Updated: October 19, 2020 12:48:16 pm
It could take until 2024 for the US economy to recover to pre-pandemic levels, the institute said. (Proceedings)
China is closing in on the United States as the most powerful country influencing the Asia-Pacific as the United States’ handling of the Covid-19 pandemic tarnishes its reputation, a study showed.
While the United States maintained its place as the region’s top superpower, its 10-point lead over China two years ago has been cut in half, according to the Sydney-based Lowy Institute’s Asia Energy Index for 2020, which ranks 26 nations and territories.
The United States “lost face” due to its poor response to the pandemic, multiple trade disputes and President Donald Trump’s moves to withdraw from multilateral agreements and agencies, according to Herve Lemahieu, head of research for the study and director of the Diplomacy Program. and Lowy’s Asian Power.
Read | With Covid-19 under control, China’s economy is moving fast
“The pandemic changed the rules of the game,” he said in a telephone interview. “It contributed to a double whammy of trouble for the US because, on the one hand, its mishandling of the Covid-19 crisis has resulted in a diminished reputation. And on the other hand, it will obviously take many more years to recover from the economic consequences of the pandemic. “
It could take until 2024 for the US economy to recover to pre-pandemic levels, the institute said. In contrast, China’s economy has recovered from the virus and is the only major economy forecast to recover in 2020. This could give it an advantage over its neighbors for the next decade.
China remained firmly in second place for the third year in a row, despite seeing a “notable drop” in diplomatic influence after facing accusations of withholding information about the severity of the Wuhan outbreak. Lemahieu also cited the wolf warrior diplomacy, rhetoric and more aggressive actions of the Beijing envoys, which contributed to that downfall.
A re-election of Trump in November would bring “more of the same” trends, he said. However, China would find it difficult to replace the US and become the undisputed dominant power in the region.
“I think it is more likely that China will eventually catch up with the United States and may, towards the end of this decade, even overtake the United States. But not significant enough to move forward with substantial margins, ”Lemahieu said.
“Asia will learn to cope without the United States if Trump wins a second term,” he added. “With [Joe] Biden, I think Asia will be much more willing to do business with the United States. “
India, the fourth most powerful nation on the index after Japan, lost economic growth potential in the pandemic and is also giving up strategic ground to Beijing. Lowy projects that India will reach 40% of China’s economic output by 2030, compared to the estimate of 50% last year.
“It certainly has delayed the arrival of India as the great power in the region,” Lemahieu said. “And it also means that India will be quite distracted by development challenges and the new poverty rate, with more recently impoverished people in South Asia.”
As many as 347.4 million people in the Asia-Pacific region could fall below the poverty line of $ 5.5 a day due to the pandemic, according to the World Institute for Development Economics Research at the University of The United Nations.
Overall, Asia’s economy, which was poised to become larger than the rest of the world economy combined in 2020, is now facing “a perfect storm of strategic, economic and public health challenges” due to the pandemic, according to the Lowy report.
Japan, ranked third, described in the report as a “smart power” for using limited resources to exert broad influence in the region, scored the most points in terms of its defense diplomacy, spanning from dialogues from a country’s defense to joint military exercises and acquisitions. arms, surpassing South Korea in this measure.
Russia, Australia, South Korea, Singapore, Thailand and Malaysia round out the top 10. The Southeast Asian nations on the list have been hit by political turbulence, but have managed to keep virus spikes in hand despite the limited resources, Lemahieu said.
Taiwan was one of the few places that gained relative power this year, along with Australia and Vietnam. Taiwan, in particular, improved its diplomatic influence score this year, after setbacks in 2019 when a handful of allies cut official ties as Beijing sought to isolate the island on the world stage.
Australia moved up one place to sixth place, beating South Korea. The country gained points in cultural and diplomatic influence due to favorable perceptions of its internal response to the virus, with daily infections down to a trickle. It also improved its economic relations score after this year it secured its fourteenth free trade agreement with neighboring Indonesia.
Apart from the United States, Russia and Malaysia posted the biggest losses on the index.
Russia took blows in its diplomatic influence and military capability scores and performed better on resilience measures thanks to “extensive resource security and well-established nuclear deterrent capability.”
The index measures power using 128 indicators that include economic relationships, defense spending, internal stability, information flows, and projected future resources.
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