In her latest post, my colleague, Liz Economy, asks: What will Vice President Biden find in China? I thought I’d try out my own response to this very direct question:
1. Biden will find a China whose rise depends on economic growth but whose growth model is no longer sustainable.
Bluntly put, China’s leaders know that their capital-intensive, export-oriented approach is delivering diminishing returns and threatens to become a major political vulnerability for the government. The global economic crisis provided clear evidence that China’s export-driven economy is vulnerable to dips in demand in the rest of the world. Meanwhile, its dependence on investment has introduced distortions and imbalances into the Chinese economy.
Why should this matter to Biden and the United States?