Page 24 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
rate. But for now, the divergent responses to the cohesive and coordinated. It is expected to play a
virus will have an impact on the fierce political and key role in the multipolar world that is emerging.
economic rivalry between Beijing and Washington Russia is another important player in the global
with ripples felt around the world. China’s political arena, considering its strong military, big
economy in 2021 was about 10% bigger than it was geopolitical influence in areas such as Central Asia
in 2019, and every other major economy is going and Middle East and cyber capabilities, as well
to be still licking its wounds. That means China’s as it being a permanent member of the United
role in the global economy is going to continue to Nations Security Council. Meanwhile, Japan plays
expand, making any attempts by US policymakers a key role in the Asia-Pacific region and has huge
to discourage other countries from deals with influence via the Asian Development Bank and its
Beijing, or otherwise “decouple” China from the leading role in the Comprehensive and Progressive
global economy, more difficult. China’s exports Agreement for Trans-Pacific Partnership after
have been stronger than expected, bolstered the exit of the US from the CPTPP's proposed
by demand for medical goods overseas. Beijing forerunner, the Trans-Pacific Partnership, as well
is experiencing other benefits as well. China as being a party to the newly-signed Regional
experienced success in the exchange rate and Comprehensive Economic Partnership. Likewise,
equity market performance at a time when many India and Australia have a great deal of influence
other economies were under pressure. China’s in South Asia and the South Pacific region
fiscal deficit for 2020 expand by 5.6 percentage respectively. It is foreseeable that the trend
points to 11.9% of GDP - a smaller-scale increase toward a multipolar world will accelerate in 2022,
than the massive stimulus that Beijing deployed and that China, the US, the EU, Russia, Japan, India
during the 2008-2009 financial crisis. By contrast, and Australia will compete and cooperate with
the United States will see a 12-percentage point each other in various areas. Political polarization
increase in its 2020 fiscal deficit as a share of and social divisions will be exacerbated in
GDP, to nearly 19%. While China’s consumption some countries. In Europe, there are growing
is improving, retail sales are still down from what tensions between supporters and opponents of
was expected before Covid, with urban residents’ Brexit, between people who welcome and reject
disposable incomes down 0.3% over the same migrants, between environmentalists and farmers,
period. Strict lockdowns in 2020 led to months of and between the extreme right and the extreme
lost wages for many workers (Shalal and Crossley). left. In the US, although Donald Trump is no longer
president, Trumpism will still be prevalent and
The gap between the Chinese economy and influential for a long time. Political polarization is
the US economy will further narrow. Among mirrored in acute economic and social divisions.
the G20 economies, China was the only one to The COVID-19 pandemic has aggravated the
register positive growth in 2020. China's GDP was inequalities and social fragility in many countries.
expected to be 68.4% of that of the US in 2020. For instance, the US has seen a marked increase
After the pandemic broke out, the IMF revised in unemployment among lower-wage workers in
the figure upward to 73.2%. IMF estimates by the service sector, while the 50 richest US citizens
2025 China's GDP will be 90% that of the US. In possess a total wealth of nearly US$2 trillion, which
terms of purchasing power parity, China overtook is almost the combined wealth of the poorest 50%
the US as the world's largest economy in 2014. of the population—about 165 million people. The
Even in their heydays, the Soviet Union and Japan data also reveal that the white people hold 84%
still lagged far behind the US in economic size. of the nation's wealth while black families own
Measured by the average value calculated based 4.1%, and there have been disproportionately high
on market exchange rate and PPP, China's GDP novel coronavirus infection rates and COVID-19
will be around 99% of that of the US by the end of death rates among non-whites. The deadly and
2021, and reach over 102% in 2022. The rapidly devastating pandemic has made people rediscover
narrowing gap between the two countries will the idea of a community with a shared future for
continue to complicate the China-US relationship. all mankind. The ship of human civilization has not
A multi-polar world is beginning to take shape. been capsized or halted amid the huge waves and
After Brexit, the European Union became more fierce storms. In 2021, the world started to recover
24
rate. But for now, the divergent responses to the cohesive and coordinated. It is expected to play a
virus will have an impact on the fierce political and key role in the multipolar world that is emerging.
