Discussing Biden's Potential China Policy

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AndrewS

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That's because you only read the headline and not analyzed the strategic moves such as RCEP and CAI.

One's all bark and goes around cussing everyone else out and shooting his own foot, the other don't give a shit and methodically plot its own rise.

While China is weaker than the US, it is still multitudes stronger than #3 and #4 put together.

If you restrict the AO to East Asia, China is largely parity with the US and in some domains far stronger.

Without giving too much away, I actually work in policy, on the banks of the Potomac, currently into my second decade as a commissioned officer.

A question.

What is the prevailing view on whether China will have an economy which is twice the size of the USA by 2030-2035?

This has been outlined in the Australian Government planning white papers.
 

siegecrossbow

General
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A question.

What is the prevailing view on whether China will have an economy which is twice the size of the USA by 2030-2035?

This has been outlined in the Australian Government planning white papers.

Personally I think no friggin way barring something catastrophic happening, which I don’t foresee either.
 

caudaceus

Senior Member
Registered Member
That's because you only read the headline and not analyzed the strategic moves such as RCEP and CAI.

One's all bark and goes around cussing everyone else out and shooting his own foot, the other don't give a shit and methodically plot its own rise.

While China is weaker than the US, it is still multitudes stronger than #3 and #4 put together.

If you restrict the AO to East Asia, China is largely parity with the US and in some domains far stronger.

Without giving too much away, I actually work in policy, on the banks of the Potomac, currently into my second decade as a commissioned officer.

Yeah I heard the term.
Free mass media or even a few paid ones are full of soundbites and frequently lack in-depth strategy comprehension, reflection and broad eyes view.

If you want to know the granular details, you need to subscribe to paid trade journals or something similar which can cost up to ten thousand dollars.
 

caudaceus

Senior Member
Registered Member
Personally I think no friggin way barring something catastrophic happening, which I don’t foresee either.
It's the PPP I think. Currently in PPP China is about 20% larger than US, so double the size in 15 years is not impossible.
However, I read a few comments from Pettis and MacroPolo that said China will reduce the emphasis on GDP growths, so the growths in the future will not be big.

The opportunity, however, is that the world economies I think are on the mass leveraging mode in which major economies presently reduce the interest rate close to zero, so helicopter monies everywhere. China in contrast maintains a relatively high-interest rate, so we can expect FDI and capital to start flowing into China if not already and hopefully strengthen the Yuan. It's an opportunity for China to intensify the consumption rebalance riding on the strong Yuan.
 

steel21

Junior Member
Registered Member
What is the prevailing view on whether China will have an economy which is twice the size of the USA by 2030-2035?

This has been outlined in the Australian Government planning white papers.
I think if you go by PPP, then there is a better than 65% probability that 2X US economic size can happen.

There are 3 major factors here:

1. China climbing up the value chain: Probability 100%, since we are already seeing it happen in real time. Everything from NIO, Xpev, Hongqi, Ehang and SOLO to Huawei and DJI.

2. The increase purchasing power of the RMB vs. the USB and the compounding effects of capital: Probability 75%.+ If you read Macropolo.org's detail analysis of the 14th 5 year plan
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, you can see that attracting foreign investment and increasing domestic Chinese consumption is a distinct goal of this plan. The 14th plan will lay the ground work for the evolutionary plans to come. So as long as they can make this 5 year plan work, everything else will fall into place. It is the perfect window in terms of crossing from the internet 2.0 phase to the comprehensive IOT phase of modernization. Can they do it?

- Their closest competitor, the United States, will need until at least Q3 2023 to get back to 2019 state of normalcy. Don't take my word for it, take it from McKinsey's
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.
We/USA are on a B2 trendline in terms of recovery, the charts are on page 66.
- China has laid all the ground work in terms of 5G and national confidence (boosted by COVID-19), necessary for execution.
- No one else has the scale nor the comprehensive planning and execution capability and authority to out compete them.

So yea, I think they will pull off the 14th year plan. And with that, it will set everything into motion, such as devaluing of the USD, and decreased US competitiveness.

3. Precipitous US decline: Probability 50%+ US is in the shit right now. The politics are not going to help.

It could play out as follows. Note, China significantly undercount its GDP, it real nominal GDP is probably somewhere around $17T, and not the $14T it claims. Likewise, I think US GDP is a bit bloated, and likely around $18T, boasted by over inflated legal and medical service "productivity".


