U.S. and China will remain at odds under Biden as Beijing flexes on global stage, trade expert says
The U.S. and China had been growing apart before Donald Trump became president, and that trajectory will likely continue under President Joe Biden, a trade expert told CNBC on Monday.
“Trump, in my point of view, just about made everything worse. But decoupling began before Trump, and it’s going to continue regardless of what Biden does. I don’t think he’s going to order companies to leave, but I don’t think he’s going to encourage them to stay either,” said William Reinsch, a senior advisor at the Center for Strategic and International Studies.
Trade tensions between China and the U.S. have escalated in recent years. While the two countries reached a so-called phase one trade agreement in January 2020, their differences have spilled over into technology and finance, leading to concerns that the two countries may be “decoupling.”
The term refers to a separation, rather than integration, of the world’s two largest economies in areas ranging from trade to technology.
American companies have found it more difficult to operate in China, Reinsch told CNBC’s “Street Signs Asia” as part of the Davos Agenda 2021, a virtual event organized by the World Economic Forum.
A ‘prelude’ to diplomatic negotiations
However, Li Daokui, an economics professor at the Tsinghua University in Beijing, told CNBC he was not “particularly alarmed” by the development in Taiwan.
“I believe ... (it’s) a prelude to a new round of diplomatic negotiations between ...China and U.S. So before any negotiations, you do have to make some moves to indicate ... your overall attitude,” he said, also speaking to CNBC’s “Squawk Box Asia” as part of the Davos virtual event.
China has a track record of “testing” new U.S. presidents, according to CSIS’ Reinsch, who was not speaking specifically about the developments around Taiwan.
“There’s a long history of China testing new presidents with various things — ships sailing too close together, incidents like that, to see what they do,” he said. “But I think the American response will be no less forceful than previous presidents.”
Reference: CNBC
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