Xi Jinping’s World: COVID-19 accelerates China’s rise
Tashkent, Uzbekistan (UzDaily.com) -- China’s fight against the COVID-19 pandemic has turned from a demonstrative retreat into a declaration of victory. And this is not just bragging. The latest economic data shows that the Chinese economy is the only one in the world to fully recover from the pandemic. It will show an increase of 2%, while in the US it will fall by 5%, in the eurozone by 8%, and in Britain by 10%, Spectator.co.uk (UK) reported.
According to World Bank experts, Beijing may become the largest economy in the world by 2030. China’s economy is already moving forward, while other large economies are trying to cope with the negative consequences of the pandemic and accumulate huge amounts of external debt.
Emboldened by its apparent success in fighting the pandemic, the China Communist Party began to devise new ways of economic development in order to counter the West. The party uses the term "double treatment", which is China’s unique approach to globalization. This means that Beijing is striving to create two related but different systems. One is the nationalist domestic economy, which is linked to the Made in China 2025 strategy, which will return most of the critical sectors of the economy to the state. Another is international participation, which empowers China, especially when it comes to technology.
The pandemic has reshaped the balance of world trade in such a way that China may now appear as an attractive partner for developing countries.
However, Beijing’s financial resources are less than it seems at first glance. About 90% of the funding for the One Road, One Belt initiative is not foreign direct investment, but loans from two large Chinese banks and various other organizations.
In the long term, the idea of "double treatment" - that China can simply split its domestic and international economies - is unsustainable. This will require major structural reforms. There are other problems, such as the demographic decline: from 2029, the birth rate in the PRC will decrease by 5 million annually, and the population will age rapidly.
However, the biggest obstacle is not in Beijing, but in Washington. Donald Trump’s second term, increased economic panic caused by the pandemic, and increased chaos in the world order may strengthen China’s desire for economic success. If Democrat Joe Biden wins, then he can easily join forces of skeptics to contain China.