Biden's Remark on Chinese Economy Raises Questions and Concerns

Biden's Remark on Chinese Economy Raises Questions and Concerns
U.S. President Joe Biden participates in a video meeting with Chinese leader Xi Jinping on Nov. 15, 2021. (Alex Wong/Getty Images)
Mark Hendrickson

Earlier this month, at a fundraising event, President Joe Biden referred to the economy of China as a “ticking time bomb.” What are we to make of this remark?

On the positive side, it is refreshing to read that someone on the progressive side of the political spectrum is willing to openly criticize the Chinese economy. Progressives allied with President Barack Obama were singing the praises of “China’s superior economic model.”
The leader of our neighbor to the north, Canadian Prime Minister Justin Trudeau, has been known to wistfully envy the Chinese model due to the power wielded by China’s “paramount leader,” Xi Jinping. Here is an actual quote from Mr. Trudeau: “You know, there’s a level of admiration I actually have for China because their basic dictatorship is allowing them to actually turn their economy around on a dime and say ‘we need to go green fastest … we need to start investing solar.'” Since revealing his proclivities a decade ago, Mr. Trudeau has learned to be more discreet in expressing open admiration for China. Still, his 2022 repression of peaceful protesters included the kind of heavy-handed suppression that one would expect from Mr. Xi, such as threatening to confiscate the licenses of truck drivers so they couldn’t legally drive and even freezing bank accounts of Canadian citizens who dared to support the protesters.
It is true that the Chinese economy is going through serious challenges today. The youth unemployment rate has soared so high that the Chinese Communist Party has ceased publishing that number. There have been defaults on property-related loans, possibly portending a severe real estate contraction. Industrial production, consumer spending, business investment, and foreign trade—both imports and exports—have been falling. The Chinese economy is indeed in a precarious position.

But why did President Biden ridicule China publicly?

I’m no expert on international diplomacy. But with tensions rising between China and the United States, is a verbal poke in the eye wise? I’ve always thought President Theodore Roosevelt’s approach—“speak softly and carry a big stick”—makes more sense than provocative insults. I’m not sure what will be gained by taunting or provoking an adversary—especially when autocratic governments often resort to military aggression to divert their unhappy citizens from their economic woes. Badmouthing the Chinese economy almost seems juvenile, with the appropriate retort perhaps being, “Sticks and stones ….”

Here is a cynical thought: Perhaps President Biden is trying to convince the American public that he is tough on China when, in fact, he has not been so tough. Consider the Biden administration's removal of former President Donald Trump’s ban on TikTok, the shrinking of the U.S. Navy while China is rapidly expanding its navy, and energy policies (for example, restricting domestic production of fossil fuels and pushing Americans to increase the use of solar power with components produced in China).

There is another reason why President Biden’s public taunt of China is problematic. I’m thinking of the old saying, “People who live in glass houses shouldn’t throw stones.” One can make a strong argument that the U.S. economy itself is a ticking time bomb and that the president is trying to deflect attention from our domestic economic problems by calling attention to China.

The ticking time bomb in the U.S. economy is the almost $33 trillion of accumulated national debt, along with the prospect that the annual interest expense on that debt will exceed $1 trillion next year, and then accelerate from there. That is part of the reason for the recent downgrading of U.S. government debt for only the second time.
In addition to massive debt, the Biden administration is doing everything it can to extend the power and control of federal bureaucracies, unilaterally rewriting longstanding rules, including abandoning any attempt to rationalize new regulations by conducting realistic cost/benefit analyses. The increasing bureaucratization in Washington is uncomfortably close to what we see in China and other socialist states in which the mode of government is dictatorship by bureaucracy. In a brazen assault on our Constitution, the Biden administration is pushing federal bureaucracies to defy recent Supreme Court rulings.
Just as socialist governments are characterized by central economic planning, the Biden administration is seeking to greatly expand Uncle Sam’s control over business. As an article in The Economist put it last year, “From semiconductors to electric vehicles, the American government is going into business.”

If there is one crucial economic truth American leaders should know by now, it is that the government cannot match the economic productivity of free markets. Socialistic systems stagnate and crumble because the political powers that be suppress free markets. For President Biden to be charging down the path of greater government control over the economy while warning of the dangers of China’s statist system is more than a little ironic. Economic principles are universal and cannot be ignored with impunity.

If China’s economy has become a “ticking time bomb” due to ill-advised and counterproductive government intervention, then a similar outcome awaits any economy, including the American economy, that practices similar interventions.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Mark Hendrickson is an economist who retired from the faculty of Grove City College in Pennsylvania, where he remains fellow for economic and social policy at the Institute for Faith and Freedom. He is the author of several books on topics as varied as American economic history, anonymous characters in the Bible, the wealth inequality issue, and climate change, among others.
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