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Illustration: Liu Xidan/GT

Just days after Chinese electric vehicles shone at IAA Mobility in Munich, European Commission President Ursula von der Leyen announced the anti-subsidy investigation into Chinese electric vehicles. She claimed Chinese EVs are cheaper because of heavy government subsidies. "Europe is open for competition. Not for a race to the bottom," she said. 

This is not true.  

China had ended all EV subsidies by 2022, while European carmakers still enjoy fiscal support from the government including tax benefits and incentives. Those Chinese companies who have come out ahead in Europe have survived fierce competition at home. UBS analysts concluded that, after an extensive assessment of all the components pulled from BYD's Seal model, 75 percent of the auto parts, ranging from batteries to power semiconductors, were made in-house. BYD enjoys a sustained 25 percent cost advantage over legacy competitors. 

Chinese EVs have won the market with advanced technology, integrated supply chain and scale effects. It is innovation which helps bring down the price and makes products more competitive. Chinese EV producers can compete in Europe without artificially keeping the price low because the European price of their cars is significantly higher than the Chinese price. And the European price of Tesla's Model 3 is even lower than BYD's Seal. 

The Chinese EV industry has got to where it is today thanks to consistent commitment to openness, innovation and hard work. Strangely enough, the EU, a champion of free market and open trade since its birth, has chosen to close its door. China Chamber of Commerce to the EU issued a statement, urging the EU to translate its commitment to market openness into tangible measures, ensuring a fair, impartial and non-discriminatory business environment for foreign companies. 

Welcoming Chinese carmakers to Germany just a week ago, German Chancellor Olaf Scholz said, "Competition should spur us on, but not scare us." However, the EU seems pretty scared, given all the restrictive measures and endless talks of risk and de-risk. With all the "risks" from different values, dependencies, and so on, decision-makers in Brussels are labeling competitive foreign cars as risks. 

When European companies are ready to improve themselves and face the competition, European leaders are taking a different path. As far as a spokesperson for the German Association of the Automotive Industry is concerned, an anti-subsidy investigation cannot solve the existing challenges. More importantly, European consumers will be deprived of high-end, lower-price vehicles due to their leaders' protectionist choice.  

If the EU is truly open to competition, it should encourage automakers of the two sides to cooperate. Taking protectionist actions violates WTO rules, hurts consumers' interests, and most unfortunately, shows a lack of will to improve. There is more than one way to be competitive and ultimately defend one's interests, such as innovating, simplifying rules, etc. But protectionism is never the right choice. It will not produce excellence, but start a race to the bottom. 

In June of this year, Hardeep Singh Nijjar, a prominent Sikh leader as well as a Canadian citizen, was shot dead in Canada. Canada recently accused India of being involved in the assassination and kicked out an Indian diplomat, who Foreign Affairs Minister Mélanie Joly described as the head of the Indian intelligence agency in the country. In response, India promptly announced that it had expelled a senior Canadian diplomat based in India, rejecting Canada's allegations and calling them "absurd and motivated."

In recent years, disputes between India and Canada have been centered around the Sikh community in Canada, which opposes the Modi government and advocates for Sikh rights. The Sikh community is a minority ethnic group in India with a population of just over 20 million. In Canada, which is one of the largest immigrant settlements for Sikhs worldwide, the Sikh community wields significant political, commercial and economic influence. The resurgence of the separatist Khalistan movement in recent years has become a major point of contention between India and Canada, severely impacting their bilateral relations. The ongoing tussle between the two countries has put India-Canada relations further at stake.

Observers generally believe that the lack of a meeting between Canadian Prime Minister Justin Trudeau and Indian Prime Minister Narendra Modi during the G20 summit in New Delhi is a signal of danger in the relationship between the two countries. Now, both countries are escalating mutual accusations and expelling diplomats, further exposing the vulnerability of the so-called value-based alliance system led by the US.

