How Biden And Jinping Are Mishandling Situations In Their Respective Countries

by Ujjawal Mishra - Aug 1, 2022 05:33 PM +05:30 IST
How Biden And Jinping Are Mishandling Situations In Their Respective CountriesXi Jinping and Joe Biden.

President Joe Biden of the US and President Xi Jinping of China are arguably the two most powerful men in the world. However, their handling of crises in their respective countries has been far from impressive and has global implications.

America's economic woes: Biden's series of miscalculations have landed America in a technical recession.

  • In June, at 9.1 per cent, the United States hit a 40-year-high with consumer price inflation.

  • The major thrust came from gasoline prices, increasing 59.9 per cent over the last twelve months and 11.2 per cent over the previous month.

  • Similarly, fuel oil prices went up by 98.5 per cent in the preceding 12 months, electricity by 13-odd per cent, piped gas (utility) by 38.4 per cent for the same period, and even food prices by 10 per cent since June 2021.

  • For an average American household, this was economic decimation.

The war in Ukraine is having massive implications.

  • In June 2022, the wheat, corn, and barley exports from Ukraine were around 1 million tonnes, 40 per cent down from June 2021.

  • Prices of key agricultural commodities have shot up.

  • Wheat prices almost tripled before cooling off.

  • Corn and barley prices more than doubled.

  • Sunflower oil, rapeseed oil, and palm oil prices increased by 200 per cent.

Floundering foreign policy of Biden is another source of embarrassment.

  • EU is reeling under pressure from the sanctions they have imposed on the Russians.

  • EU has eased the curbs on maritime insurance in late July, citing energy needs.

  • Gas prices have risen from less than 50 euros per megawatt hour in Q3 2021 to now over 200 euros.

  • This is making it difficult for the West to sustain the sanctions against the Russians.

China's economic tension: No one in the CCP has the valour to point out the path of social and economic decimation the country has undertaken.

  • Against the goal of 5.5 per cent GDP growth, the Chinese economy only grew at 2.5 per cent in the first half of 2022.

  • Covid-zero lockdowns have hammered the economy and disrupted supply chains.

  • In Shanghai port, the number of containers processed in April 2022 was the third-lowest since January 2019, at around 3.1 million.

  • April 2022 has been the worst month for the Shanghai port since February 2020, when it processed merely 2.3 million containers.

  • Tesla, Toyota, and Volkswagen have revised their projections for the current year as delay in delivering key raw materials disrupts their production.

  • Of more than 350 companies surveyed, nearly 60 per cent are looking at decreased revenue projections for 2022.

  • Thanks to the unpredictability of the lockdowns, a quarter of the companies surveyed by the European Union Chamber of Commerce in China are looking to move their investments outside China.

The real estate sector: The crisis in the real estate sector pulled down the YoY GDP growth in the second quarter to 0.4 per cent.

  • Earlier this month, buyers launched a protest stating that they would not make their monthly mortgage payments until the projects were completed.

  • Even Evergrande, with over $300 billion in liabilities, defaulted on its restructuring plan.

  • Together, nearly $590 billion can be attributed to unfinished real estate projects in China.

The dollar-bonds sector: Issued mostly by real estate developers, some of these bonds were paying a 32 per cent yield in March 2022, higher than what was in 2008.

  • For Q1, 2022, the issuance was down by 97 per cent compared to Q1, 2021, thus triggering another crisis for the developers.

  • Also, $13 billion payment in interest is due for the next 12 months while defaults are rampant.

Battleground Taiwan: Later this week, the Speaker of the House and a key national leader in the United States, Nancy Pelosi, is expected to visit Taiwan.

  • For Beijing, the prospects of her visit are an opportunity to flex its muscles, double down on its claims on Taiwanese territory, and conduct navy and air patrols.

  • For the White House, however, her visit comes as another foreign policy challenge, for it could raise serious questions against US’ commitment to defend Taiwan if China responds.

Bottom line: Facing grim economic situations in their respective nations, these two men, one of unsound mind and the other of unchecked authority, might just clash in Taiwan, in the hope of a victory.

Read more: Biden-Jinping: A Tale Of Two Regimes And Recession

Ujjawal Mishra is a Staff Writer at Swarajya. He tweets @Ujjawal1Mishra.
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