YearUSAChina
2020​
20​
14​
2021​
19.4​
15.12​
2022​
18.818​
16.0272​
2023​
18.25346​
16.98883​
2024​
18.61853​
18.00816​
2025​
18.9909​
19.08865​
2026​
19.37072​
19.8522​
2027​
19.75813​
20.64629​
2028​
20.15329​
21.47214​
2029​
20.55636​
22.33102​
2030​
20.96749​
23.22426​
2031​
21.38684​
24.15323​
2032​
21.81457​
25.11936​
2033​
22.25087​
26.12414​
2034​
22.69588​
27.1691​
2035​
23.1498​
28.25587​
USA: I applied a modest 3% GDP decrease until 2024. Then a highly aggressive 2% increase from 2024 to 2035
China: I applied an 8% increase to 2021, then 6% from 2022 to 2025. Then a 4% increase from 2026 to 2035

A more aggressive scenario could be:
YearUSAChina
2020​
20​
17​
2021​
19​
18.7​
2022​
18.43​
20.196​
2023​
17.8771​
21.81168​
2024​
18.05587​
23.12038​
2025​
18.23643​
24.5076​
2026​
18.41879​
25.73298​
2027​
18.60298​
27.01963​
2028​
18.78901​
28.10042​
2029​
18.9769​
29.22444​
2030​
19.16667​
30.39341​
2031​
19.35834​
31.60915​
2032​
19.55192​
32.87351​
2033​
19.74744​
34.18846​
2034​
19.94491​
35.55599​
2035​
20.14436​
36.97823​
Again, not quite 2X, but certainly not impossible. Toss in a 30% devaluation of USD to RMB exchange rate, and that 65% quickly becomes closer to 85%.

The only thing that could fuck up the Chinese is a war in Taiwan. But they are not that stupid. They could apply financial sanction to the island after they have reach technological parity in semiconductors, then just wait until Uncle Sam is exhausted, then come and mop up after 2035.

On the other hand, there are shitloads of factors that can trip up US, such as:
- COVID containment and return to normalcy,
- domestic unrest and terrorism
- political gridlock
- another Trump
- tax revenue shortage in its major urban centers
- increase cost of deficit spending
- USD devaluation
- Euro and RMB gaining up to bypass SWIFT
 

steel21

Junior Member
Registered Member
Yeah I heard the term.
Free mass media or even a few paid ones are full of soundbites and frequently lack in-depth strategy comprehension, reflection and broad eyes view.

If you want to know the granular details, you need to subscribe to paid trade journals or something similar which can cost up to ten thousand dollars.
Or get yourself into a job that needs that kind of info. Go work for the IC or a major investment bank.
 

Gatekeeper

Brigadier
Registered Member
That's because you only read the headline and not analyzed the strategic moves such as RCEP and CAI.

One's all bark and goes around cussing everyone else out and shooting his own foot, the other don't give a shit and methodically plot its own rise.

While China is weaker than the US, it is still multitudes stronger than #3 and #4 put together.

If you restrict the AO to East Asia, China is largely parity with the US and in some domains far stronger.

Without giving too much away, I actually work in policy, on the banks of the Potomac, currently into my second decade as a commissioned officer.

I would be very very careful if I was you. There can't be that many Chinese American officer working in the Potomac (That's assuming you're Chinese of course).

Any case take care. Particular with so many red-necks serving in the armed forces.
 

AndrewS

Brigadier
Registered Member
Op-Ed: Xi is positioning China as the world’s indispensable economy — and Biden’s greatest challenge
PUBLISHED SUN, JAN 24 20218:00 AM EST

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It’s now Biden’s America, but whose world will it be?

Expect China’s President Xi Jinping to answer that question unequivocally on Monday with his keynote at the World Economic Forum’s first global virtual meeting. It will leave little doubt that managing relations with China will be both President Joe Biden’s most immediate and most defining foreign policy challenge.

It’s hard to imagine more dramatic timing for Xi’s “special address,” coming in the wake of Biden’s inaugural, Trump’s second impeachment and the Capitol insurrection that prompted it.

Whatever words Xi chooses, his message will be clear: this is China’s historic moment. With modifications for global listeners, it will echo the theme he delivered a few days ago to a gathering of provincial and ministerial level officials at the Communist party school.

