China in 2022: Five Areas to Watch

A year ago, China’s economy was roaring back from COVID-19, its leaders were on the verge of sealing an investment agreement with the European Union and they were being celebrated for ambitious new climate reduction targets. As 2021 draws to a close, a very different picture is emerging. A long-simmering property crisis has boiled over, raising doubts about China’s growth model and inevitable rise narrative. The state is tightening its grip over the economy and society, with a crackdown on big technology firms and zero-tolerance pandemic policies that are cutting China off from the rest of the world. And multilateral efforts to push back against Beijing’s distortive economic policies and more assertive diplomacy are accelerating. In short, China enters 2022 facing more powerful economic and geopolitical headwinds than it has in decades. Against this backdrop, Rhodium Group experts offer their assessment of how China dynamics could evolve next year across five domains: the political landscape; the economy; the technology sphere; climate policy; and the multilateral push to respond to Beijing.

Posted July 22, 2022
Share
Facebook Twitter Pinterest

China’s “Bottom Line” on Russia

As China grapples with talking points concerning its political relationship with Russia, financial incentives and sanctions threats will undermine the economic relationship between the two countries. The Russian invasion has highlighted a stark divide between China’s political interest in asserting a multipolar world order and the technocratic demands of Beijing’s continued global economic and financial engagement.

Posted March 25, 2022
Share
Facebook Twitter Pinterest

Beijing’s Russia Reckoning

Russia’s military challenges in Ukraine and the concerted Western response are forcing hard choices in Beijing. Regardless of how China balances its support for Russia and its long-term interests in access to the global financial system, Beijing’s decisions in the coming months will be carefully scrutinized.

So long as the G7 consensus on sanctions against Russia holds and the United States can credibly threaten secondary sanctions on Chinese institutions, China is likely to prioritize those institutions’ continued access to US dollar and euro financing. This means it is likely to encourage its big banks to comply with the financial sanctions aimed at Russia and tread carefully in helping Moscow navigate export controls on key technologies. Beijing will want to avoid becoming a bigger target for Washington. While there is some space for China to continue non-dollar trade with Russia through banks that are less exposed to sanctions, there are limits to how much Beijing can ease Moscow’s economic stress through trade.

Posted March 3, 2022
Share
Facebook Twitter Pinterest