According to several foreign media reports, after several days of stalemate in the 2020 U.S. presidential election, Democratic candidate Biden took the lead in winning Pennsylvania, winning more than 270 electoral votes needed to win. If there is no accident, Biden, 78, will become the 46th president of the United States in January next year. What kind of economic policies will he take to the stage? What is the difference between his economic policies and Trump's? Sort out and analyze them one by one, and outline another different America that Biden wants to bring to readers.
Biden, the Democratic presidential candidate, won 290 electoral votes over Pennsylvania and Nevada in the 2020 U.S. presidential election, surpassing the 270 needed to win, AP reported on November 7. According to the statistics of many American media, Biden has crossed the threshold of 270 electoral votes and won the 2020 presidential election. Then Biden tweeted to modify the certification as: President elect of the United States.
In addition, Biden Harris campaign said in a statement that Biden will deliver a national speech in Wilmington, Delaware, at 8 p.m. EDT on the 7th (9 a.m. Beijing time on the 8th).
Why Biden?
It's not just the polls, but the market thinks Biden has been in a good position in the campaign. It's not only the middle and low-income people who want to eliminate the gap between the rich and the poor, but Wall Street also supports Biden.
According to the Nikkei news, the securities and investment industry's political donation to Biden reached $74 million, more than four times the amount donated to trump. Although trump has achieved a large-scale tax reduction and so on, Trump's changeable policy operation is not welcomed by many people, and the market is more inclined to Biden's stability.
Jia Qingguo, director of Pangu think tank and director of the Sino American cultural exchange research base at Peking University, believes that the improper handling of COVID-19 on the COVID-19 issue has greatly affected the US economy. Compared with trump, Biden is mild in character, steady in work and standard in behavior. He represents the centrist and mainstream views of the United States, and is supported by many American institutionalists.
Xia Le, director of Ping An science and technology research department, said in an interview that Biden was able to win for the following reasons: first, the Democratic Party showed unprecedented unity. In the last election, there was a split within the Democratic Party, Hillary and Sanders split the two camps, leading to the division of votes. This time, not only did the Democrats unanimously support Biden, but many of the organic Republicans also turned to support Biden. It can be seen that Biden's strength is very strong this time. Secondly, different from the last election, the major media, regardless of factions, did not report negative information about the two candidates. Thirdly, in the last election, trump was still a political newcomer, which added a lot of points to him at that time, but this image no longer exists.
What difference will Biden's election make?
Wang Dan, chief economist of Hang Seng Bank in China, said that if trump had been in office, the United States would be more like a white America; if Biden was elected, the United States would be the United States of the people of the world, because he would welcome immigrants and advocate cultural diversity. However, it is not necessarily better for the United States to have a leading position and influence in the world. It is mainly due to differences in values. To be sure, Biden will lead the United States in different directions.
Jia Qingguo believes that if Biden takes office, there may be three changes: first, Biden may take more scientific measures to take more effective measures to stop the spread of COVID-19, so that the economy can recover earlier. Second, Biden will change Trump's unilateralism and strengthen cooperation with his allies; third, Biden advocates strengthening guidance, coordination and cooperation on global governance, which will help maintain the leadership and influence of western countries, especially the United States, in the international arena.
Biden's economic policy
What are the specific differences between Biden's economic policy and Trump's?
In terms of Taxation, Biden's economic policy aims to narrow the income gap, and its financial source is a large-scale tax increase on enterprises and the rich class. It is estimated that the tax increase will exceed US $4 trillion in 10 years, and the scale of tax reform is close to three times of the "trump tax cut" (US $1.5 trillion). In addition, Biden also plans to strengthen the tax on stock and real estate transactions, which will inevitably have an impact on the market according to the system design.
Wang Dan said in an interview that Biden's current tax policy is to increase taxes for the rich, but according to past experience, I'm afraid the middle class and above need to increase taxes. This may slow down domestic economic growth in the United States. In contrast, Trump's policy is to reduce taxes to regulate, which is relatively more conducive to supporting domestic economic growth. As for the supervision of the financial system, trump has removed the corresponding regulatory policies in the past few years. If Biden takes office, the life of banks and financial markets will not be as good as before.
