China’s growth bouncing back after Covid but boycott likely to cripple dragon

It is ironical indeed that after having been responsible for unleashing the deadly coronavirus which has left a worldwide trail of death and destruction, China is now expected to overtake the US to become the world's largest economy by 2028, a good five years earlier than previously anticipated, according to a UK report.

The forecast by the London -based Centre for Economics and Business Research (CEBR) states that China's "skilful" management of Covid-19 would boost its relative growth compared to the US and Europe in coming years.

However, the study appears to have overlooked the fact that China has in the post-Covid months got isolated from the rest of the world and this is bound to hit its economic growth rate going ahead.

China’s rapid growth in the past has been fuelled by investments and technology from the US and Europe and the lucrative markets that they provided for Chinese products. However, with both the US and Europe as well as big emerging markets like India decoupling themselves from China the growth rate is bound to come down in the future.

Outgoing US President Donald Trump has kicked off a campaign to decouple the US economy from China which will cripple the dragon. He has also urged the European countries to do likewise which would further drag down the monster economy that China has built. Several big corporates such as Apple have already started moving their supply chains outside China.

Similarly, India which was a huge fast-growing market for China, and provided an alternative to the west, has started closing its doors after the aggressive Chinese military build-up on the Ladakh border. India as part the Quad alliance with the US, Japan and Australia which is also looking at setting up supply chains as an alternative to China.

The dragon stands alienated in the world order due to its concealing facts on the deadly pandemic and the military muscle flexing that it has been indulging in as part of its ambition to attain superpower status.

However, much will depend on to what extent Joe Biden, who takes over as US President next month, is willing to follow the policies of his predecessor. The UK think tank’s report in a sense is a wake-up call to the West as it reflects “the writing on the wall” based on China having gained an edge due to the pandemic.

There is, in fact, some concern over whether Joe Biden will be willing to go to the same extent as his arch political rival Donald Trump.

Japan which is an economic powerhouse and also closely affected by China’s coercive foreign policy has already voiced its concern over the dragon having Taiwan as its next target.

Japan’s deputy defence minister Yasuhide Nakayama in an interview last week to Reuters news agency said: “So far, I haven’t yet seen a clear policy or an announcement on Taiwan from Joe Biden. I would like to hear it quickly, then we can also prepare our response on Taiwan in accordance.”

During his election campaign, Biden did come out in favour of strengthening ties with Taiwan and other democratic countries. It now remains to be seen how far he is willing to go on the issue..