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At 09:58 on February 7, the official account of Tencent Finance.
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According to historical experience, the United States may enter a more "introverted" protectionist period. The Biden administration's emphasis on all-round competition with China may lead to "idling" of the international economic mechanism. Many people's expectations that Biden's government can return to a free and open economic and trade policy may fail.
Text/Wang Yong (Professor, Peking University Institute of International Relations, Director, American Studies Center, Peking University)
Shortly after Biden's administration came to power, its domestic and foreign policies have not yet been finalized. Some countries, especially European countries, have high hopes for the United States under Biden, hoping that the United States will truly return to the road of multilateralism and continue to play a leading role under the banner of multilateralism.
However, four years after Trump took office, great changes have taken place in the United States. Although Trump has gone, the populist and protectionist sentiments and forces incited by Trump still exist. The world is still that world, but America is not that America. Some Europeans' expectations of Biden himself and his ruling team are likely to fail.
In his first foreign policy speech on February 4, Biden pointed out that "there is no clear line between diplomacy and domestic policy. Every action we take abroad must take into account the working families in America. To promote the foreign policy of serving the middle class, it is imperative to focus on the revitalization of the domestic economy. " Obviously, this principle of integration of internal affairs and diplomacy will become the guiding principle for Biden's government to handle foreign relations and international economic relations.
(US President Biden Xinhua News Agency/Midland)
First of all, great changes have taken place in Biden's own ideas and the ruling ideas of the Democratic Party.
From the Clinton administration to the Obama administration, the Democratic Party has gradually changed from a protectionist party to a party advocating free trade and open investment, and the Democratic Party has become an important force in promoting economic globalization. However, the disadvantages of American economic participation in globalization have gradually emerged, mainly because the employment scale of manufacturing industry has shrunk dramatically, and the American economy has the characteristics of internationalization, service industry and financialization. The income level of the middle and lower classes has not improved, and the gap between the rich and the poor has become more and more serious. Trump seized the opportunity to focus on the United States, constantly attacking free trade and China, and was finally elected. Trump's coming to power and four years of manipulation have changed the political ecology of the United States, and populism, economic nationalism and trade protectionism have become the leading forces. Driven by the Trump administration, the American people generally believe that free trade and economic globalization have caused the United States a big loss, and the proportion of people who support the United States to fight trade wars has increased.
In order to win the election, the Democratic Party also took over the banner of populism and protectionism. In the past, the Democratic Party supported free trade, mainly supporting the policy of large American capital expanding to the world. Now, due to the changes in the domestic public opinion environment, Biden's government advocates the so-called "middle class foreign policy." The change of political reality and concept doomed the Biden administration of the United States to implement more protectionist measures to promote the evolution of the international economic order in the direction of serving the existing interests of the United States.
Secondly, any change in the international economic order promoted by the United States will be influenced and restricted by domestic party politics.
At present, there is a phenomenon in American politics that has not been seen for decades, that is, democracy. Both parties are playing the cards of economic nationalism and trade protectionism for the sake of election interests and power status. The political polarization in the United States is becoming more and more serious. The two parties are wrestling around internal and external policies, and the relationship between the upper elite and the middle and lower classes in the United States is tense. The motivation of political polarization comes from American political system and electoral system. The focus of the two parties' consideration is not to build awareness and solve serious challenges in the United States, but to focus on the mid-term election two years later and the re-election of the president four years later.
Although the election time is the most serious period in the United States, Trump still won 74 million popular votes, which shows the division and basic tendency of American public opinion. American party politics and congressional legislative politics will restrict Biden's international economic policy in the next four years.
(The US Capitol Hill behind the fence Xinhua News Agency/Midland)
Third, after the Biden administration took office, Trump's policy of "giving priority to the United States" is likely to continue to be implemented and promote the restructuring of the global supply chain.
Trump began to use the trade war from 20 18, trying to move some production back to the United States, revitalize American manufacturing, and then reorganize the global supply chain. In 2020, the global COVID-19 epidemic gave the Trump administration a reason to ensure the safety of "public health", accelerated the restructuring of the global supply chain, and moved medical protection materials and drug production back to the United States. During the epidemic, made in China showed strong adaptability and supply capacity, which made many American politicians determined to move production back to the United States and reduce their dependence on made in China. Judging from the current situation, Biden's administration will continue the line similar to Trump's administration, and the reasons of "public health" and strategic competition with China will promote the "American priority" policy of "buying American goods" and "hiring Americans". The Biden administration's policy will look more moderate, and it may find a "package" of multilateralism and international cooperation, but its policy may be that there is no Trump-style foreign economic policy, at least in the short term, which is caused by domestic politics in the United States.
Biden's government will increase investment in innovation and high-tech industries in the name of "national security", and at the same time strengthen the localization of key raw material procurement. The United States will increase its investment in rare earth production and R&D, move relevant enterprises and technologies back to the United States, and reduce its dependence on rare earths in China. High-tech products such as chips, missiles and radars all need rare earths. Some people in Biden's administration believe that the recent outbreak of a large-scale war with China is not unthinkable, and the United States must be prepared for war. Of course, this is the worst result.