Western countries claim to be defenders of human rights and often criticize other nations for their human rights issues. Their praise for India's so-called "democracy" is primarily driven by geopolitical interests and the desire to include India in their anti-China alliance. Western elites are well aware of the substantial differences between India's so-called "democracy" and their own. Many individuals in the West do not support India's religious and minority policies.

Qian Feng, director of the research department at the National Strategy Institute of Tsinghua University, told the Global Times that the West, especially the US, in recent years has been waving the banner of common values of democracy and freedom, attempting to develop comprehensive cooperation with India in order to contain China. They are willing to turn a blind eye to what they think are India's human rights abuses and infringement on domestic ethnic minorities, which exposes the hypocrisy of the Western alliance with India based on their so-called common values.

Noticeably, whether Westerners genuinely consider India as a democratic country like themselves is questionable. It's just that currently India is useful to Westerners, so they take advantage of the situation, said Zhao Gancheng, a research fellow from the Shanghai Institute for International Studies.

As a key member of the Western alliance and a long-standing ally of the US, Canada has played an important role for the US in establishing a so-called rules-based international order and promoting its Indo-Pacific Strategy. However, the alliance currently being formed by the US, including India, is facing increasing embarrassment. This once again demonstrates the vulnerability of the US in building such alliances and the inappropriateness of ideological alliances in the context of the development trends of the times, neglecting the diversity of national interests. Both India and Canada have expelled senior officials from each other, and if the India-Canada relationship continues to deteriorate, the US might quickly step in to "mediate." After all, for the US, intervening in Canada's affairs is a familiar and easy task.

Editor's Note:
Over the past decade, the Belt and Road Initiative (BRI), following the guiding principle of extensive consultation, joint contribution and shared benefits, has grown into a global platform where countries participating in it work together to promote people's well-being and give a further boost to global development.

As the BRI celebrates its 10th anniversary, Global Times reporters Yin Yeping, Wang Wenwen and Ma Mengyang interviewed diplomats and scholars to learn about achievements of the cooperation in Greece, Hungary and Serbia over the past decade and their expectations for high-quality BRI construction in the next decade.

Xiao Junzheng, Chinese Ambassador to Greece
The ancient Greek philosopher Aristotle once said, friendship is a single soul dwelling in two bodies. China and Greece are comprehensive strategic partners with a history of friendly exchanges dating back thousands of years. In the 51 years since establishing diplomatic relations, both countries have fearlessly navigated the changing international landscape.

China and Greece have consistently upheld the spirit of mutual respect, equality and mutual learning, engaging in fruitful cooperation. The two countries have become an exemplary model of peaceful coexistence and win-win cooperation between nations of different scales, systems, national conditions and civilizations.

With the joint efforts of both China and Greece, the mutually beneficial cooperation between the two countries has yielded fruitful results.

Since China COSCO Shipping took over the management of the Piraeus Port, the port has experienced a remarkable transformation. The container throughput has grown from 880,000 twenty-foot equivalent unit (TEUs) in 2010 to over 5 million TEUs today, making it a leading port in the Mediterranean.

This development has directly created over 3,000 job opportunities for the local community and indirectly generated more than 10,000 additional jobs.

In the future, China and Greece can further strengthen their commitment to the comprehensive development plan for Piraeus Port, enhance cooperation in customs trade and facilitation of clearance procedures, advance the construction of port logistics parks, and make new contributions to maintaining the stability of the China-Europe industrial and supply chains, promoting economic integration in the Balkans, and advancing the EU integration.

The concept of green development is increasingly being reflected in the cooperation projects between the two sides.

Chinese-produced new energy vehicles have successfully entered the Greek market this year. China and Greece have strengthened their strategic alignment in technology development under the framework of the China-Greece Joint Committee on Science and Technology Cooperation and the Belt and Road Science, Technology and Innovation Cooperation Action Plan.

