China | The impact of Biden’s victory on Chinese economy and the Sino-US relationship

Summary

A cautiously positive attitude might be more adoptable regarding the short-term Sino-US relation; however, for the long-term perspective, we do not have sufficient reasons so far to deny any pessimism on the bilateral relationship going forward.

Key points

• Key points:
• Regarding the bilateral relationship, the long-term tensions will persist whoever is in the White House while the key difference will be in “approach”. While Trump’s approach is likely to place more immediate pressure on China, Biden’s is seen as more predictable and comprehensive; for the short-term, a mitigation of the conflicts is indeed anticipated.
• The tariffs imposed by Trump will be held at least in the short-term, although there might be some further rounds of negotiations subject to China’s concession in financial market opening and sticking on the first-phase deal etc.
• The long-term tech war and the ongoing technology supply-chain decoupling will be long-lasting.
• Biden’s victory will mitigate the previous political uncertainties and increase the predictability and continuity of policies on China, increasing the risk appetite of Chinese financial market.
• Biden administration will enhance cooperation with China in the fields of environmental protection, global healthy security and non-proliferation of nuclear weapons, while on the other hand give more pressure on some traditional barriers such as human rights and geopolitical issues.

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