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US and China - What lies ahead now
Read more on - Polity | Economy | Schemes | S&T | Environment
- Candidate Biden and President Biden: That China posed a major threat to the US was not a notion promoted by Biden as a candidate, but as US President Joe Biden is now preparing the country for a long-term competition with China. He pitched Congress an economic recovery package that includes huge investments in infrastructure, job creation, and manufacturing as a bulwark against Chinese advances in transportation and technology.
- The real question: Greater investment in the US's economic foundation is long overdue and would likely strengthen the middle class—one of Biden’s top campaign pledges. But it’s not clear that it will produce the winning ticket in a strategic competition with China, which drives top-down industrial policy across a broad array of sectors through state-managed firms. Washington’s battle with Beijing is not one of investment or even innovation — it is one of conviction and values.
- Allies wanted: Biden has sought to enlist U.S. allies in Europe and Asia to the competition, pledging to renew the United States’ “enduring advantages” over China. Chief among them: revitalizing the United States’ alliances and recommitting to its democratic values at home while defending them abroad. Those values had, for many decades, helped make the United States a uniquely powerful nation.
- History: US emerged from World War II with military and economic dominance but turned that overwhelming might into a largely benevolent international order. Instead of occupying its enemies, as the Soviet Union did, the United States rebuilt its wartime foes in its own image. US pushed ideals like the commitment to freedom, democracy, and the rule of law. Today, in 2021, the U.S. Constitution, rule of law, and the very idea of free elections are under assault by its fellow citizens!
- What's happening globally: Public satisfaction in those democratic values is wavering globally. Free societies are being challenged by populist forces on both sides of the Atlantic Ocean; the U.S. Capitol itself was violently assaulted by a mob incited by former President Donald Trump in a bid to overturn Biden’s election victory. The US commitment to racial equality has faltered, and capitalism is losing its appeal. Unlike the Cold War, today’s great-power competition isn’t a contest of competing ideologies. Leaders like Chinese President Xi Jinping and Russian President Vladimir Putin are not exporting communism or values of any kind; they have a nationalist vision, greased by corruption and coercion, to fuel their hegemonic ambitions. China does systematic theft of intellectual property, and uses state subsidies to undercut competition. This is economic abuse and coercion.
- The future: To compete with China, what the US needs to do is shore up those foundations. China’s explosive growth in low-cost manufacturing ultimately did so much to undermine U.S. industrial competitiveness and fueled an anti-globalization backlash that helped drive Trump-based populism. When countries like China took advantage of lax labor standards and negligible environmental oversight, the US essentially exported jobs and imported workers’ misery. So now, if the US mandates that products made abroad used a more sustainable supply chain, then U.S.-made products would become more competitive.
- Innovation engine: Similarly, when it comes to innovation, the United States can and should rediscover the openness that defined its entrepreneurial past. Instead of shunning foreign students, as Trump did, US could welcome them, and then let them stay after they complete their studies. Take China’s Belt and Road initiative, an ambitious effort to export its excess manufacturing capacity to boost its economic and political influence through checkbook diplomacy in Asia, Africa, and Europe. U.S. is rightly concerned about Chinese “debt-trap diplomacy,” where Beijing uses big debts to extract bigger political concessions. To battle it, a new development model must be proposed.
- New technologies: Same is true for 5G mobile telephones like artificial intelligence, cyber technologies, or biotech. Secretary of State Antony Blinken sees the world as a battle between “techno-democracies” and “techno-autocracies.” He and the President now want a “league of democracies” to shape the norms of behavior in cyberspace, artificial intelligence, and biotechnology. Biden wants technology to be “used to lift people up, not used to pin them down.”
- Summary: President Biden had said that US should “lead not merely by the example of our power but by the power of our example.” Time to see if it happens or not. For emerging economies like India, many choices lie ahead, given its own political transformation currently underway.
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