Simultaneously, both China and Greece should continue their efforts in strengthening mutual cultural exchange and learning. Perseverance in this endeavor will serve as a lasting example of cultural exchange and mutual understanding for the world. Together, both sides can draw upon the wisdom of ancient civilizations to seek solutions for contemporary challenges.

Throughout Greece's successive governments, there has been a strong emphasis on fostering relations with China. Following the re-election of the New Democracy Party government, they have continued to support both the co-development of the BRI and cooperation between China and Central and Eastern European countries.

I believe that in the future, under the guidance of the high-quality construction of the BRI, both sides will further promote the realization of China's modernization model and Greece's enhancement of its national competitiveness. Together, both sides will nurture new areas of cooperation such as green development and the digital economy, bringing greater prosperity to the people of both countries.

Norbert Csizmadia, a Hungarian expert in economic strategy
As a member of the EU, Hungary is the first country to bridge the gap between the West and the East. We place significant emphasis on fostering strong cooperation not only in terms of investments and infrastructure development but also in technology, culture, education and green financial initiatives. We are focused on the future with more connectivity.

There are six key areas of economic cooperation between China and Hungary, with a particular emphasis on collaboration within the Belt and Road Initiative. This focus has not only been prominent in recent years but will continue to be a priority. We believe that the era of Eurasia has arrived and consider it a crucial direction for the future. Furthermore, we firmly believe in peaceful and harmonious cooperation.

If we examine the global construction based on geographical divisions, it becomes evident that we are living in a multipolar world order. China is more and more important. For instance, in 2019, 49 percent of global economic growth was attributed to China and Southeast Asian countries, and China alone accounting for over 30 percent of global economic growth. Looking at a map of China, one can observe the geographical stretch from Beijing to Shanghai shares similarities with Central and Eastern European countries -- from the Baltic area to the Adriatic Sea. This underscores the ongoing focus on the same geographical regions, particularly the small countries within Central and Eastern Europe.

Hungary has a population of around 10 million, which is comparable to that of a single Chinese city. The importance of cooperation cannot be understated. The collaboration between Central and Eastern European countries and China spans over a decade, encompassing diverse fields such as education and investments. Hungary maintains robust political stability, unlike some other countries which have disengaged from Chinese cooperation in the past two years. While political changes have occurred in certain nations, Hungary has maintained a consistent direction for over 13 years, especially in terms of its objectives. I believe this political stability serves as a powerful force for the future.

Katarina Zakic, head of the Regional Center "Belt and Road" in Belgrade, the Institute of International Politics and Economics
Since the beginning, it was very clear that the BRI is something extraordinary that doesn't happen every day. We knew that it would be a huge project and a huge undertaking by China, to develop it and to fund it.

This year marks its 10th anniversary. When we look at the results, they are really impressive. Regarding the investments, we are reaching $1 trillion. What other countries have invested so much in one project throughout a 10-year period? Most projects don't even last 10 years. Around 40 million people worldwide do not have the burden of extreme poverty in which they were living before these projects.

In general, China has achieved excellent results. We are impressed by the results in transportation infrastructure and especially the types of the countries in which they were conducted. Those were the countries that needed those infrastructure projects. One of the reasons that I have always been extremely grateful for this project is China's idea that each country should nominate the project it wants to conduct. And we would very much appreciate China's assistance in those regards.

Serbia is in Europe, but it's not an EU member. This is our strategic situation, because for many years, we are still trying to become an EU member. Our cooperation with China and the successful results are partially due to this fact that we are not an EU member. If we were a member the politics within the European Union would affect our relations with China.

We have comprehensive cooperation with China. We have relations on very high political levels. We have signed with China the comprehensive strategic agreement. We also have excellent cooperation on an economic level, especially regarding the loans and the investments that we have, not only throughout the BRI, but also throughout the China-Central and Eastern Europe cooperation framework.

