Neal Kimberley

How Joe Biden beating Donald Trump could add fuel to China’s economic recovery

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Markets might conclude that Biden’s White House will be less wedded to tariffs, which would be positive for the Chinese economy and its exporters

A blue wave could spark renewed US fiscal stimulus that would boost US consumer demand and benefit those countries which sell the most goods to the United States

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Democratic presidential candidate Joe Biden speaks before boarding his campaign plane at McCarran International Airport in Las Vegas on October 9. A Biden victory in November combined with Democrats taking both houses of Congress could spur more demand for Chinese assets and the renminbi. Photo: AP

Neal Kimberley

Published: 10:00pm, 13 Oct 2020Updated: 7:12am, 17 Oct 2020

If US opinion polls are correct, next month will see Democratic Party nominee Joe Biden take the White House and his party might even win control of both houses of Congress in a “blue wave” election. This might trigger even more demand for Chinese assets and the renminbi.

No one can really know how a Biden presidency would handle the crucially important China-US relationship. If the Obama-Biden era is a guide, the emphasis may be more on subtle diplomacy than presidential tweets. That is not to criticise the incumbent US president’s approach but merely to recognise that Joe Biden is not Donald Trump.

Trump has previously referenced a possible decoupling of the Chinese and US economies. Meanwhile, Tony Blinken, a senior foreign policy adviser to Biden, said on September 22 that, “Trying to fully decouple, as some have suggested, from China … is unrealistic and ultimately counterproductive.”

At the same time, while Trump has embraced tariffs in an attempt to force Beijing to the negotiating table on trade, Biden may be less wedded to such a strategy.

In March 2018, Trump rolled out a 25 per cent tariff on imported steel and a 10 per cent tariff on aluminium imports. “We’re going to build our steel industry back and our aluminium industry back,” Trump said, but it hasn’t quite played out that way.