“Against the backdrop of all the noise of disintegration and deglobalization, somewhat unexpectedly, the pandemic has deepened ties between China and the rest of the world,” wrote Larry Hu, chief Chinese economist for Macquarie Capital, in research report.
“After recovering from its own Covid-19 crisis, China was open to business when the pandemic sparked huge demand in the United States (and other countries) for Covid-19-related goods,” Quays said.
Meanwhile, China’s trade relations with the United States have become even more unbalanced: Beijing’s trade surplus with Washington has grown to $ 317 billion in 2020, up 7% from the previous year and the second highest in history, according to Iris. Pang, Chief Economist for Greater China at ING. That’s only $ 7 billion from 2018 levels, when Trump launched a bubble trade war to fix what he called a bilateral link to the world’s second-largest economy.
“Judging by the increase in US imports from China in 2020, it seems fair to say that Trump’s trade war with the country has failed,” Kuijs said.
“Like [China] it plays a critical role in many supply chains and remains, in principle, a very competitive place to produce, much easier said than done to “separate” from it, “Quays said.
However, China’s future is not without challenges. Analysts say President-elect Joe Biden is unlikely to change some of the pressure on the country after taking office next week.
“The Biden government will take a different, less belligerent and more stable approach to China,” Quays said. “But it is not politically possible for Biden to eliminate tariffs on Chinese goods soon.”