Biden turns on Beijing: is China really a ‘ticking time bomb’?

Joe Biden has described China as a “ticking time bomb in many cases” because of the economic challenges it is facing.

Speaking at a political fundraiser in Utah, the US president cited China’s high unemployment and ageing workforce, saying “they have got some problems”. And “that’s not good”, he added, “because when bad folks have problems, they do bad things”.

Biden said he did not want to hurt China and wanted a rational relationship with the country, but his comments are “some of the most alarming yet that Biden has made about the US’s chief geopolitical rival”, said Bloomberg.

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What did the papers say?

Biden was correct that China is facing financial challenges. While the US has spent much of the past 18 months struggling to control inflation, China is experiencing the “opposite problem”, said The New York Times. People and businesses are “not spending”, which is pushing the economy to “the verge of a pernicious condition called deflation”.

Consumer prices in China fell in July for the first time in more than two years, the country’s National Bureau of Statistics announced this week. Deflation is “particularly serious” in a country with very high debt, like China, added the NYT, and Beijing has “pressured” its economists not to even mention the possibility of it.

Nevertheless, it was not immediately obvious what Biden meant by a “ticking time bomb”. Washington continues to fear that China will invade Taiwan and a “series of incidents in recent months”, including an alleged spy balloon and military encounters in the South China Sea, have “heightened tensions between the two countries”, said Bloomberg.

But Biden’s remarks came shortly after US secretary of state Antony Blinken completed a visit to China “aimed at stabilising relations” that Beijing described as being at their lowest point since formal ties were established in 1979, noted The Guardian.

Some believe his change of tone in Utah may have been more domestically calculated, as the prospect of an electoral rematch with Donald Trump looms. It’s “unclear what exact flashpoints Biden may have been considering”, said the New York Post, but Biden’s words came as he was “criticised by Republicans for not taking a more forceful approach toward China”.

Just 24 hours before Biden’s speech, Trump described the president as “fully compromised” and “so afraid of China”. Speaking to Newsmax, he said: “I believe that China has paid him a fortune. I’ve never seen anybody so weak on China.”

What next?

There are fears that relations between the two nations could lead to a new cold war.

The US announced this week that it will ban some US investment into Chinese quantum computing, advanced chips and artificial intelligence, as it “boosts efforts to stop the Chinese military from accessing American technology and capital”, said the Financial Times.

“The use of such curbs by the world’s strongest champion of capitalism” is new evidence of the “profound shift” in America’s economic policy as it contends with the rise of an “increasingly assertive and threatening rival”, said The Economist.

But such measures bring “neither resilience nor security”, it said, because supply chains have become “more tangled and opaque as they have adapted to the new rules”. America’s “reliance on Chinese critical inputs remains” and its policy “has had the perverse effect of pushing America’s allies closer to China”.

Beijing expressed “serious concern” about the ban, claiming that it “deviates from the principles of fair competition and the market economy that the US consistently advocates”. It said Biden’s measures were a sign of “anti-globalisation” and warned that it “reserves the right to take measures” in response.

Those words are ominous in the light of The Atlantic’s forecast in June that a “new cold war has come to seem all but inevitable” because “tensions” between China and the United States are “mounting in step with Beijing’s growing power and ambition”.

The “moment for opening a dialogue is now”, it said, while the US “still enjoys economic and military superiority”, and “while the two superpowers of the 21st century can still avoid the dangers and disorder that come with geopolitical rupture”.