In terms of infrastructure, Biden promised to invest $2 trillion in renewable energy and infrastructure over four years. It is estimated that if the increase of social security fee is added, the increase of fiscal expenditure will reach 10 trillion US dollars in 10 years. Wang Dan believes that Biden's policy is very similar to China's, advocating new energy materials and future oriented application of environmental protection related science and technology. The growth model of the United States will be more and more in the direction of green economy.
In terms of trade policy, Xia Le said that Biden's trade policy will be more directional after he takes office, and it is very likely to strengthen the relationship with allies, rather than implementing trade protectionism in an all-round way like trump. Biden is still likely to ask China to further open its market, protect intellectual property rights and so on. At present, the global economy is in a disadvantageous situation. If the United States levies taxes on some countries and affects international trade, it may not have such a high tolerance. Biden may be more astute in calculating which tariffs will be harmful to the United States, which tariffs will be beneficial to the United States, which tariffs can be maintained, and which tariffs may be reduced. This is a difference.
In terms of climate policy, according to Charlotte, Biden believes that there is a lot of room for cooperation in the relationship with China, the biggest of which is the issue of global warming. China also hopes to work with the United States on these common issues to ensure a stable bilateral relationship. As long as there is an opportunity for cooperation between the two sides, there will be a lot of room and the current tension will be eased.
In addition, strengthening the supervision of large IT enterprises is also the focus. Under the trump administration, the U.S. Department of justice recently sued Google for violating the antitrust law. The Democratic Party is considering splitting businesses such as Facebook and Google. According to the changes in the power pattern of the White House and the US Congress, large IT enterprises will face a strong headwind.
Besides the president, it's Congress
The term of office of the president of the United States is four years, that of members of the house of Representatives is two years, and that of members of the Senate is six years. In the general election held every four years, voters elect not only the president, but also all members of the house of Representatives (435 seats in total, the Democratic Party holds a majority of 232 seats at present), and one third of senators (100 seats in total, the Republican Party holds a majority of 53 seats at present, and this year 33 senators change office).
Financial markets have been expecting Biden's victory and a "blue wave" of Democratic majorities in the house and Senate. The Democratic Party has proposed a new round of fiscal stimulus of US $2-3 trillion, and the market is strongly looking forward to starting it as soon as possible.
And Republicans are strong in the Senate election. Since the election, both parties have reached a tie in the Senate, with 48 seats. In addition to the two seats in Georgia, the Republican incumbents in North Carolina and Alaska are currently in the lead, and the final votes are still in the statistics.
Next, there may be two situations: Biden + Democratic Senate / Democratic House of Representatives; Biden + divided Congress, Biden + Republican Senate / Democratic House of Representatives.
According to the analysis of CICC's research department, in the first case, the Democratic Party is expected to promote the U.S. economic recovery through large-scale fiscal stimulus, including unemployment relief, environmental protection and new energy, infrastructure, etc. However, the Democratic Party will also push for an increase in corporate income tax from 21% to 28%, an increase in capital gains tax, and an increase in personal income tax rate for high-income groups, thus partially offsetting the fiscal stimulus effect; Externally, Sino US relations are expected to shift from the "decoupling" of the trump administration to a less bad situation of intensified competition. As a result, the world, especially the emerging economies, is expected to share the spillover effect of the recovery of us demand, resulting in a global recovery resonance.
In the second case, internally, the Democratic Party can not achieve much, neither can it introduce fiscal stimulus nor tax measures; externally, Sino US relations are expected to shift from "decoupling" to a less bad situation of intensified competition.
In either case, Sino US relations are likely to ease.
Jia Qingguo, a consultant to Pangu think tank and director of Peking University's research base for people to people and cultural exchanges between China and the United States, believes that if Biden comes to power, his China policy is likely to emphasize competition as well as cooperation. Cooperation should include at least five aspects: first, to emphasize fair trade and investment, no longer to increase tariffs; two, to restart dialogue and consultation; three, to carry out bilateral cooperation in areas with common interests, such as cooperation to deal with COVID-19; four, to avoid over security of China's folk exchanges, and to continue to encourage Chinese students to study in the United States. Fifthly, it advocates multilateral cooperation to jointly cope with global challenges.