In the Post-Corona Era, China Aims to Narrow the Gap with the United States

[Asia Economy Beijing=Special Correspondent Park Sun-mi] Confident in its success in controlling COVID-19, China is poised to narrow the gap with the United States, which holds the top global position, based on economic recovery driven by a massive stimulus package worth approximately 1,000 trillion won.

Since the COVID-19 outbreak, China has been actively revealing its ambitions in the field of advanced new technologies. According to the work report of the Two Sessions announced by Chinese Premier Li Keqiang on the 22nd, China plans to prioritize work in areas such as new infrastructure construction, next-generation information network development, and advanced new urban development within the scope of efficient investment expansion. The key items for new infrastructure investment include 5G, industrial internet, big data, and artificial intelligence.

Regarding this, Bloomberg estimated that China will invest about 1,730 trillion won by 2025 to wrest the world’s top position in advanced technology from the United States. Advanced IT companies are strong supporters of China’s leap in new technology fields. Alibaba, a Chinese e-commerce company, announced in April, when the Chinese economy was shaken by COVID-19, that it would invest about 34.462 trillion won over the next three years to expand cloud-related infrastructure such as data centers. Another IT giant, Tencent, pledged on its official SNS account on the 26th to invest about 86.3 trillion won over the next five years in building digital infrastructure.

Although China’s first-quarter economic growth rate plunged to -6.8% due to the shock of COVID-19, the importance of securing production and supply chains in China has been highlighted amid the pandemic, and the Chinese industrial sector views this as an opportunity to expand its influence globally.

While countries such as the United States and Japan are actively promoting reshoring of their companies that had entered China due to COVID-19, the fact that not many companies have actually decided to U-turn shows how important China is in global goods production.

In a joint survey conducted in early March, when COVID-19 damage was severe worldwide, by the American Chamber of Commerce in China (AmCham), PricewaterhouseCoopers (PwC) China, and others, over 70% of executives from 25 U.S. companies with global sales exceeding $500 million responded that they had no plans to move product manufacturing and supply chain operations outside China. Greg Gilligan, chairman of AmCham China, said in an interview with Chinese state media, "Less than 1% of those surveyed expressed an intention to leave China," adding, "Most still feel that China is worth continuing to operate production and supply chains in."

Decisions on production and supply chain relocation require long-term planning and commitments, and companies struggling amid the economic downturn are trying to save costs, so it is not a situation where they can decide to leave China overnight. CNBC analyzed, "Since the COVID-19 outbreak, companies have been seriously considering how to build supply chain resilience," and "In that process, China has emerged as a very attractive total supply chain solution. China is the only country in the world where you can find almost everything needed to make something."

However, China’s inability to be free from responsibility for the spread of COVID-19 poses a serious challenge to its expansion of global influence.

Although China is playing an active supporting role in the global fight against COVID-19, the perception that China is the origin of the virus has led to criticism and hostility toward China. The Diplomat, a foreign affairs and security specialized media outlet, pointed out, "China may face serious political, diplomatic, and economic challenges after COVID-19," and "China’s 'mask diplomacy' is not a gesture of goodwill but rather a public relations strategy to restore its image after being blamed for the COVID-19 outbreak."

This content was produced with the assistance of AI translation services.