U.S.-China relations have already deteriorated before the Russian invasion of Ukraine. But Beijing’s chance to rebuild its relationship with Washington is even more fragile as world powers watch its attitude to Moscow over the conflict.

On May 5, the official media of the Chinese government Phoenix.com column program released the speech of Xue Lan, the Dean of Schwarzman Scholars at Tsinghua University and professor of Tsinghua School of Public Administration.

Xue Lan highlighted five major headwinds that Beijing will face in the future.

He said the biggest challenge is U.S.-China ties. The second is the issue of population decline and aging. The third is the security of energy, food, and financial debt. The fourth is the income distribution gap. And the fifth is the pressure to reduce gas emissions.

On the relationship between Beijing and Washington, he believes that China must get ready for the decoupling from the number one world economy.

The COVID-19 pandemic has pushed a change in the global economic pattern. Countries are realizing that they cannot rely on others for supplies. Denouncing China’s influence is becoming more common. The trade war has also woken nations up about China’s industrial chain.

To avoid decoupling, China would need to boost the construction of industrial chains and supply chains. Still, Xue believes applying these types of policies will, in turn, risk making decoupling a reality.

Li Yuanhua, an Australian historian and current political analyst, told Chinese media Da Ji Yuan that Xue’s speech shows Beijing is loosening its tone toward the U.S. One reason is that Xue, an expert from the Chinese government, made those comments.

One other reason is that the U.S.-China relations topic has been recently mentioned by the Chinese ambassador to the United States, Qin Gang. In an interview with Forbes, he said, “our economies are highly complimentary.”

Li believes that the statements made by Qin Gang and Xue Lan should be related to the deterrent power of the AXIS Act recently passed by the U.S. House of Representatives.

The bill, which has Xi Jinping’s name on it, requires the U.S. State Department to monitor China’s support for Russia’s invasion of Ukraine. While the legislation is still pending the Senate vote, Beijing is subjected to “swift and stringent” sanctions stipulated by the Act.

According to the Financial Times, on April 22, sources said that Yi Huiman, chairman of the China Securities Regulatory Commission, asked officials from local and overseas banks “what could be done to protect the nation’s overseas assets, especially its US 3.2 trillion dollars in foreign reserves.”

Li Zhengxiu, a military expert and associate researcher of the Taiwan National Policy Research Foundation, said that the U.S. is currently the biggest headache for China to achieve its number one world power goal in 2049.

Li suggested that the Trump administration has particularly challenged that ambition. The former president had sought to contain China through multiple warfares, from economic and trade to technological, and financial warfare.

About Xue Lan’s comments on salvaging the U.S.-China ties, Li viewed that the Chinese government is only trying to export its ideologies to the international community. But it may be much harder to achieve so, especially now that Western powers have lost trust in China’s political system.

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