economic rivalry between Beijing and Washington Russia is another important player in the global
with ripples felt around the world. China’s political arena, considering its strong military, big
economy in 2021 was about 10% bigger than it was geopolitical influence in areas such as Central Asia
in 2019, and every other major economy is going and Middle East and cyber capabilities, as well
to be still licking its wounds. That means China’s as it being a permanent member of the United
role in the global economy is going to continue to Nations Security Council. Meanwhile, Japan plays
expand, making any attempts by US policymakers a key role in the Asia-Pacific region and has huge
to discourage other countries from deals with influence via the Asian Development Bank and its
Beijing, or otherwise “decouple” China from the leading role in the Comprehensive and Progressive
global economy, more difficult. China’s exports Agreement for Trans-Pacific Partnership after
have been stronger than expected, bolstered the exit of the US from the CPTPP's proposed
by demand for medical goods overseas. Beijing forerunner, the Trans-Pacific Partnership, as well
is experiencing other benefits as well. China as being a party to the newly-signed Regional
experienced success in the exchange rate and Comprehensive Economic Partnership. Likewise,
equity market performance at a time when many India and Australia have a great deal of influence
other economies were under pressure. China’s in South Asia and the South Pacific region
fiscal deficit for 2020 expand by 5.6 percentage respectively. It is foreseeable that the trend
points to 11.9% of GDP - a smaller-scale increase toward a multipolar world will accelerate in 2022,
than the massive stimulus that Beijing deployed and that China, the US, the EU, Russia, Japan, India
during the 2008-2009 financial crisis. By contrast, and Australia will compete and cooperate with
the United States will see a 12-percentage point each other in various areas. Political polarization
increase in its 2020 fiscal deficit as a share of and social divisions will be exacerbated in
GDP, to nearly 19%. While China’s consumption some countries. In Europe, there are growing
is improving, retail sales are still down from what tensions between supporters and opponents of
was expected before Covid, with urban residents’ Brexit, between people who welcome and reject
disposable incomes down 0.3% over the same migrants, between environmentalists and farmers,
period. Strict lockdowns in 2020 led to months of and between the extreme right and the extreme
lost wages for many workers (Shalal and Crossley). left. In the US, although Donald Trump is no longer
president, Trumpism will still be prevalent and
The gap between the Chinese economy and influential for a long time. Political polarization is
the US economy will further narrow. Among mirrored in acute economic and social divisions.
the G20 economies, China was the only one to The COVID-19 pandemic has aggravated the
register positive growth in 2020. China's GDP was inequalities and social fragility in many countries.
expected to be 68.4% of that of the US in 2020. For instance, the US has seen a marked increase
After the pandemic broke out, the IMF revised in unemployment among lower-wage workers in
the figure upward to 73.2%. IMF estimates by the service sector, while the 50 richest US citizens
2025 China's GDP will be 90% that of the US. In possess a total wealth of nearly US$2 trillion, which
terms of purchasing power parity, China overtook is almost the combined wealth of the poorest 50%
the US as the world's largest economy in 2014. of the population—about 165 million people. The
Even in their heydays, the Soviet Union and Japan data also reveal that the white people hold 84%
still lagged far behind the US in economic size. of the nation's wealth while black families own
Measured by the average value calculated based 4.1%, and there have been disproportionately high
on market exchange rate and PPP, China's GDP novel coronavirus infection rates and COVID-19
will be around 99% of that of the US by the end of death rates among non-whites. The deadly and
2021, and reach over 102% in 2022. The rapidly devastating pandemic has made people rediscover
narrowing gap between the two countries will the idea of a community with a shared future for
continue to complicate the China-US relationship. all mankind. The ship of human civilization has not
A multi-polar world is beginning to take shape. been capsized or halted amid the huge waves and
After Brexit, the European Union became more fierce storms. In 2021, the world started to recover
24