Fourth, the Biden administration may adopt a negative policy towards regional trade and economic integration.
Many people pin their hopes on Biden, hoping that he can return to the policies of the Obama administration and continue to support the United States to actively participate in and even lead the process of regional integration. Affected by campaign promises, it is difficult for Biden's government to return to CPTPP and other regional trade liberalization agreements in a short time. Biden himself made it clear that an agreement on regional trade liberalization would not be considered in the short term. We know that in the past three decades, economic globalization and regional integration have developed hand in hand. Driven by the United States, regional integration agreements often adopt higher market opening standards than WTO, thus promoting economic globalization.
Biden's temporary non-participation in regional free trade agreements will have certain geopolitical and economic consequences. In the Asia-Pacific region, the United States cannot return to CPTPP (Trans-Pacific Partnership Agreement for Comprehensive Progress), which will enable Japan, Canada, Australia and other countries to continue to play a major role, but the influence of CPTPP in world trade will be limited. At the same time, the United States basically does not consider joining the Regional Comprehensive Economic Partnership Agreement (RCEP) with lower trade openness standards, and further strengthens the intra-regional trade of major economies of ASEAN, China and Japan, thus promoting the process of intra-regional trade integration in East Asia and ultimately promoting the rise of Asian economies in the global economy. The failure of the transatlantic trade and investment agreement (TTIP) negotiations will also reduce the total trade volume between the United States and Europe, and the economies of Europe and other regions will be farther and farther away from the American economy.
The era of extensive dependence on trade with the United States may have passed, the global trade and investment pattern will be reshuffled, and more new regional centers will appear. In the recent development, we can see the trade between ASEAN and China. The trade between EU and China has surpassed that between China and the United States, and that between the United States and Europe. The inward protectionism of the United States will weaken its influence in global politics and economy and weaken its hegemonic position that has lasted for many years, and the multipolar era is coming.
(RCEP signing ceremony Xinhua News Agency/Yuetong News Agency)
Fifth, the relationship between the United States and the multilateral trading system is very uncertain.
The United States used to be the founder and leader of the multilateral trading system, but with the relative decline of the American economy and the rise of domestic protectionism, the United States is increasingly dissatisfied with the existing multilateral economic and trade rules. Americans believe that emerging economies such as China and India have benefited a lot from trade, but they are reluctant to further open their markets. In the past, the United States mainly demanded greater trade and investment liberalization, but now its policy may be more protectionist, and it continues to emphasize buying American goods and hiring Americans for local production. This is Trump's "American priority" policy and is becoming a key part of Biden's new "middle class foreign policy".
The Biden administration may not be so urgent in reshaping the global trade order. This is because they realize that it is very difficult to reach any agreement under the WTO. However, it is possible for the US government to adopt a more flexible attitude in the appointment of new judges and the director-general of the WTO dispute settlement mechanism, so as to save the reputation of the United States against multilateralism caused by the Trump administration. At the same time, Biden's administration may also increase the requirements for the reform of WTO rules and mechanisms on the basis of Trump's administration, including canceling the status of China and other countries as "developing countries" and the preferential trade treatment they enjoy, and strengthening the constraints on state-owned enterprises and industrial subsidy policies. The purpose of these reforms is to serve the interests of the United States and enhance the competitiveness of American enterprises in the global production and trade system.
In his first foreign policy speech, Biden proposed, "If we invest in ourselves and our people, if we strive to ensure that American enterprises compete and win on the global stage, and if international trade rules are not unfavorable to us, then no country on earth, whether China or any other country on earth, will protect our workers and intellectual property rights." Biden signaled that the United States should ensure that international economic and trade rules are beneficial to American enterprises and workers. In this regard, the Biden administration may be committed to promoting the transformation of existing WTO rules.
Sixth, Biden's administration may have negative resistance to the reform of the World Bank and the International Monetary Fund.
For a long time, the United States has been the main dominator of the World Bank and the International Monetary Fund. Their policies mainly reflect the economic, political and diplomatic interests of the United States and are tools of American foreign policy. Other western countries, mainly Japan and major European countries, have also enjoyed more benefits. After World War II, with the economic recovery of Japan and Europe, they gradually gained certain rights from the United States. After the global financial crisis in 2008, emerging economies such as China and India demanded the reform of multilateral economic organizations. The United States has adopted more defensive policies than open policies. As early as the Obama administration, the US Congress resisted the demands and plans to accept the share reform of the World Bank and the International Monetary Fund.