Not only political and economic relations are on a high level, but also people-to-people and cultural relations are on a very high level. All these elements help Serbia become the pillar of China's projects and China's relations in the Western market. Serbia didn't have any kind of suspicions or negative reactions toward deepening our cooperation. Each government, starting from 2008, just built up that operation. We are in a way complementing each other. We respect each other's policies. Even in some cases when we have some kind of problem, for example, on an economic level or regarding the investments, there was always an understanding that we should speak about the problem and resolve it. In this way, within the Balkan countries, we are distinct.

A cross-party delegation of six Australian lawmakers started their four-day visit to the island of Taiwan on Monday. At this critical juncture when China and Australia are endeavoring to improve their strained ties, the provocative behavior of Australian lawmakers is a test for Australian Prime Minister Anthony Albanese.

Looking back over the past three years, China-Australia relations have transitioned from a frozen winter to a warm spring, although each step has come with its ups and downs. China and Australia held a high-level dialogue earlier this month. The Australian government has recommenced the visa process for Chinese group travelers. China has dropped anti-dumping tariffs on Australian barley imports. Albanese will also reportedly pay a visit to China later this year. These series of positive signals are a result of the bottoming out of bilateral relations after being damaged by the previous Morrison government.

Currently, the mutual trust between the two countries is still somewhat fragile, and the thawing of relations without trust can hardly be sustained. If China and Australia join hands, the improvement of ties is foreseeable, but if one side intentionally obstructs the process, it may add hurdles to this process.

By playing the Taiwan card, these MPs aim to create troubles in bilateral relations, seek international attention and gain political capital.

Qin Sheng, executive research fellow at the Center for Australia, New Zealand and South Pacific Studies, Chinese Academy of Social Sciences, told the Global Times that Taiwan could only get a rubber cheque from these MPs. Although Taiwan said that the visit demonstrates Australia's support for the island as well as its contribution to peace and stability in the Indo-Pacific region, this rhetoric does not change anything.

"The Taiwan visit will only bring embarrassment to the Albanese government, because it could disrupt its configuration of China policy. Since Albanese took office, his China policy has been somewhat consistent without many twists and turns. But there are still unresolved issues between China and Australia, such as the wine dispute. China is unlikely to discuss this issue with Australia against the backdrop of Australian MPs' Taiwan visit," said Qin.

Qin added that this shows that Albanese's China policy could be jeopardized by party politics to some extent. This makes it hard for Albanese to make a stance toward this matter - he does not want to displease these politicians in his country, but he does not want their behavior to impede the positive trend of China-Australia relations either said Qin.

Chen Hong, director of the Australian Studies Centre of East China Normal University, believes that the visit to Taiwan by these MPs can easily be considered the official behavior of the Australian government by the outside world, which deserves vigilance of the Albanese government. 

"If Albanese truly wants to mend ties with China, he should oppose, condemn and then rein in the rogue behavior of MPs visiting Taiwan," Chen told the Global Times.

Any country that engages with China knows that the Taiwan question is about China's sovereignty and territorial integrity and the first red line that must not be crossed. On the Taiwan question, Australia once followed the US closely to provoke China. In 2021, then Australian defense minister said it would be "inconceivable" for Australia not to join the US should Washington take action to defend Taiwan, and Home Affairs Department Secretary Mike Pezzullo warned drums of war are beating. Australia had stepped into the strategic pathology of "sacrificing its own interests in exchange for the interests of the US." With Washington's playbook in hand, Canberra often thought of its China policy on behalf of Washington, but it turned out that Australia's national interests do not equal those of the US. The more dedicated and loyal Canberra is, the more it will be placed at the position of a stepping stone. In matters that concern China's core interests and Australia's future, the Australian government has no room for mistakes. 

"Australia must firmly reject being instrumentalized or even weaponized by the US," said Chen, adding that Albanese and his team should continue with their rational China policy.

