Xi positions China because the world’s indispensable financial system

A report of Chinese President Xi Jinping’s New Years Eve speech will be shown on a public screen in Hong Kong, China on Thursday December 31, 2020.

Bloomberg | Bloomberg | Getty Images

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

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

It is hard to imagine that Xi’s “special address” would be more dramatic after Biden’s inauguration, Trump’s second impeachment, and the Capitol uprising that sparked 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 brought a few days ago to a gathering of provincial and ministerial officials at the Communist Party school.

“The world is undergoing profound changes that have not been seen in a century,” said Xi, ushering in a festive centenary of the founding of the Chinese Communist Party. He said that “the time and situation” has turned in China’s favor. “This is where our determination and confidence come from.”

In a relieved Washington this week, all eyes were on President Biden. Determined to heal and unite the United States, he announced his bold move to kickstart the U.S. economy with a $ 1.9 trillion Covid bailout package and subsequent infrastructure spending . Internationally, Biden will focus on rallying democratic partners and allies to counter China’s authoritarian moves.

But 2021 could be the year of Xi Jinping rather than Joe Biden. The Chinese leader is taking advantage of the Communist Party’s 100th anniversary and China’s rise as the first major economy to return to growth after Covid-19 to strengthen individual authority, tighten the party’s unrivaled control, and China’s rise and increasingly global Influence to accelerate new investment and trade agreements.

United States President Joe Biden and First Lady Jill Biden wave as they arrive at the North Portico of the White House in Washington DC on January 20, 2021.

Alex Brandon | Pool | Reuters

At the same time, Xi is laying the foundation stone for the 20th party congress in the second half of 2022, which could formally seal his long-term tenure as China’s top leader. Along the way, he’s put down dissent and rivals, starting with Jack Ma ruling the country’s largest private corporations, employing digital and surveillance methods to enforce control in ways he hopes will be more permanent, efficient, productive and more is less violent than Mao Tse-tung’s.

The world won’t like everything it sees, but Chinese officials are comparing their economic resilience and political stability in 2020 to the dramatic dysfunction of American democracy and the fact that the pathogen brought about by China was handled far less effectively. and thus far more harmful in the United States.

China significantly outperformed that narrative by announcing this week that the country had a GDP growth of 2.3% in 2020, an expected US decline of 3.6%, a European Union downturn of 7, 4% and a global economic retreat of 4.3%. For the first time, China overtook the USA as Europe’s leading trading partner in the first eleven months of last year.

The biggest challenge facing President Biden is that China has taken a number of preventive steps through trade and investment deals that will complicate its efforts to revive Asian and European alliances and partnerships. This will be hard to counter as his Democratic Party is unwilling to negotiate new trade deals and President Trump’s punitive tariffs and sanctions will be hurt.

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

To ensure that the importance of the agreement was not overlooked, Chinese Foreign Minister Wang Yi praised this demonstration of Europe’s “strategic autonomy” at a lunch for EU ambassadors.

President Xi has even expressed an interest in joining the higher-quality, comprehensive and progressive Trans-Pacific Partnership Agreement (CPTPP), a trade liberalization pact between Canada and ten Asia-Pacific countries that the UK is applying to join. The US continues to suffer from Trump’s withdrawal from the negotiations that created this deal in the early days of his presidency.

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

President Biden’s chance is that Xi will cover his hand internationally through bullying and at home through an overconcentration of power. His crackdown on private companies will make his economy less productive. And history is littered with examples that excessive authoritarianism is ultimately unsustainable.

The Biden administration’s approach to addressing the China challenge appears to be an urgent patience leading to the revitalization of the US economy and the prioritization of alliances and partnerships.

For deeper insights, it is worth reading the impressive work by Kurt Campbell, which President Biden brought to the White House as his right-hand man on China and Asia. Campbell sees the need to face the China challenge as “a rare area prone to bipartisan consensus” that can be used to steer a path away from US decline.

With co-author Rush Doshi in Foreign Affairs, Campbell wrote in December: “Meeting this challenge requires reinvestment in American competitiveness and innovation, which are also vital to domestic renewal and working class prosperity. The Policy makers should not combine these two agendas to heighten American fears, but to make it clear that the fulfillment of the country’s key domestic missions will have beneficial effects abroad. “

As Biden’s presidency enters its first 100 days, he can’t lose sight of President Xi’s efforts to mark the anniversary of the first 100 years of Communist Party’s power. Biden faces a variety of international challenges, but this competition will determine its place in history – and whether democracy or authoritarianism will be the ascending system for the future.

Frederick Kempe is a best-selling author, award-winning journalist, and President and CEO of the Atlantic Council, one of the United States’ most influential think tanks on global affairs. He worked for the Wall Street Journal for more than 25 years as a foreign correspondent, assistant editor-in-chief and senior editor for the European edition of the newspaper. His latest book – “Berlin 1961: Kennedy, Khrushchev, and the Most Dangerous Place on Earth” – was a New York Times best seller and has been published in more than a dozen languages. Follow him on Twitter @FredKempe and subscribe here to Inflection Points, his view every Saturday of the top stories and trends of the past week.

More information from CNBC staff can be found here @ CNBCopinion on twitter.

Comments are closed.