U.S.-China Barometer 2020

John L. Graham & Ben Leffel

We began publishing the US-China Barometer back in 2011. That year the relationship between the two countries peaked in a positive way. True, both countries were still increasing both their carbon and military footprints. But beyond those two major shortcomings the record well demonstrated “the most synergistic bilateral international relationship in world history.” A sign of those heady times was the front-page photos of the Chinese honor guard greeting U.S. Defense Secretary Robert M. Gates in Beijing appearing in both the Los Angeles Times and the Wall Street Journal on January 11, 2011. Also, a sign of the conflicting opinions among Americans about China were the headlines that accompanied each: “U.S., China vow to boost ties” in the West Coast paper, and “China holds line, won’t commit to strategic talks with U.S.” representing the view from the East Coast.

Later in 2011 Mitt Romney began his presidential run, and prominent in his campaign quiver was the familiar Republican xenophobic bashing of China, the primary complaint then being their currency manipulation. Indeed, you can see the consequences of Romney’s rhetoric reflected in the data strings presented in the Barometers over the years. Public opinion in both countries plummeted then.

In the 2020.5 version of the Barometer we now see in graphic detail the consequences of the great spasm of xenophobia and racism that is the Trump administration, poorly advised by former Merage School of Business colleague, Peter Navarro. The currency manipulation issue has faded away, and now we’re back to the 1999 Cox Report wolf cry of Chinese espionage (recall the unlawful persecution of Wen-Ho Lee in 2000), this time couched more as intellectual property (IP) theft. The most concise statement of this problem is the June 17, 2019 cover story of Bloomberg BusinessWeek, “How NOT to cure cancer: The U.S. is purging Chinese scientists in a new red scare.” At this point in time, half-way through 2020, you have to wonder how the current animosity will affect both the immediate search for COVID-19 relief and the long-term world peace. Please see the pertinent evidence on this topic In our Harvard Business Review article: https://hbr.org/2019/11/is-china-actually-stealing-american-jobs-and-wealth.

We must note that both the Bush administration in 2001 and the current Trump administration were distracted by China conundrums of their own creation, only to miss the very real and known threats of our two hyphenated enemies, Al-Qaeda and COVID-19.

The 2020.5 Barometer is flashing dire warning signals in multiple areas:

1. In 2019 both overall US-China trade (that is, exports to one another) fell dramatically at double-digit rates.
2. The 2020 population pyramids predict domestic disruptions far into the current decade for both countries.
3. The response to COVID-19 was well managed in China and poorly so in the U.S.
4. Military spending reached historic heights in both countries in 2019.
5. The U.S. carbon footprint is moving up again while China’s remains stable, both at record heights.
6. China is rated less corrupt, but the U.S. is more corrupt than ever.
7. China’s FDI in the United States has declined steeply.
8. Both nations have given up on WTO mediation of trade disputes.
9. Americans’ public opinion of China has plummeted, and China stopped responding to the PEW Research study of Chinese public opinion of the U.S.

Meanwhile, three important positive markers can also be seen in the Barometer:

1. The average income of citizens in both countries continued its steady increases in 2019.
2. Joint U.S. Patent awards to invention teams including both American and Chinese citizens have resumed their healthy growth, and now total 18,210 in this century. Intellectual piracy rates also continued their downward trend in both countries.
3. While COVID-19 has crushed international trade worldwide, U.S. exports of goods to China have remained resilient, actually increasing 8% during the 2nd (COVID-19) quarter of 2020 compared to the same period in 2019. American exports of goods to the rest of the world fell 26% comparing the same time periods.

We deliver the Barometer as a 35-slide power-point presentation with interpretive notes (Click here for PowerPoint) (Click here for PDF) and the data sets imbedded (right click then choose “edit data”). Users and viewers are most welcome to adapt the presentation to their own purposes. Just don’t change the data.

We expect and seek your criticism so that we might improve the Barometer in future years. Please send your comments to John L. Graham at jgraham@uci.edu.

John L. Graham & Ben Leffel, August 11, 2020