Failed containment.Illustration: Liu Rui/GT

On Saturday, Al-Qassam Brigades, the armed wing of the Islamic Resistance Movement (Hamas), launched a large-scale surprise attack on Israel, resulting in a significant number of casualties and penetrating multiple military bases and Israeli settlements. Israel immediately declared that Israel is now "at war" and vowed to "take revenge" on the Hamas militants. This event is undoubtedly the most serious conflict between Israel and Palestine in over a decade, with both sides trapped in a vicious cycle of violence, jeopardizing the fragile geopolitical stability in the Middle East.

The re-eruption of the Israel-Palestine conflict is regrettable, and both sides bear responsibility. Israel's illegal occupation of Palestinian territories and its refusal to accept the "two-state solution" serve as the root causes of the conflict. However, new dynamics in the Palestinian, regional and international situation have acted as the trigger for this latest outbreak.

Firstly, Hamas launched the attack in retaliation for the hardline policies and extremist actions of Israel's far-right government against the Palestinians. Since the Netanyahu government came to power, it has consistently challenged the Palestinian redline and ultimately fueled Palestinian anger. Hamas named this military operation the "Al-Aqsa Flood," highlighting its religious significance and revengeful intent.

Secondly, Hamas sought to counter the marginalization of the Palestinian issue. Recently, Saudi Arabia has been negotiating a "normalization" deal with Israel and has come close to an agreement brokered by the US. Saudi Arabia holds a prominent position in both the Arab and Islamic worlds, and once it establishes diplomatic relations with Israel, the Palestinian cause is likely to be greatly impacted.

Furthermore, Hamas aimed to maintain its leadership position in the armed resistance movement of Palestine. In recent years, Palestinian armed resistance has been led primarily by emerging small-scale militant groups like the "Lions' Den" in the West Bank, challenging Hamas' leadership among Palestinians. It was necessary for Hamas to defend its leadership position through a major, attention-grabbing attack.

Lastly, the economic situation in the Gaza Strip was on the brink of collapse, motivating Hamas to seek a way out for survival. 

Judging from the background of the incident, it is clear that the US also has a looming presence and certain responsibility in the bloody conflict.

First of all, the US abandoned justice by supporting Israel in its conflict with Palestine and condoning Israel's behaviors, which eventually led to this tragedy. Since the beginning of this year, the US, which claims to be the mediator for peace in the Middle East and the most important ally of Israel, has not fulfilled its obligation to promote justice and prevent tensions from escalating. Instead, it has become an accomplice in stirring up the conflict between Palestine and Israel.

Second, the Biden administration has chosen a time like this to desperately push for the normalization of relations between Saudi Arabia and Israel, with the main purpose of boosting Biden's votes in next year's election. It has been acting poorly in Middle East affairs. Therefore, the Biden administration is trying to expand the results of the Abraham Accords to highlight the "fruits of peace" in the Middle East. However, such a "peace in the Middle East" that the US has been showing off has led to an unprecedented threat to the survival of the Palestinians and ultimately led to a bloody conflict. The current escalation of tensions and violence proves that a Middle East peace plan without the two-state solution will only intensify conflicts and hinder peace.

Finally, the US has its own intentions by pushing to improve relations between the Arab countries and Israel - to establish a new political and military alliance against Iran, enhance its ability to control the situation in the Middle East, and, take a longer view, to try to create a coterie to marginalize China's influence in the Middle East.

The "peace" promoted by the US in the Middle East is likely to bring more divergences, contradictions and conflicts to the region. If the US continues to have a bias toward Israel, it will lead the peace process in the Middle East astray, and the Israel-Palestine conflict will recur once and again, while peace in the Middle East will become only castles in the air.

At the invitation of Member of the Political Bureau of the CPC Central Committee and Foreign Minister Wang Yi, Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy and Vice-President of the European Commission, will pay a visit to China. The two sides are expected to discuss bilateral relations as well as foreign policy and security issues. The visit comes as the EU seeks to reduce its reliance on China while maintaining ties with the world's second-largest economy. 

