Advertisement
Opinion | Why China holds the advantage over America even amid deglobalisation
- Populous countries will outpace smaller ones in innovation – even the richer ones – if barriers to migration grow high enough
- If China makes the most of this, the US will find it all but impossible to hamper its economic progress
Reading Time:3 minutes
Why you can trust SCMP
80
In just four decades, China’s economy has achieved an unprecedented level of wealth and development, and, until recently, its upwards trajectory of economic growth and prosperity seemed set to continue.
Advertisement
But as political pressures and the coronavirus push many countries – particularly the United States – to embrace more nationalist policies, the heyday of globalisation could soon be replaced by a post-pandemic era shaped by national security concerns and border controls.
This is not good news for China, which would prefer that the world maintain the economic openness it achieved in recent decades. For that reason, China had been working hard to align its economic and trade activities with international rules and norms. But now it seems that China must prepare for a future characterised by higher trade barriers and restrictions.
To this end, China’s 14th five-year plan makes clear that the country will seek to reduce its dependence on external demand. The dual circulation strategy announced in the plan instead emphasises reliance on the country’s huge population.
China also plans to invest heavily in cutting-edge sectors, such as artificial intelligence and semiconductors, and work to achieve self-sufficiency in core technologies.
Outsiders are deeply suspicious of China’s moves to increase state control over its economic development, such as imposing new regulations on tech companies and capital markets.
Advertisement