What Will the U.S.-China Relationship Look Like in the Biden Era?

SourceHarvard Business Review
SectorEconomy
CountryMiddle east

The sight of Hangzhou’s railway station packed to the rafters during China’s Golden Week holidays in early October was a powerful symbol of the country’s swift recovery from Covid-19. With mobility restrictions long lifted, more than 600 million Chinese crisscrossed the country to visit family and friends — providing an important boost to domestic consumption in the process. The difference with the U.S. is stark: While in China, the virus has been virtually stamped out and economic activity continues to gain steam, many U.S.

states are reintroducing social distancing restrictions as they grapple with surging caseloads. To some, this gives credence to China’s goal of replacing the U.S. as the world’s major economic power. Our projections show China continuing to whittle away the U.S.’ economic lead over the next five years. But this isn’t a given: Structural problems persist in areas such as overcapacity in industry, elevated debt levels, and inequality. What’s more, years of tensions with Trump have hurt external competitiveness, while China’s aggressive foreign policy is generating increasing international pushback. How the Biden administration handles the U.S. relationship with China will be not just crucial to Biden’s presidency, but one of the defining themes of his time in ...read more...