“The world is undergoing profound changes unseen in a century,” Xi said, kicking off a celebration-strewn hundredth anniversary year of the Chinese Communist Party’s creation. He declared that the “time and situation” had turned in China’s favor. “This is where our determination and confidence are coming from.”

In a relieved Washington this week, all eyes were on President Biden. He sounded his determination to heal and unify the United States, and he announced his audacious move to unleash the U.S. economy with a $1.9 trillion Covid relief package, and infrastructure spending bills to follow. Internationally, Biden’s focus will be on rallying democratic partners and allies to counter China’s authoritarian gambits.

Yet 2021 may instead be more the year of Xi Jinping than of Joe Biden. The Chinese leader is leveraging the centennial of his Communist Party and China’s emergence as the first major economy to return to growth after Covid-19 to strengthen his individual authority, to tighten the party’s unrivalled control, and to accelerate China’s rise and increased global influence through new investment and trade deals.

At the same time, Xi is laying the ground work for the 20th Party Congress in the second half of 2022, which could formally seal his long-term tenure as China’s paramount leader. Along the way, he has been crushing dissent and rivals, reigning in the country’s biggest private businesses starting with Jack Ma, and deploying digital and surveillance methods to assert control in a manner that he hopes will be more enduring, efficient, productive and less violent than that of Mao Tse-tung.

The world won’t like all of what it sees, but Chinese officials are drawing the comparison of their economic resilience and political stability in 2020 with the dramatic dysfunctions of American democracy and the reality that the pathogen China unleashed has been far less effectively managed, and thus far more damaging, in the United States.

China drove home that narrative through this week’s announcement that the country achieved 2.3% GDP growth in 2020, far outperforming an expected U.S. decline of 3.6 %, a European Union downturn of 7.4% and a global economic pullback of 4.3%. For the first time ever, China passed the United States as Europe’s leading trading partner through the first eleven months of last year.

Most challenging for President Biden is that China has taken a series of pre-emptive steps through trade and investment deals that will complicate his efforts to reinvigorate Asian and European alliances and partnerships. These will be difficult to counter due to his Democratic Party’s reluctance to negotiate new trade arrangements and the detritus of President Trump’s punitive tariffs and sanctions.

Shortly after Biden’s election in November, China signed the Regional Comprehensive Economic Partnership (RCEP) with 14 other Asia countries. Then in December, Beijing offered surprise concessions to break a negotiating deadlock and close an investment agreement with the European Union shortly before Biden’s inauguration.

To ensure the significance of the deal wasn’t missed, Chinese Foreign Minister Wang Yi at a lunch for EU ambassadors praised this demonstration of Europe’s “strategic autonomy.”

President Xi even has expressed interest in joining the higher value Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade liberalization pact among Canada and ten Asian-Pacific Countries that the United Kingdom is applying to join. The U.S. continues to suffer from Trump’s withdrawal from negotiations that created that agreement during the first days of his presidency.

Xi’s underlying message: the U.S. may once have been what former Secretary of State Madeleine Albright called “the indispensable nation,” but China now has become “the indispensable economy.”

President Biden’s opportunity is that Xi may overplay his hand internationally through bullying and at home through an over-concentration of power. His crackdown on private business will render his economy less productive. And history is littered with examples that excessive authoritarianism is ultimately unsustainable.

The Biden administration approach to the China challenge seems to be one of urgent patience, leading with the reinvigoration of the U.S. economy and the prioritization of alliances and partnerships.

For deeper insights, it’s worth reading the impressive recent body of work by Kurt Campbell, who President Biden has brought into the White House as his right hand on China and Asia matters. Campbell sees the need to rise to the China challenge as “a rare area susceptible to bipartisan consensus” that can be leveraged to steer a path away from U.S. decline.

With co-author Rush Doshi in Foreign Affairs, Campbell wrote in December: “Meeting this challenge requires the kinds of reinvestments in American competitiveness and innovation that are also critical to domestic renewal and working class prosperity. Policy makers should link these two agendas, not to amplify American anxieties but to make clear that accomplishing the country’s most important domestic tasks will also have salutary effects abroad.”

As Biden’s presidency enters its first 100 days, he can’t take his eyes off President Xi’s efforts to leverage the anniversary of the first 100 years of the Communist Party’s power. Biden faces a wide array of international challenges, but this contest will be the one that will define his place in history—and whether democracy or authoritarianism will be the ascendant system for the future.
 
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