While the Biden Administration offers the prospect of a fresh start to U.S.-China relations, we continue to see three contentious points that will likely set the tone between the world’s two largest economies.
Beyond the fate of trade deal phases, China can exert significant economic leverage via the market access it provides to U.S. companies and affiliates. We also expect something of a technological “arms race” between the countries, likely resulting in competing platforms across a range of cutting-edge technologies. Furthermore, the geopolitical risks between the countries cannot be overlooked: China will likely attempt to bolster its relationships with U.S. allies while continuing to take a hard line towards Taiwan.
Although the two sides may find more common ground on less contentious topics, these three points will likely cast a chill over the relationship and pose attendant investment risks going forward.