One of the most prominent think tanks in the United States, the Hudson Institute, held a webinar on September 9 with participants Dr. Patrick Cronin, Dr. Thomas J. Duesterberg, and Dr. John Lee. The main topic was the differences between U.S. and Chinese economies. The U.S. wants to disengage from China, And the Asian giant is paving a path for strong, harmonious ties with the economies of Eurasian countries, while seeking to distance itself from the West.
What will be the consequences of China’s economic policy?
Lee, a senior fellow at the Hudson Institute, commented that one of the most important legacies of the Trump administration was to identify the problems in the global economic system. One of the most relevant issues was recognizing Chinese Communist Party’s role in this system as the major cause of economic problems for the United States. The Biden administration also recognizes the impact of the Chinese economy America. From currency manipulation to very low interest loans, subsidies to state-owned and private enterprises, both say that the CCP is the main culprit producing some of the distorting effects in terms of America’s interaction with the global economy.
Therefore, the Biden administration continues to sanction the CCP and disengage it from the United States to achieve more independence over manufacturing and industrialization. Trump hoped that the economic sanctions would have some effect in changing the complicated web of China’s economy.
However, according to Lee, the CCP had been preparing for disengagement with the United States for a long time. The goal for the CCP was always not to have to depend on the outside world for survival, but rather to extract as much as possible from international trade and keep wealth out of China.
Because of this, Xi Jinping’s plans are not very different from those of previous leaders. Xi’s strategy is to disengage from the United States in order to concentrate the CCP’s power and dominance in the Pacific and Eurasian nations. Lee pointed out that one of the main objectives of the Belt and Road initiative is to build infrastructure, roads, railways, ports, and telecommunications networks to operate in favor of Chinese interests.
In this way, the CCP would be creating a network of “cooperation” with countries in unfavorable situations and then they would have no other option but to accept the communist regime’s coercive proposals. According to Lee, this would give rise to a new exclusive market under the CCP’s rules, the “Chinese model,” which would exclude Western nations, such as the United States.
Furthermore, the CCP’s ambitious “Made in China 2025” plan not only aims to achieve technological self-sufficiency, but also promotes total control of global supply chains so that Chinese companies can permanently dominate this market.
Another danger to the global economy, according to Lee, is China’s advance on Europe. The Belt and Road initiative is expanding rapidly, and Chinese investments in the key areas of technology, science, and cybersecurity development are also growing. Europe should be more careful and protect itself from the theft of technology, patents, and trade secrets, so commonplace in the United States.
According to Duesterberg, an expert in economics and foreign policy, the main interest of CCP policy is not economic growth, as it was for the last 30 or 40 years. China’s pretensions are focused on achieving self-sufficiency and limiting Western influence in Eurasia. Xi’s policies are different from that of Deng Xiaoping or Hu Jintao, in fact the zero COVID policy, with continuous lockdowns, are undermining Chinese growth.
In addition, Duesterberg wonders what will happen if China’s economy is weaker than it appears: Will it experience a collapse? How will the CCP finance, for example, the continued need to boost growth by investing in infrastructure and projects that have little chance?
Chinese think tank calls for more restrictions on zero COVID policy
A Chinese think tank, Anbound Research Center, published a report on its Weibo and Wechat account profiles, disagreeing with the communist regime’s zero COVID policy. “China’s economy is at risk of stagnating” due to the “impact of pandemic prevention and control policies,” the think tank said.
Anbound Research Center did not give details of possible policy changes; however, it said that Xi needed to focus on growing the economy. It noted that the U.S., Europe, and Japan were recovering economically after easing pandemic restrictions.
The think tank said in a report, “Preventing the risk of economic stagnation should be the priority task.” The report titled It is time for China to adjust its virus prevention and control policies urges senior CCP leaders to reconsider the consequences caused by the zero COVID policy before the 20th Party Congress, scheduled for October 16.
Anbound, founded in 1993, is a consulting firm that has had ties to the Communist Party’s central economic and financial leadership group and has provided research to government agencies and financial institutions for nearly 30 years.
The think tank’s report was removed from Chinese social media the day after it was published.