Andy Rothman, investment strategist at Matthews Asia, reviews what the world can learn from observing the Chinese economy and US-China relations after three quarters of a “crazy year”.
Lesson 1: Taking COVID seriously saves lives
Keeping the coronavirus under control is the key to a country’s economic recovery. There are reasons to be optimistic in China.
Lesson 2: Taking COVID seriously is key to economic recovery
With COVID largely under control, life in China has gradually returned to normal since March, and August was the sixth consecutive month with a V-shaped economic recovery.
Lesson 3: Exacerbating China’s inequality problem
The Chinese economy has recovered from COVID without the government providing any dramatic stimulus. However, the government has failed to provide an adequate social safety net for many of the people most affected by the economic impact of the coronavirus. This is likely to exacerbate the problem of income inequality in the country.
Lesson 4: Washington’s misguided approach towards China
In my view, the current US Administration’s attitude towards China is misguided and almost certain to harm rather than help the US economy. The approach is misguided in part because it fails to recognise that the engagement between the two countries has led to progress over the last 40 years.
Lesson 5: Beijing too is making significant mistakes
If the Chinese government wants global leadership that reflects its economic status, it must follow globally accepted principles, both for trade and for dealing with its own citizens.
Read the complete “Sinology” article by Andy Rothman at MatthewsAsia.com.