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Yao Yang: China’s Relationship with Post-Pandemic World

May 25-2020   



Decoupling with or containment of China – such topics seem to dominate the international rumor mill of late. To put them in perspective requires examining the variables that have been introduced by the pandemic into the relationship between China and the rest of the world, said Prof. Yao Yang, Dean of the NSD, in a recent speech for a PKU event.

 

The clamors for China to compensate the other countries for the pandemic can be safely neglected, said Prof. Yao, based on both a US law promulgated in 1976 and international rules. Otherwise, China and the other countries can make a case in suing the US for the financial crisis in 2008. As of the developing countries hard hit by the pandemic, China should consider reduce or exempt some of their debts. In the long run, it’s advisable that China shifts its foreign aids from loans to grants while strengthening the supervision of their usages.

 

Despite the lack of sense for any attempt to identify any culpable country, it is of obvious scientific significance to trace the origin of the virus. China should make active responses to the proposals of the EU and the UN in this regard, either by conducting a joint investigation or by releasing its own white paper. Candor and wisdom are needed for such undertakings.

 

On the economic front, hardly will the global value chains be able to desert China on account of the underlying economic rules of division of labor and specialization, the sheer size of the Chinese market, and the strength of China’s manufacturing network. Surveys by American and Japanese chambers of commerce indicated that around 10-20% of foreign firms were putting serious thoughts into relocation, but only 1-2% would actually do it.

 

The pandemic will have some short-term impacts and might play a role in shaping long-term trends. The longer-term challenge for China, though, is the so-called new-typed cold war with the US. Prof. Yao believed that such a new cold war has been simmering since President Trump took office. It can be defined as the competition or even confrontation between China and the US in ideology, geopolitics and technology. The ideological confrontation between China and the West has gained traction in the pandemic as the latter tried to lay blame on China for their own mismanagement of the virus. Alarmingly, President Trump has managed to make the US public opinion much more hostile towards China by cajoling people to make irrational choices, hence the need for China to recognize the ideological confrontation between the two countries. The geopolitical confrontation came into being when then President Obama pushed for the so-called Asia Pivot. China’s Belt and Road initiative has made the US wary of a strong geopolitical competitor. On the technological front, the US has initiated bans and blocks since two to three years ago, and the EU has been following suit.

 

Prof. Yao argued that China should adopt a more active mindset and posture in dealing with international challenges. Regarding the new cold war, it should seek to maintain competitive-cooperative relations with the US, avoid economic nationalism, and turn ideological confrontation into competition on state governance. Philosophically, a new China narrative can be formulated based on Confucianism, which highlights order and harmony in state governance. Rather than simply emphasizing institutional superiority, China should explain its philosophy for and practice of state governance in an understandable and logical way, and steer clear of the binary framework of democracy-autocracy. 

Yao Yang: China’s Relationship with Post-Pandemic World

May 25-2020   



Decoupling with or containment of China – such topics seem to dominate the international rumor mill of late. To put them in perspective requires examining the variables that have been introduced by the pandemic into the relationship between China and the rest of the world, said Prof. Yao Yang, Dean of the NSD, in a recent speech for a PKU event.

 

The clamors for China to compensate the other countries for the pandemic can be safely neglected, said Prof. Yao, based on both a US law promulgated in 1976 and international rules. Otherwise, China and the other countries can make a case in suing the US for the financial crisis in 2008. As of the developing countries hard hit by the pandemic, China should consider reduce or exempt some of their debts. In the long run, it’s advisable that China shifts its foreign aids from loans to grants while strengthening the supervision of their usages.

 

Despite the lack of sense for any attempt to identify any culpable country, it is of obvious scientific significance to trace the origin of the virus. China should make active responses to the proposals of the EU and the UN in this regard, either by conducting a joint investigation or by releasing its own white paper. Candor and wisdom are needed for such undertakings.

 

On the economic front, hardly will the global value chains be able to desert China on account of the underlying economic rules of division of labor and specialization, the sheer size of the Chinese market, and the strength of China’s manufacturing network. Surveys by American and Japanese chambers of commerce indicated that around 10-20% of foreign firms were putting serious thoughts into relocation, but only 1-2% would actually do it.

 

The pandemic will have some short-term impacts and might play a role in shaping long-term trends. The longer-term challenge for China, though, is the so-called new-typed cold war with the US. Prof. Yao believed that such a new cold war has been simmering since President Trump took office. It can be defined as the competition or even confrontation between China and the US in ideology, geopolitics and technology. The ideological confrontation between China and the West has gained traction in the pandemic as the latter tried to lay blame on China for their own mismanagement of the virus. Alarmingly, President Trump has managed to make the US public opinion much more hostile towards China by cajoling people to make irrational choices, hence the need for China to recognize the ideological confrontation between the two countries. The geopolitical confrontation came into being when then President Obama pushed for the so-called Asia Pivot. China’s Belt and Road initiative has made the US wary of a strong geopolitical competitor. On the technological front, the US has initiated bans and blocks since two to three years ago, and the EU has been following suit.

 

Prof. Yao argued that China should adopt a more active mindset and posture in dealing with international challenges. Regarding the new cold war, it should seek to maintain competitive-cooperative relations with the US, avoid economic nationalism, and turn ideological confrontation into competition on state governance. Philosophically, a new China narrative can be formulated based on Confucianism, which highlights order and harmony in state governance. Rather than simply emphasizing institutional superiority, China should explain its philosophy for and practice of state governance in an understandable and logical way, and steer clear of the binary framework of democracy-autocracy.