Shape of Things to Come
An analysis of Joe Biden’s promised foreign policy to understand future Chinau. S. relations and beyond
ably explains why Biden wants to revive the middle class and create a new society where the American Dream is easier to achieve. However, this is no easy task.
When Biden became vice president in December 2008 with Barack Obama’s election as president, they spoke of rebuilding the middle class. But while they recognized the cause of the deep-rooted illness in U.S. society, the widening gap between the rich and the poor, the two struggled to come up with a cure by investing more to help the most vulnerable.
Eight years later, the middle- and low-income groups, who didn’t see globalization as being beneficial to all, voted Trump into office.
This time, instead of Trump’s “America First” strategy, Biden remains committed to promoting a middle-class economy.
Will his ambition work or not depends on the status of the U.S. and the rest of the West in the global economy. According to Biden, the United States accounts for about a quarter of the global GDP and together with other Western countries, the strength more than doubles.
But the strength of developing economies and emerging markets is growing rapidly. The falling of its share in the world economy, if continues, will make it impossible for the U.S. to lead the world or revive its middle class.
Since the West accounted for more than 70 percent of the global economy after World War II, they became buyers of products from most countries. Other economies can grow only by selling products to Western markets, with the U.S. being the most important one, and the status and value of the American dollar is hence prominent and the core of world leadership lies in the size of the market.
With a population of 1.4 billion and a middle-income population of over 400 million, China is now the world’s most promising market. Cumulative imports of goods over the next 10 years are expected to exceed $22 trillion.
Thus, the future competition between China and the United States may be decided by the country that can continue to grow its middle class and expand the market. According to the World Bank’s report on purchasing power parity (PPP) in May 2020, China’s economic aggregate, measured by PPP, surpassed that of the U.S. in 2017.
Limited cooperation
According to Biden, he will build a united front of U.S. allies and partners to shape the rule of the road on everything, from the environment to labor, trade, technology and transparency. While the U.S. needs to be tough with China over dominating the technologies and industries of the future, at the same time, it will seek to cooperate with China on issues where interests converge, such as climate change, nonproliferation of nuclear arms, and global health security.
These policies differ from the Trump administration’s, and most Western countries are likely to welcome Biden’s idea of uniting to restore Western dominance and working with China on key issues. It suggests that the new administration will resume multilateralism, but with a degree of antagonism toward China. In the meantime, the converging interests of the two countries may expand.
The Biden policy toward China may be more moderate than that of the Trump administration, but it should be noted that Biden pays more attention to the status and role of U.S. allies and will lead them to reshape international economic and trade rules. And the U.S. strategy of preventing China’s rise as a technological and industrial leader will remain unchanged.
Biden also stressed that the U.S. must strengthen its innovative edge if it is to succeed in future competition with China or any other country. Throughout U.S. history, innovation comes from two sources: sustained government investment, especially in security; and market competition, which has been the primary one since the 1980s.
Yet the liberal market is also the major cause of inequality in the U.S. today. Biden’s desire for innovation and to reduce inequality are, in fact, very much at odds with the existing U.S. system.
When the new administration is in place, the first thing to do is to deal with the legacy of chaos bequeathed by the Trump administration. Therefore, it will be hard for it to formulate perfect new policies in the short term. And if it can truly implement the middle class policy remains to be seen.
In any case, it is clear that Biden’s foreign policy toward China will at least softening the new cold war strategy that had been gaining momentum in recent years under Trump.