Biden said at a political fundraiser Thursday that “China is in trouble” because growth has slowed and the number of people in retirement age outnumber those of working age.
“It has the highest unemployment rate going,” Biden told donors in Park City, Utah. “So they got some problems. That’s not good because when bad folks have problems, they do bad things.”
The comments are some of the most alarming yet that Biden has made about the US’s chief geopolitical rival. The president has sought to walk a fine line between deterring China’s malign economic practices and aggression in the South China Sea, while achieving a diplomatic rapprochement with Chinese leaders and put a floor under relations.
Biden said Washington isn’t looking for a fight with Beijing but is closely watching its activities. For example, he dubbed China’s so-called “belt and road” infrastructure finance initiative “debt and noose” because of the terms countries must accept in exchange for the money.
The Biden administration this week released a long-awaited order curbing US investments in China, but the policy was pared back from initial drafts amid the president’s efforts to improve ties with the Chinese government.
China’s economy was expected to soar in 2023 after the country lifted its Covid-19 protocols, which were among the strictest in the world. Instead, the country’s $18 trillion economy is facing challenges across the board, such as weakening consumer spending, slowing exports, high youth unemployment and a slumping property market highlighted by a debt crisis for Country Garden Holdings Co.
Once the country’s largest private-sector developer by sales, the company is in danger of defaulting amid an industry cash crunch. Investors are already pricing in a likely default, and Country Garden was downgraded three notches Thursday by Moody’s Investors Service.
China’s gross domestic product grew at a slower-than-expected pace of 5.5% in the first half of the year, compared with a year earlier. Much of the world’s production depends on China, leading to worries about ripple effects for the global economy.
The problems also come at a delicate time as the US is working to “de-risk” from Beijing, finding ways to reduce its reliance on Chinese supply chains and challenge the country’s dominance in areas like green technology and semiconductors.
Beijing has seen Biden administration efforts to restrict critical technology investments as moves to contain and isolate the country as it deals with a slowing economy, undercutting US efforts to reset the relationship after a rocky stretch.
A series of incidents in recent months — including an alleged spy balloon and military encounters in the South China Sea — have heightened tensions between the two countries.
Several high-level US officials have traveled to Beijing recently to smooth relations, including Treasury Secretary Janet Yellen, Secretary of State Antony Blinken and climate envoy John Kerry.
Commerce Secretary Gina Raimondo is also slated to visit later this month. But those visits have yet to deliver significant public results beyond the two sides agreeing to further dialogue.