According to a Bloomberg column by Minxing Pei, both Xi Jinping of China and Joe Biden of the United States have prioritized national security over the economy. However, Pei suggests that China will bear higher costs in the economic game, potentially hampering Beijing’s efforts to catch up with the US. Pei points to China’s recent ban on US chipmaker Micron and efforts by the US Inflation Control Act to eliminate some Chinese-made green energy products as examples of China’s growing concerns over national security. Pei predicts that the costs of China’s security-centric development strategy will be much higher than those in the US, with China’s recent strong post-coronavirus recovery appearing misplaced due to faltering demand and manufacturing output. In addition, private investment in China has increased by only 0.4%, as investors recognize that the Chinese government is prioritizing security over the economy. Pei suggests that Xi’s “security obsession” may make it difficult for foreign companies to do business in China, as the latest espionage laws have made doing business in China more intimidating, while companies are being investigated for possible violations of security regulations. Pei concludes that China’s actions to strengthen its economic defenses are likely to be far more costly than their US counterparts and will inevitably reduce China’s growth potential and thwart its ambitions to catch up with rivals.
“The US economy will outpace China as growth is stifled by Xi Jinping’s security fixation,” warns academic
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