Recently, the EU formally launched an anti-subsidy probe into electric vehicles (EVs) manufactured in China. The anti-subsidy investigation is arbitrary, without adequate evidence to sustain it, and not in compliance with pertinent WTO regulations, which is adversely impairing the rights of Chinese companies. If Borrell's intention is to explain the EU's actions, he might be disappointed. 

Gao Jian, the director of the Centre for European Studies at Shanghai International Studies University, told the Global Times that the EU chose to "de-risk" when it realized that it was not able to achieve the decoupling that the US has been touting. Cui Hongjian, a professor with the Academy of Regional and Global Governance at Beijing Foreign Studies University, believes that the EU wants to re-establish its prestige by talking about de-risking. 

However, there are still disagreements within the EU regarding "de-risking," making it difficult for the bloc to reach a consensus. 

Take the anti-subsidy probe. The rapid development of Chinese EVs is not entirely seen as a "risk" for the EU. Some countries think that the rapid growth of Chinese EVs in Europe could potentially threaten the European EV industry. However, Germany, for instance, has a long-term cooperation in the EV industry with China. German Chancellor Olaf Scholz has poured cold water on the EU's anti-subsidy investigation, warning against taking protectionist actions that could harm domestic industries.

In fact, the EU has failed to recognize the true source of the "risks" it is facing. Since the US provoked the Russia-Ukraine conflict, it has been reaping the wealth of the EU in terms of weapons and energy, causing many EU members to fall into an economic crisis. It is not China but the US that has caused real economic damage to Europe, according to Gao. Gao noted that the so-called risks the EU attributes to China are actually caused by their close ally across the Atlantic and the EU is simply replicating the US model of "decoupling with China" without knowing its own demands.

China has always attached great importance to the development of bilateral relations with Europe based on equality and mutual benefits. The EU needs to deeply understand and recognize China's principles. It is wishful thinking to expect China to make concessions that harm its own interests.

Cui said that the EU's anti-subsidy probe into Chinese EVs can be a litmus test. If the EU can respond to China's concerns properly, it can steer the wheel back to pragmatically solving divergences and problems with China. But if the EU wants to use Borrell's visit to reinforce the EU's negative policies toward China, the unstable status of China-EU ties will continue.

During Borrell's visit, the two sides will hold the 12th round of China-EU High-level Strategic Dialogue. Borrell might serve as a precursor to the China-EU Summit scheduled for later this year. The visit is a clear indication that the EU understands the value of bilateral economic and trade ties, and that China will not sit still if the EU adopts confrontational tactics. It's hoped the EU could seize the chance of Borrell's visit to solve bilateral frictions in the economic field and increase political mutual trust with China.

Three of China's science and technology (S&T) clusters are among the world's five biggest S&T clusters as announced by the World Intellectual Property Organization (WIPO).

Wang Wenbin, spokesperson of the Foreign Ministry, said on Monday during a routine press conference that the achievement showed the success of China's measures to encourage relevant regions to leverage their strength as reservoirs of innovation factors and increase their ability to innovate and boost economic growth.

On September 20, the WIPO released the Global Innovation Index 2023, which showed that three Chinese S&T clusters - Shenzhen-Hong Kong-Guangzhou, Beijing as well as Shanghai-Suzhou - were among the world's top five.

In addition, the GII identified 24 S&T clusters in China, up from 21 in 2022, as the country is now home to the greatest number of S&T clusters, said the WIPO.

Wang said that the achievement showed that relevant regions have used their advantages of innovative factors, and this is having a positive effect.

"Since the first edition of the GII was released in 2007, China has been on the list at various ranks more and more frequently, reflecting the continuous improvement of China's innovation-driven development," said Wang.

