Will “ChinAmerica” survive under Trump?
This column was previously published in l'Opinion on november 19th, 2024
The relative economic success of America in the short term could prevent us from seeing the two major advances made by China as a result of its predilection for the long term. These are, firstly, the way in which China has increased its lead regarding environmental transition and, secondly, the federation of the “Global South”, based on anti-American feeling.
Contrary to the unanimous view of the Western press, China sees President Trump as relatively predictable, at least in his mindset: “America first!”, from which he has never deviated. He has been no good as a real estate developer, only ever having made money on the back of his banks and suppliers. He therefore thinks of international relations as a zero-sum game, with any enrichment inevitably coming from the exploitation of the foreign “partner”. American “friendship” will now be reduced to a simple service billed at an inflated price. Forewarned is forearmed!
On the other hand, President Trump's behaviour remains unpredictable, and China will be better at adapting to it than Europe. During his real estate operations, Donald Trump has been accused and found guilty of several wrongdoings, he tears up contracts – in Paris as in Teheran – and is not afraid of furthering the “family business” with Jared… These are all typically “Chinese” characteristics, that Beijing is only too familiar with, and this will help it deal with any frequent mood changes emanating from the White House.
The “real” uncoupling that will take place during this second term of office will be in terms of economic performance. The United States will continue to boom, buoyed up by a public debt that is planned to increase by a further $7,500 billion by 2035. It will continue to maintain the level of deficit in public finances that is characteristic of a war economy _ something that has only been seen during the two world wars in the 20th century.
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Each country will have to face the problems created by the arrival of the AI revolution. These are economic problems for Beijing because it has put private capital under state control, and social problems for Washington whose technological success will bring a high degree of social inequality.
Low productivity. Chinese growth, locked into its “innovation with low productivity” model, will focus solely on subsidised industrial exports. Growth will stagnate at a point that is half the US growth rate. The best indicator of the true economic situation is not to be found in official propaganda with its predicted 5% GDP increase but in the development of government fiscal revenues, which have dropped by 2% this year up to the end of September.
The relative economic success of America in the short term could prevent us from seeing two major advances made by China, because of its predilection for the long-term. The first is the way in which China has increased its lead with regard to environmental transition, notably in solar power allied with energy storage, aimed at making the United States dependent on Beijing, particularly with regard to the electrification needed for artificial intelligence to take off.
The second victory is having managed to federate the “Global South” based on anti-American feeling that has been fostered by the fact that it has been increasingly difficult for emerging countries to get financing, having been crowded out of markets by the Americans.
This second term of office of Trump will therefore be the consecration of the existence of “ChinAmerica”. Each country will have to face the problems created by the arrival of the AI revolution. These are economic problems for Beijing since it put private capital under state control, and social problems for Washington whose technological success has brought a high degree of social inequality. These four years will provide ample opportunities for Trump to loudly voice his short-term triumphs. Looking beyond his apparent underachievement, President Xi will remain convinced that time is on his side.