Tight squeeze

Balance of Power

It's not just the neighbors who are anxious. Pretty much every country is grappling with how to deal with China and wondering how the incoming U.S. administration of Joe Biden might change things.

That global concern shows just how much China's economic and strategic clout has grown under the presidency of Xi Jinping. Nations face the challenge of how to maximize the benefits — trade, access to cheap loans — without being trapped in Beijing's orbit, reliant on its largesse and under pressure to give it a pass for its crackdowns on dissent.

Former U.S. President Bill Clinton says Xi's move to abolish term limits, leaving him able to potentially rule indefinitely, has upended the relationship with America.

The question now is how Biden might alter the trajectory between the world's two biggest economies. Biden is just as much a China critic as Donald Trump — he may take an even harder line. But the China-U.S. trade war hurt many countries. Their strategic scuffles draw in others. Smaller countries feel caught in the middle.

Singapore Prime Minister Lee Hsien Loong has frequently pointed out those difficulties. In an interview for the Bloomberg New Economy Forum, he said Biden should seek an "overall constructive relationship" with China following "quite a tumultuous ride" under Trump.

Beijing is urging the U.S. to be patient because change in China can take time. Senior regulatory official Fang Xinghai hopes ties will be in a much better place in four years from now.

The rest of the world may hope so as well. — Rosalind Mathieson

The Kota Cepat vessel loaded with shipping containers approaches the Yangshan Deepwater Port in Shanghai on July 12.

Photographer: Qilai Shen/Bloomberg

The New Economy Forum is organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News. Tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines

Locking back down | America's effort to revive its virus-battered economy has been put on pause — or thrown into reverse — across much of the country as new infections soar at the fastest pace since the pandemic's earliest days. California yesterday reinstituted bans on many indoor businesses, while Oregon, Washington and New Jersey tightened curbs. Even the governor of Iowa, long resistant to virus rules, issued a limited mask mandate.

Legacy building | Trump is rushing to leave his final mark on energy, financial and foreign policy while stalling the transition to Biden, who warned that further delays in the handoff risk increasing the coronavirus death toll. The Pentagon told military commanders yesterday it would draw down U.S. deployments to Iraq and Afghanistan. The announcement followed administration moves to escalate tensions with Iran and China. Domestically, Trump is rushing to lease oil drilling rights in the Arctic National Wildlife Refuge before Biden takes office.

  • Click here for more on how Biden is beginning to fill out his roster of top White House aides and here for how his call for Congress to pass a larger-scale stimulus package has run into headwinds.
  • Biden will meet with national security experts today to discuss readiness at key agencies, even as his transition team continues to be denied access to federal departments.

Artful avoidance | Delta Air Lines is sidestepping millions of dollars in U.S. tariffs on European jetliners by initially routing them outside the country to such places as Amsterdam and El Salvador. The U.S. carrier has taken delivery of seven European-built Airbus planes since Trump's levies took effect in October 2019 — but basing them overseas keeps the jets from being considered imports, even though some of them regularly enter the U.S.

Balkan bickering | Bulgaria is set to veto North Macedonia's accession talks with the European Union today, demanding that the former Yugoslav country first guarantee it won't revive historical claims over territory and its national minority inside Bulgaria. Albania and North Macedonia have waited more than a decade to start talks aimed at joining the EU to raise living standards.

Third time lucky? | Peru's congress chose U.S.-trained engineer Francisco Sagasti to be the nation's president — the third in a week — in the face of violent protests and political chaos. The move followed the surprise impeachment of Martin Vizcarra over corruption allegations and the resignation of his successor, Manuel Merino, after demonstrations in the capital, Lima, where two people were shot dead.

What to Watch

  • British Prime Minister Boris Johnson should consider strengthening regional virus restrictions after England exits its second lockdown next month because a previous three-tier system of social-distancing rules wasn't totally effective, a senior medical adviser said.

  • The U.K. and EU could strike a deal on their future trading and security relationship early next week as they edge closer to agreement on the biggest sticking points, sources say.

  • The Thai parliament is set to vote by tomorrow on a roadmap to amend the constitution, as pro-democracy groups call for more protests in Bangkok, seeking the resignation of Prime Minister Prayuth Chan-Ocha and reform of the monarchy.

  • A U.S. Navy destroyer operating near Hawaii successfully intercepted a mock intercontinental ballistic missile, designed to simulate one developed by North Korea. 

And finally ... France's largest glacier once looked so mighty sliding down the granite slopes of the Mont Blanc, Western Europe's tallest peak, that early explorers struggled to find the words to capture it. Today, the Mer de Glace remains the second-biggest glacier in the Alps, but it's also become a symbol of the rapid pace of global warming. Since 1900, it's shrunk by about a third of its volume: In total it's lost around 1.5 cubic kilometers of ice, equivalent to more than half a million Olympic swimming pools.

Photographer: Marco Bertorello/AFP/Getty Images



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