“We will bury you” was an ominous warning attributed to Soviet First Secretary Nikita Khrushchev at the height of the Cold War in 1956. Some translators claim his Russian words actually meant, “We will outlast you.” Either way, I don’t believe the old Soviet Union ever had the economic capacity to overtake the United States or dominate on the world stage; it was mainly a potent military threat. The same is true of the current Russian Federation and its de facto dictator, President Vladimir Putin.
China, on the other hand, is an entirely different challenger. Anyone who has spent time interacting with Asians, particularly Chinese, quickly discovers that they are highly intelligent, hardworking people who set goals and pursue them relentlessly. Those who belittled the Japanese in the years following World War II came to rue the day they dismissed the economic potential that nation possessed. Now it’s China that looms in the rear-view mirror and it’s moving up fast.
A December report by the UK-based Centre for Economics and Business Research (CEBR) states that China’s more effective handling of the coronavirus pandemic – fewer than 100,000 cases and less than 5,000 deaths – avoided an economic recession in 2020 and that its economy was on track for over 2% growth. Economists have known for some time that China’s gross domestic product (GDP), the world’s second largest, would eventually surpass the U.S. output. The CEBR is now predicting that will occur in 2028, years earlier than previously estimated.
Although international investment was significantly curtailed by the pandemic, the United Nations Conference on Trade and Development reported in January that for the first time in 2020, China attracted more foreign direct investment ($163 billion) than the U.S. ($134 billion). These investments in manufacturing plants and offices by foreigners in 2019 were $251 billion in the U.S. compared to $140 billion in China.
A February article in Politico details how European Union trade with China grew during 2020 and decreased with America. As a result, China replaced the U.S. as Europe’s largest trading partner, according to data by the EU’s statistics office Eurostat. Trump’s tariffs were not mentioned in this report but I have to wonder what affect they had on what was previously a much closer relationship with our allies across the Atlantic.
Trump received some bipartisan support for his effort to reform the U.S./China trade relationship and reduce America’s trade deficit with its largest supplier of imports. In July 2018, however, he launched a trade war with China and over the following 12 months, imposed tariffs on $550 billion of Chinese products. China, of course, retaliated with tariffs on $185 billion of U.S goods.
Eventually, a phase one deal was inked. But according to a Brookings Institution article by two Asia scholars, Ryan Hass and Abraham Denmark, “The ultimate results of the phase one trade deal between China and the United States — and the trade war that preceded it — have significantly hurt the American economy without solving the underlying economic concerns that the trade war was meant to resolve.”
Trump is no longer involved in setting trade policy with China and that nation is moving beyond the pandemic. A March 3 article by Bloomberg News entitled What to Watch as China Rolls Out an Economic Plan to Overtake the U.S. was referring to China’s most important political meeting of the year, which was to begin the following day.
In a speech, Premier Li Keqiang said China would target 6% GDP growth in 2021 and pledged to increase military spending to bolster the country’s defense compared to 2020. Later Chinese officials provided details on the nation’s five-year economic plan through 2025. It laid out new initiatives to expand research and development spending on cutting edge technologies like artificial intelligence, quantum computing, and semiconductors. Included were plans to provide 5G networks to 56% of the country and produce jet airplane engines. China intends to reduce its dependence on the U.S. for critical technologies and become an independent technological superpower.
A January 2020 Brookings Institution article by Duke University professor Indermit Gill predicted, “Whoever leads in artificial intelligence in 2030 will rule the world until 2100.” Former Google CEO Eric Schmidt might agree. A 750-page report published last Monday by the National Security Commission on Artificial Intelligence that he has chaired for two years concluded that China will dominate AI unless the U.S. Government invests more to continue its lead in that technology.
Last week, however, Republicans were vigorously trying to scuddle President Biden’s $1.9 trillion plan to help get control of the ongoing coronavirus pandemic and combat its crippling economic effects. Not one of them voted for this bill in either chamber, in spite of its broad support among the voters.
Why? Well, the GOP evidently believes that obstruction will help the party regain control of Congress in 2022. Even if they fail in that effort, however, Republicans will use the filibuster in an attempt to prevent Biden from making the infrastructure investments this nation desperately needs. And they will likely oppose federal spending on the research required to keep America the technological leader of the world.
I don’t believe this nation has faced a foreign threat like communist China since the early 19th Century. Republican politicians, like would-be presidential candidate Sen. Tom Cotton (Ark.), claim they want to get tougher on this Asian tiger. Well, they can start by supporting our president instead of obstructing him.