The non-cooperation of the United States ruined the reform plan, increased the dissatisfaction of emerging economies with the existing multilateral mechanism, and at the same time gave birth to the establishment of the Asian Infrastructure Investment Bank advocated by China and the new development bank with the participation of BRICS countries. These new multilateral development institutions led by emerging economies have broken the monopoly position of the United States and the West. No matter whether their self-positioning is a "supplement" to the existing multilateral economic system, there is actually a competitive relationship between the old and new mechanisms.
Take AIIB as an example. Since its establishment, all major economies in the world have participated in AIIB. Among the major economies, only the United States and Japan have not yet joined. The reason why the United States and Japan choose not to join is not because of the lack of financial funds, but because they regard emerging development and financing institutions as competition with the existing multilateral mechanisms dominated by the United States. Whether the Biden administration will adopt more open measures to expand the share ratio and voting weight of emerging economies is still unknown. However, considering the limitations of domestic politics in the United States, any open reform plan will be opposed by the US Congress.
Seventh, the Biden administration is unclear about the dollar-based international monetary system and the policies of the G-20.
At present, we have not seen the Biden administration's position on the role of the G-20. After the global financial crisis in 2008, G20 was upgraded to a summit and became the "main platform" for global macroeconomic policy coordination. After Trump came to power, this more open policy coordination platform, which embodies economic multipolarization, was ignored. Trump himself does not attach importance to this platform and does not want to be overly bound by it. Biden's administration may increase the importance that the United States attaches to the G-20 mechanism, and make it a platform for exerting American international economic leadership and binding relevant countries.
A problem that will have a great impact on the international economic order in the next few years is the proliferation of dollars. Affected by the COVID-19 epidemic, many countries have invested a lot of liquidity to maintain the normal operation of their economies. Due to the special status of the dollar, the United States has almost unlimited expansion of liquidity and desperately printed money. In addition, the debt ratio of the United States is too high, and there may be a relatively large financial bubble in the American economy, while the prices of commodities denominated in dollars in the world market may soar, thus disrupting the global economic order. In particular, the vast number of developing countries will become victims of the flood of dollar liquidity and pay for the economic adjustment of the United States. Therefore, how to guard against the risks caused by international excess liquidity, especially the flood of dollars, the financial bubble caused by excess liquidity and the new round of financial system risks may become an important topic for G20 in 20021year. Whether we can get the cooperation of the US monetary and financial authorities in this respect is still unknown. Whether the United States is willing to be bound by the multilateral coordination mechanism will be a major issue and an opportunity to test the Biden administration's international economic policy.
Eighth, the "all-round" competition between Biden administration and China will affect the trend of the international economic order and bring unstable factors to the global economy.
Restricted by domestic politics, the Biden administration regards China as an "all-round" competitor. In his first foreign policy speech on February 4th, Biden pointed out, "We will also directly meet the challenges brought by our strongest competitor, China, which come from our prosperity, security and democratic values. We will face the economic disadvantage of China; Oppose its aggressive coercive actions; Counterattack China's attacks on human rights, intellectual property rights and global governance. " The Biden administration attaches great importance to the competition from China.
Biden thinks that China is "the most serious competitor", but it is not the enemy. The possibility of a "new cold war" between Biden administration and China is much lower than that of Trump administration, but it will strengthen competition with China. For example, he proposed to hold a global "democracy summit" in an attempt to weaken the influence of China's system and ideology; We will repair our alliance with China and bind China with the international economic mechanism. Although China and the United States can get rid of the prospect of "complete decoupling" for the time being, Biden's efforts to guard against and counter China may lead to the danger of "idling" once the international economic order gets out of control.
Out of this concern, EU leaders and UN Secretary-General recently jointly called for the establishment of a "multipolar" world system. Only by establishing a truly multipolar world and relying on multilateral mechanisms can it be possible to prevent the United States, a "hegemonic" country, from harming rapidly developing competitive countries in order to maintain unipolar hegemony and adversely affecting the global economic order. Both China and the United States should realize that the United States, in particular, bears a special responsibility for global economic stability and prosperity, and the United States needs to look at China's rising strength and influence more rationally and objectively.
(A medical worker prepares to receive China COVID-19 vaccine in Ankara. Xinhua News Agency issued Mustafa Kaya)
In short, according to historical experience, the United States may enter a more "introverted" protectionist period.
Constrained by domestic protectionism, party politics and electoral politics, Biden's international economic policy will be more protectionist, continue to promote the "US priority" policy, promote the restructuring of global supply chains, and revitalize American manufacturing.
The Biden administration believes that any foreign policy should be based at home, and foreign policy cannot be "castles in the air" or built on "the beach". The United States still has the world's number one military machine and strengthens its international economic competitive position through aggressive military security posture.
At least in the short term, the United States will be cautious and negative about participating in regional trade liberalization arrangements and more open investment policies, which will inevitably weaken the influence of the United States on regional and multilateral economic systems.
The Biden administration's emphasis on all-round competition with China may lead to "idling" of the international economic mechanism. Many people's expectations that Biden's government can return to a free and open economic and trade policy may fail.