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Foreign Policy

A Global Time of Crisis

Nov 22, 2022
  • Zhao Minghao

    Professor, Institute of International Studies, Fudan University, and China Forum Expert.


Chinese President Xi Jinping and his U.S. counterpart Joe Biden met recently in Bali, Indonesia, and signaled that both sides are committed to managing disputes. The world is now in a time of crisis because of multiple entangled factors, notably the economic recession and geopolitical conflicts. A stable China-U.S. relationship and any improvements made serve the interests of both the Chinese and American people and live up to the expectations of the international community.

The meeting took place on the sidelines of the G20 summit, where leaders of the world’s major economies gathered to seek ways to “recover together, recover stronger.” There is no doubt that the U.S., China and other major global powers are facing massive economic challenges. Economist Nouriel Roubini, who correctly predicted the 2008 financial crisis, sees a “long and ugly” recession ahead and says that new systemic risks in the global economy cannot be avoided.

The International Monetary Fund warned in October: “The worst is yet to come, and for many people 2023 will feel like a recession.”

According to the IMF, the economies of countries accounting for one-third of the global economy are expected to contract this year or next, and global economic growth will slow to 2.7 percent in 2023. Business tycoons such as Amazon founder Jeff Bezos cautioned that consumers and businesses should make preparations for an economic winter.

In particular, many developing countries and emerging economies are blighted by severe economic and fiscal difficulties, and the U.S. Federal Reserve’s interest rate hikes add more fuel to the fire. According to the Institute of International Finance, debt in 31 emerging economies totaled $98.8 trillion as of June 2022, 2.5 times their collective GDP. Last year, global debt soared to a record $303 trillion. The debt crisis is dragging down Pakistan, Sri Lanka and several other developing nations, which will bring more challenges in food and energy security and even give rise to political and social turmoil, along with humanitarian crises.

The crisis with which the world economy is currently confronted is closely knit with current geopolitical conflicts. The Ukraine crisis, which broke out earlier this year and has yet to show any sign of peaceful settlement, has further strained the global security situation. In its ripple effects, arms races and nuclear conflicts are casting a shadow on human society, with fluctuations rolling across the markets of food, energy and other commodities. Further, strategic trust between major powers are significantly impaired. A slate of international governance mechanisms, such as the UN and the G20, are at risk of being riven and crippled. The global effort to construct international rules on the weaponization of artificial intelligence, space security, cybersecurity and other thorny issues is stalled. Meanwhile, more loopholes are appearing in the nuclear non-proliferation regime.

As the global population now exceeds 8 billion, human society is facing unprecedented challenges and stands at a crossroads. Under these circumstances, it is indispensable that the U.S. and China, the world’s largest and second-largest economies, get their relations back onto a healthy and stable trajectory. The two powers should not waste time in the crisis. They should draw wisdom from major diplomatic cases in history, take a more responsible attitude to avoid falling into direct conflict and work together to tackle transnational challenges.

Nonetheless, both nations have multiple hurdles standing in the way of this goal. As Washington escalates strategic competition with Beijing, both sides will face considerable downward pressure in their future ties. Just before China’s 20th Communist Party Congress, the Biden administration published its first formal National Security Strategy, which underlines China as America’s “most consequential geopolitical challenge.” The White House has reiterated on various occasions that the U.S. is entering a “decisive decade” in its rivalry with China. All this seems to say that the worst moment in China-U.S. ties has yet to come. Washington is likely to up its pressure on Beijing in the economic, technological and military realms and enter a more vehement feud with Beijing over the Taiwan question.

China is caught in a dilemma: It has to deal with “multiple Americas.” The Biden administration is only an America of the White House. Republicans in Congress, represented by the likes of Kevin McCarthy, are rattling their sabers. They are expected to take a series of legislative actions against China, including further investigation of the origins of the COVID-19 pandemic, intensifying the “tech cold war” and beefing up military assistance to Taiwan. A number of Democrats in Congress are calling for tougher China policies, too.

It can be seen from the recently concluded midterm elections that local U.S. governments are more adept at playing with the so-called China threat. China appeared in hundreds of political campaign ads, and some candidates used their competitors’ connections with China as a strategy to get elected.

Besides the “America of the White House” and the “America of the Congress” there is another America — the American society. China-bashing politicians in the U.S. have affected American public opinion. In turn, negative opinions of China offer a kind of incentive — or motivation — for these politicians to formulate more hawkish China policies. In this way, a vicious cycle has taken shape. The number of Americans who have unfavorable views of China increased six points over 2021 to 82 percent, hitting a new high, according to a poll released by the Pew Research Center in April. It was just 47 percent back in 2017.

All in all, the Xi-Biden meeting in Bali may be seen as the first step in restoring bilateral ties. Both sides came to a better understanding of each other’s red lines with respect to Taiwan, which is crucial in avoiding a military conflict. In the meantime, Beijing and Washington will resume dialogues on the economy, finance and climate change, in addition to working out guiding principles aimed at maintaining long-term, stable bilateral relations.

However, China-U.S. strategic competition is gradually “internalizing,” with obstacles for both sides and huge trust deficits. The global time of crisis provides a rare window of opportunity for the two countries to remedy their frayed ties, but the key is that they should learn to handle their internal tensions. 

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