As coronavirus, US-China tensions add to global economic uncertainties, Asia looks to be a key growth engine

After a year in which ties between Beijing and Washington further strained, analysts are taking a measured approach to how the outlook could change under Joe Biden

Global coronavirus recovery seen hitting a few speed bumps before the pandemic is over, and the effects of geopolitical tensions will have wide-reaching ‘implications’

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China’s dramatic economic rebound from the damage caused by the coronavirus was highlighted by a significant acceleration in growth over the last three months of 2020. Photo: Reuters

Published: 3:11pm, 19 Jan 2021Updated: 9:22am, 20 Jan 2021

The evolution of the global coronavirus pandemic and geopolitical tensions between the United States and China will continue to reverberate throughout the world for some time, even after the virus is brought under control and bilateral tensions ease, experts have warned.

Speaking at a virtual panel during the Asia Financial Forum (AFF) on Monday, Singapore’s former deputy prime minister, Wong Kan Seng, said the stakes are high in the relationship between the world’s two largest economies, and the full effects it will have on the global economy are still unclear.

“It remains uncertain which way the relationship will go, because it will take time for president-elect Joe Biden to deal with the domestic economy as well as the pandemic. And he is trying to heal a nation that is already so divided, all of it will take up a lot of energy,” said Wong, who is now chairman of United Overseas Bank Limited, a multinational banking organisation headquartered in Singapore.

“It will continue to have implications for the rest of us in the world,” he added.

US-China relations deteriorated sharply over the past year, with Washington unleashing a series of sanctions on mainland Chinese and Hong Kong officials and companies, potentially penalising financial institutions that do business with them, for their alleged role in curtailing political freedoms in Hong Kong.

The US has also blacklisted dozens of Chinese firms, including top chip maker SMIC and drone manufacturer DJI on national security grounds. American firms are restricted from selling products to these companies without a special licence.

The Trump administration also prohibited US investors from purchasing securities from dozens of companies that had links to China’s military. Last week, the New York Stock Exchange delisted US-traded shares of China’s top three telecommunications companies – China Mobile, China Telecom and China Unicom – to comply with an executive order signed by President Donald Trump that bars Americans from buying shares in “communist Chinese military companies”.