- Coronavirus and worsening US-China relations have pushed Beijing to rethink its assumptions about China’s role in the global economy.
Four decades after China opened its doors and put itself on a path to becoming the world’s factory, a pandemic has exposed how much industralized nations have grown to rely on Chinese imports, from medical equipment to factory parts and consumer goods.
To diversify its supply chains, Japan is subsidizing companies to move their factories out of China. And the two men vying to be the next American president, incumbent President Donald Trump and former Vice-President Joe Biden, have both signaled their desire to shift the US economy away from China.
China’s leadership appears to recognize this shifting landscape, and is itself looking to hedge its bets in anticipation of a world less hospitable to Chinese interests.
“The world is going through once-in-a-century changes, changes that have been accelerated by the Covid-19 pandemic,” Chinese President Xi Jinping told a group of economic advisers in August.
To address this uncertainty, Xi has since May called on the country to refocus on developing the domestic economy while boosting its global competitiveness. He calls it “dual circulation.”