“The Chinese government, over the several years, has started to try and change its development model quite substantially, and COVID-19 has put these efforts on steroids,” stated Chaminade Professor Dr. Chris McNally during the opening of The Annual Dr. N.H. Paul Chung Memorial Lecture.
The lecture, presented by the Pacific Asian Management Institute and the University of Hawaii Center for Chinese Studies on September 11, consisted of a panel of experts that explored the U.S.’s relations with China. Panelists included McNally along with Professor Charles Booth from the William S. Richardson School of Law at UH Manoa, Senior Instructor Ji Chen from University of Colorado at Denver, and Emeritus Professor Stephen C. Thomas also from the University of Colorado at Denver.
The panel offered a fascinating glimpse into the intricacies and complexities that surround the U.S.’s relationship with China amidst an ongoing trade war and a tumultuous global pandemic. The hour-long discussion briefly touched on a plethora of topics, including the recent change in China’s relationship with Hong Kong, human rights, economic sustainability and development, technology infrastructure, COVID-19 and the upcoming U.S. election.
A large question loomed over whether China would surpass the U.S. as an economic leader in coming years, particularly when it comes to technology and the development of artificial intelligence. “Whether or not they will be ahead of us by 2030 is very difficult to judge,” says McNally. “How much China is able to leapfrog us, that is still really a question for the future.”
But he did concede that China’s economy had fared far better than the U.S.’s during the COVID-19 pandemic. “There is no doubt now that the Chinese have fared a lot better economically during this COVID-19 pandemic than most other large economies,” says McNally. “In terms of manufacturing, the economy has recovered very rapidly. But in terms of consumption the Chinese economy is still lagging.”
According to McNally, that is bad news for the U.S. “That basically portends some rather dire futures for us, because we look at the Chinese as having recovered much more rapidly than other economies, yet their consumption power is still lacking.” says McNally. “So for the U.S. and Europe, this means we will have real difficulties getting our consumption fully back up.”
McNally also warned of the potential long-term damage of the Trump administration’s approach to trade. “It’s not just the Chinese, it’s many other countries and industries that are looking at U.S. supplies and saying ‘Can we trust them in the future?’ and ‘Should we diversify?’” says McNally. “All you’re doing is basically incentivizing the rest of the world to try to become less dependent on the United States.”
For McNally, that could have devastating effects for the U.S. economy and threaten our position as a global economic leader. “The whole idea of decoupling is not so much the U.S. decoupling from China, it’s the rest of the world decoupling from the United States,” says McNally. “And that is not something you want to happen…you don’t even want to put that idea into people’s heads.”
As for the upcoming election, McNally says it’s anyone’s guess who the Chinese would prefer to win. “For the Chinese, another four years of Trump would mean another four years of chaos and another four years of delegitimizing the U.S., which would help China in the long term,” predicts McNally. He believes a Biden administration would mean more stability, and the Chinese value stability. “But a Biden administration is likely to rally allies and try to create a united front to face the Chinese. That would tell the Chinese they need to play by certain rules of the game.”
At the end, the panelists were each asked to give a short summary of what they wanted the biggest takeaway to be, as well as a word or phrase to end on. Most speakers sided with McNally’s political lean. Professor Booth took the opportunity to stress just how important this upcoming election was, while Ji Chen emphasized McNally’s point that decoupling is not the solution. “Historically, China is not the enemy,” says Ji Chen who is originally from China. “The only thing the Chinese want is a better way of life.” McNally took that one step further by declaring that “China is not Russia.”
“Yes, China is a massive challenge to the United States, no doubt,” concluded McNally. “But the Chinese have an enormous stake in keeping the international order intact, at least the parts they like…they’re not intent on destroying it as the Russians are, clearly. And we seem to have, quite deliberately in my opinion, confused that and made China the enemy…And that, as Ji Chen mentioned, is not the case.”
