Beijing's Pain Points 2 (Glance from mid-2020)

DOI: 10.20542/0131-2227-2021-65-1-70-81
V. Mikheev (,
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation;
S. Lukonin (,
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation

Abstract. In China, the topics of pandemic and economic recovery gradually lose their importance and give place to another deterioration in U.S.–China relations due to pressure from the United States on Hong Kong, Xinjiang Uygur Autonomous region, and the insufficient, according to the American side, pace of implementation of China’s first phase of commercial transactions with the United States. Beijing takes Washington’s threats to deprive Hong Kong of the status of a special customs territory in trade and economic cooperation with the U.S. quite seriously. However, Chinese experts note that the implementation of these threats will not lead to the collapse of the Hong Kong economy, since the most-favored-nation regime applies to about 5% of Hong Kong’s exports to the United States. At the same time, Beijing is trying to find an alternative to Hong Kong as a financial center in the face of Macao. However, the main characteristics of the Macao economy do not yet allow us to seriously talk about a full-fledged replacement, since most of the GDP of this special administrative region is formed by the gaming, tourism and restaurant industries. To a certain extent, the “position” of Hong Kong is claimed by Shanghai, but the extent of its claims is limited by the Chinese legal system, which is less flexible and liberal than that of Hong Kong. In May 2020, the so-called “Two sessions” were held in Beijing: the national Committee of the People’s Political Consultative Council of China (CPPCC) and the National People’s Congress (NPC). The latter presented a report on the government’s work in 2019 and the first quarters of 2020. The report contains the main guidelines and targets for the country’s socio-economic development for the current year, as well as a list of measures to support the economy in the so-called “post-crisis” period. Most of the mechanisms for stimulating growth are of a fiscal nature: the authorities do not want to inflate the amount of debt owed by public and private companies too much, and they go, first of all, for tax breaks. At the same time, the Central budget deficit is expected to increase to 3.6% due to reduced tax revenues because of quarantine measures and increased government spending to support consumer demand. At the same time, Beijing announced a reduction in spending by the central and provincial governments on “unimportant” and “non-priority items”: construction of buildings, business trips, celebrations, etc. The report on the government’s work reflected the desire of the Chinese leadership to accelerate the ongoing work on “launching” a new economic model of China’s development, aimed not at achieving high growth rates, but at quality indicators. For the first time, the NPC session did not specify the expected GDP growth rate in 2020. However, the main characteristics of this model have not yet been fully clarified. In the first approximation, it is a bet on the production of high-tech products, the implementation of traditional infrastructure projects within China and the expansion of domestic consumption – while maintaining the strategy of going outside in the format of the “Belt and Road” (or the “Silk Road Economic Belt”). The so-called “separation” of China and the United States in the financial and economic spheres, which is widely discussed in the world press, has not yet taken place. D. Trump’s “return of American business to the United States” is not yet perceived by the American private business itself, which is interested in expanding its presence in Chinese financial and other markets. China, for its part, by opening previously closed sectors of its economy is trying to provide new business opportunities to American companies in a “compromise” way, in contrast to military and political issues, where Beijing acts extremely harshly. In Russian-Chinese relations, there is still a trend to deepen strategic partnership in the military-political sphere and, if possible, in the economy – taking into account the negative consequences of the pandemic and adjusting for the scale of the Russian economy.

Keywords: world economy, China, USA, “trade war”, “trade deal”, Hong Kong, Russian-Chinese relations


  1. Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (In Chin.) Available at: (accessed 01.08.2020).
  2. The Chinese Communist Party’s Ideology and Global Ambitions. Available at: (accessed 02.08.2020).
  3. Chinese authorities have called the condition of participation in negotiations on nuclear weapons. TASS, 08.07.2020 (In Russ.) Available at: (accessed 02.08.2020).
  4. S.3744 – Uyghur Human Rights Policy Act of 2020. Available at: (accessed 20.07.2020).
  5. Report on the work of the government. Russian.people. com, 05.06.2020. (In Russ.) Available at: (accessed 20.07.2020).
  6. Jagannath P. Panda. India, the Blue Dot Network, and the “Quad Plus” Calculus. Journal of Indo-Pacific Affairs, 2020. Available at: (accessed 25/07/2020).
  7. Five Eyes Alliance: Everything You Need to Know. Business Leader, September 20, 2019. Available at: (accessed 20.08.2020).
  8. Ezekwesili O. Aid is no longer enough: China must pay Africa for pandemic damages. The Globe and Mail, April 17, 2020. Available at: (accessed 25.08.2020).
  9. Latin America seeks Chinese medical aid to fight coronavirus. Brazilian Report, April 12, 2020. Available at: (accessed 15.08.2020).
  10. S.1731 – United States-Hong Kong Policy Act of 1992. Congress Gov. Available at: (accessed 20.08.2020).
  11. Lardy N.R. Trump’s latest move on Hong Kong is bluster. PIIE, June 1, 2020. Available at: (accessed 10.08.2020).
  12. The Central Committee of the Communist Party of China and the State Council issued the “Outline of Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area” (In Chin.) Available at: (accessed 21.08.2020).
  13. Huang T. China thinks Macau can replace Hong Kong as an international financial hub. PIIE, May 29, 2020. Available at: (accessed 01.08.2020).
  14. Preliminary Accounting Results of GDP for the Second Quarter and the First Half Year of 2020. National Bureau of Statistics of China, June 17, 2020. Available at: (accessed 21.08.2020).
  15. Build a well-off society in an all-round way (In Chin.) Available at:全面建成小康社会 (accessed 20.08.2020).
  16. China has new US $1.4 trillion plan to seize the world’s tech crown from the US. South China Morning Post, 21.05.2020. Available at: (accessed 01.08.2020).
  17. Xi Jinping presided over the meeting of the Standing Committee of the Political Bureau of the Central Committee. Analyzed the situation of prevention and control of the new crown pneumonia epidemic at home and abroad (In Chin.) Available at: (accessed 20.07.2020).
  18. Lardy N.R., Huang T. Despite the rhetoric, US-China financial decoupling is not happening. PIIE, July 2, 2020. Available at: (accessed 30.07.2020).
  19. 2020 Business Climate Survey. AmChamChina. Available at: (accessed 15.08.2020).
  20. Schott J., Chorzempa M., (Lucy) Lu Zh. Investment from China into the United States Has Fallen to Nearly Zero. PIIE, May 21, 2019. Available at: (accessed 20.08.2020).
  21. Matthews Ch. Bill that could delist Chinese companies from U.S. stock exchanges to see “swift passage” in House, analyst says. Capitol Report, May 21, 2020. Available at: (accessed 14/08/2020).
  22. S.945 – Holding Foreign Companies Accountable Act. Congress Gov. Available at: (accessed 12.08.2020).

Registered in System SCIENCE INDEX

For citation:
Mikheev V., Lukonin S. Beijing's Pain Points 2 (Glance from mid-2020). World Eonomy and International Relations, 2021, vol. 65, no. 1, pp. 70-81.

Comments (0)

No comments

Add comment






Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies


Current Issue
2024, vol. 68, No. 2

Topical Themes of the Issue:

  • Fiscal Policy of Advanced Economies: Playing by the Rules?  
  • Iranian Development Model: State and Society Concept, Crises and Problems
  • Afghan-Pakistan Relations: Problems and Challenges in XXI Century
  • Climate Issues under Changing Geopolitical Conditions
Submit an Article
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.