Nobel Prize Winner Professor Spence: "Difficult to Assert US Biden Foreign Policy"

"US-China Conflict Likely to Continue for the Time Being"

Professor Michael Spence, New York University

[Asia Economy Reporter Eunbyeol Kim] Michael Spence, Nobel laureate in Economics and professor at New York University, said on the 9th, "Joe Biden, the next President-elect of the United States, will face a considerably complex environment both domestically and internationally," adding, "(Since significant parts have already changed, such as industrial structure and the rise of Asian countries), it is difficult to see the Biden administration returning to the previous normal structure even after taking office."

He attended via video the '2020 ESG Global Summit: The Path to a Resilient Economy and Sustainable Finance' conference hosted by the Institute for Global Economics (IGE) and KB Financial Group, responding to the question of whether "President-elect Biden can erase the legacy of President Donald Trump and return to normal" with this statement.

Professor Spence also predicted that the US-China conflict, which emerged during the Trump administration, will continue in the future. He said, "Both the Republican and Democratic parties share a seriousness about the China issue," adding, "Given the significant political division in the US, it is difficult to make definitive statements about the Biden administration's foreign policy."

Although it is uncertain how much support Biden will receive domestically, he viewed positively the fact that the Biden administration is expected to engage more actively in international issues diplomatically compared to the Trump administration. He anticipated that the Biden administration's pledge to rejoin the Paris Climate Agreement could be implemented quickly, and that the withdrawal from the World Trade Organization (WTO), which President Trump had declared, would likely not be carried out.

He pointed out changes brought by the economic impact of COVID-19, including digitalization and the shift of economic weight towards countries successful in quarantine (East Asia). He stated, "Changes that should have taken about five years happened in about two months." Professor Spence predicted a reorganization of the global economic structure centered on Asia and said this was not necessarily negative. He identified South Korea, Taiwan, China, Hong Kong, and Singapore as countries showing results in quarantine.

Regarding next year's economy, he expected economic shocks to continue in countries outside Asia. He said, "If COVID-19 treatments or vaccines are rapidly distributed and the spread of COVID-19 stops, the global economy could grow in a V-shaped recovery next year," but also predicted, "The recovery will show disparities in growth among industrial sectors." Professor Spence noted that industries such as food service, aviation, and tourism have suffered significant damage and predicted, "Even if economic activity restrictions are lifted, the economy will remain sluggish due to ongoing anxiety."

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