The world last week: Breaking many traditional values

Europe and America turn their backs

President Donald Trump is facing a decline in America’s international standing, while European countries are increasingly leaning towards the idea that China can replace America as the world’s future leader. This clear shift is reflected in a series of public opinion polls in the past week in European countries, showing that the bond between the “old continent” and the US has been deeply fractured since the Covid-19 pandemic broke out.

The relationship between the US and Europe is deeply fractured. Photo: DPA

76% of Germans said their opinion of the US had worsened, compared to just 36% of Germans who said the same about China. When asked whether they would maintain close ties with the US, only 37% agreed - a big drop from last year's 50%. In another question, only 10% of Germans rated the US as their country's most important partner.

Similarly, in the UK, people also expressed their “back-to-back” views towards the US. A poll by the data analysis company YouGov showed that 37% of British people believe that promoting relations with Europe should be a priority, while only 13% said that the US should be a priority, despite the UK leaving the European Union in January 2020.

Europe’s attitude has changed since President Donald Trump’s handling of the pandemic shocked the world. In particular, his comments speculating that injecting disinfectants could be used to treat Covid-19 patients caused skepticism and horror across Europe.

“For more than two centuries, America has stirred many emotions in the world: love and hatred, fear and hope, admiration and contempt, awe and anger. But there is one emotion toward America that has never been felt before: pity,” wrote Irish Times columnist Fintan O'Toole.

President Trump's handling of the pandemic has drawn global criticism. Photo: Getty

Some reports also indicate that President Trump is trying to buy exclusive rights to the production of a Covid-19 vaccine being developed in Germany. This has also caused anger across the "old continent". President Trump's actions in the process of responding to Covid-19 seem to have further "exploded" negative feelings towards him, which are already spreading in Europe. A recent survey said that only 2% of French people trust President Trump to be a world leader.

As a result, Europe is increasingly “ignoring” the US. This is evident in every move of European governments, especially in the increasingly unconcerned manner of President Trump’s warnings about Europe forging closer ties with China. A number of European countries are promoting cooperation with China’s largest telecommunications group Huawei to develop 5G networks, despite the threat of strong sanctions from the White House. In addition, trade agreements between Europe and China are being pushed more than ever.

For its part, Beijing is demonstrating its ability to increase its influence in Europe. A report by investment bank GP Bullhound shows that since the European tech market reopened in 2018, China has caught up with the US in terms of investment in European tech companies, starting in 2018. Last week, Chinese telecoms giant Huawei invested £5 million in a new tech hub at Imperial College London.

China is gradually replacing the US position in Europe.

Experts say it is clear that as the global economy plunges into a deep recession, European governments and businesses are increasingly turning to China for support and investment. And with President Trump’s reputation in Europe deteriorating, China’s rise will come at a cost to the United States.

China does not set a growth target.

For the first time in decades, China has abandoned its GDP growth target, citing uncertainty over the damage caused by the Covid-19 pandemic, in an acknowledgement of the huge challenges the country faces amid a struggling economy and growing hostility on the international stage.

Speaking at the opening ceremony of the annual session of the National People's Congress - China's most important political event of the year that has been "overshadowed" by accusations that Beijing is responsible for the outbreak of the global pandemic, and the unemployment situation at home - Premier Li Keqiang said that China has not set a specific target for economic growth in 2020, due to many unpredictable factors.

The announcement marks the first time since 1990 that China has abandoned a GDP target, and the government will instead prioritize stabilizing employment, increasing personal income, ensuring people's living standards, and alleviating poverty in rural areas. China's economic growth fell 6.8% in the first quarter from a year earlier and is expected to slow further in the second quarter.

Chinese President Xi Jinping (center) attends the opening of the annual session of the National People's Congress in Beijing on May 22. Photo: Xinhua

Therefore, the government called on governments at all levels to “tighten their belts” and all surplus, unused and transferred budgets will be recovered and reallocated for better use. The deficit is expected to exceed 3.6% of GDP this year, with a deficit of 1 trillion yuan compared to last year. 1 trillion yuan of government bonds will be issued to control Covid-19. The Chinese premier called these “extraordinary measures in extraordinary times”.

Analysts say economic instability could threaten social stability and the power of the ruling party. Unemployment could reach 10%. Failure to deliver on commitments such as doubling GDP between 2010 and 2020 could undermine the leadership’s credibility. President Xi Jinping has identified goals such as eradicating poverty and achieving a moderately prosperous society by 2020 as key government goals. Before the pandemic, China had projected a growth target of 6%.

Setting targets in an uncertain economic environment is risky, says Bloomberg economist Chang Shu. Breaking with decades of tradition, targets are now embedded in economic policy. So the challenge now is to figure out how to do it without a GDP target.

Detailed measures include further VAT cuts and an additional 500 billion yuan in tax cuts. To invest in infrastructure, local governments will issue 3.75 trillion yuan in special bonds this year. Economists expect issuance to reach 4 trillion yuan.

Container port in Qingdao, Shandong province, eastern China. Photo: THX/TTXVN

But analysts say that while a slew of stimulus packages have been announced, the government’s growth ambitions are still constrained by the risks of rising debt. China borrowed heavily to stabilize its economy after the 2008 crisis, and rising unemployment could force the government to intervene.