Data from the National Bureau of Statistics showed that China's innovation-driven index reached 336.3 in 2022, up 15.5 percent year-on-year, and social research and development investment surpassed 3 trillion yuan ($410.37 billion) for the first time, ranking second worldwide, said Wang. 

Daren Tang, director-general of the WIPO, said that China has become a major contributor to international intellectual property work, and has successfully transformed itself into a global center of innovation, creativity and technology.

Wang reaffirmed that innovation is attached with international cooperation, openness and sharing. "China will keep implementing win-win strategy of opening-up, improving openness, promoting international communication and cooperation in science and technology, and building an open, fair, just and non-discriminatory environment for development," he noted.

With several days to go before the end of fiscal year 2023 on September 30, the massive expansion in US federal budget deficit is setting off alarm bells across the American economy. The deviation between US fiscal policy and Federal Reserve's monetary policies is like two gears pulling in opposite directions. The longer the deviation takes, the more financial risks will be accumulated throughout the US system, risking spillover effects on other economies.

The US Congress has just several days to avert a shutdown before the government runs out of money. The deadline for lawmakers to reach an agreement is midnight on September 30, after which government funding for essential services is set to run dry. This is not the first time that the government is faced with plunging into such as an awkward situation. The most recent shutdowns were in 2018, when the government was shut more than 30 days.

The last three years of public policy have had a major impact on the federal budget. The large increases in government spending far outpaced the growth in revenues, reportedly resulting in deficits of $2.7 trillion, $1.4 trillion, and $1.6 trillion in fiscal years 2021, 2022, and 2023, respectively, with the last month of 2023 based on current estimates. As the US national debt passes $33 trillion and a government shutdown looms, Wall Street and global investors inevitably feel the chill.

Some analysts believe the US economy has been on a strong recovery track since the beginning of the year. Such an uptrend should be attributed to multiple factors, among them an expansionary US fiscal policy that includes high levels of government spending is an important one. Increased government spending can take the form of both purchases of goods and services, which directly increases economic activity, and is transferred to individuals, indirectly increasing economic activity as individuals spend those funds.

Meanwhile, inflation rates increased for a second straight month in August, reversing previous declines as consumers continued to grapple with the rising cost of everyday goods. Since March 2022, the Fed has lifted interest rates 11 times and held them steady only twice, including September's pause, to control inflation. The substantial tightening in monetary policy has started to weigh on activity, increasing households' and firms' interest payments, and putting pressure on the real economy. It's understandable that an expansionary fiscal policy has been adopted to increase government spending amid inflation woes and it would be conducive to offset the negative impact of tightening monetary policies on the economy.

A year ago a majority of economists expected a US recession. So where'd it go? Increasing government spending may be one of the factors that have kept a recession at bay, at least so far. The more aggressive the Fed's tightening monetary policy is, the more government spending may be requested to stimulate growth. With 2024 presidential election just about one year away, the Biden faces a challenge: how to convince voters that he has the ability to boost growth while curb inflation.

In such a situation, the Biden administration probably hopes to maintain elevated government spending to promote growth. The tightening of monetary policy and expansionary fiscal policy seem like the two ends of a seesaw, requiring a delicate balance to avoid a recession in the US economy.

However, what some Western economists tend not to notice are the side effects on the US economy. A big part of the story is the massive expansion in the federal budget deficit. Prospect of government shutdown poses a new threat to the US economy. For instance, a government shutdown would cost the US travel economy as much as $140 million a day, CNN reported, citing an analysis released by the US Travel Association. While the US economy is unlikely to implode any time soon, it faces significant and deep-rooted challenges. Moody's Investors Service said on Monday that US credit rating could come under pressure if the government shuts down.  

The US remains the world's largest economy, the mistakes it makes often result in strong spillover effects that not only harm itself but also burden the region and even the entire world economy.  Missteps over stubborn inflation and massive expansion in federal budget deficit make the country a real "time bomb" posing a danger to the world.