 0.25% higher than at the start of 2020.
What happened: Wuhan, China was the first region in the world to be locked down in an attempt to bring the coronavirus under control. Today, its nightclubs are teeming with revelers, none of whom feel the need to wear masks or socially distance.
The big picture: China managed to become a post-COVID economy a few months after the outbreak of the virus.
- A Lancet study found China fully and effectively utilizing its centralized epidemic response system, along with new memories of the SARS pandemic and a low incidence of nursing homes.
- The lockdown, which lasted 76 days in Wuhan, was particularly strict, with only one member of each household allowed to leave their home every two days for needed supplies. It was also accompanied by an effective and efficient national contact tracing program.
Today, Chinese factories are operating above capacity, Kai-Fu Lee, CEO of Sinovation Ventures, told Axios from Beijing. They are compensating for pandemic-related manufacturing capacity reductions in the rest of the world, as well as the period during which they were closed earlier this year.
The bottom line: China has never been stronger. He now anchors the RCEP, the world’s largest free trade zone, while buying influence in the rest of the world through his Belt and Road initiative.
- It will take all of Biden’s charm and diplomatic acumen to be able to put together a coalition that can coerce China — or even just nudge it in a direction more favorable to the United States.