The US dollar has long enjoyed a global status, but a turbulent 2020 combined with rising powers are challenging the de facto currency of the world.

The country’s biggest risk today is economic isolation from the rest of the world. It must continue to participate actively in the world economy and contribute what it can. Total self-sufficiency is possible for China only with a decline in its standard of living.

China’s leaders are currently putting the finishing touches on the country’s 14th Five-Year Plan, which will cover the 2021-25 period. But one aspect of the plan – the so-called dual-circulation strategy – is already attracting the world’s attention. Many fear that China is “turning inward” just when the global economy is staring down the barrel of a recession. These fears are misplaced.

The U.S. policy of digital decapitation makes it difficult to settle disagreements with China through compromise. The outrageous approach only hardens China’s will to safeguard the interests of its companies.

India and China have a long history of border disputes, which have heated up recently. Stacked interests between China, India, and Pakistan hold the region on a seesaw, and BRI and CPEC may benefit from the conflict and pandemic.

China’s Belt and Road Initiative is an ambitious endeavor that can be misunderstood as a facade for furthering China’s interests. While there is no doubt that China intends to help itself first, the BRI does create opportunities for governments to come together in equitable partnerships.

Despite taking a serious hit from COVID-19 lockdowns, China’s economy has proved resilient. It has not, however, fully bounced back: some activities, especially in the service sector, simply cannot be revived. Yet, unlike most of the world, China seems unlikely to become mired in a long recession, not least because of its rapid digital transformation.

Capitalism takes on different forms in different circumstances, with no exception to China. China’s capitalism, often termed state capitalism, is neither “deviant” nor “hostile,” but merely the latest in a string of state developmentalist projects that have engendered successful industrialization.

The phase one trade deal between China and the United States got a new lease on life, at least temporarily, by an online dialogue of senior officials. Now, action is needed on both sides to prevent a new meltdown.

Hainan’s attractive geography and proximity to major trade routes create a multitude of economic opportunities for China. A proposed free-trade port on the island could improve access to all it has to offer and create a potential economic boom.