China juggernaut

[Bloomberg]( Follow Us [Get the newsletter]( When Joe Biden vowed that China wouldn’t [displace]( the U.S. as the most powerful nation on Earth under his watch, it was probably a safe bet. Even if he [runs]( again in 2024 and and wins another four-year term, the president could leave office just as China overtakes America as the world’s No. 1 economy. As [Jin Wu]( and [Tom Hancock]( explain, China’s V-shaped recovery from the Covid-19 pandemic has seen it increase its share of global [output]( at the quickest pace this century, possibly surpassing the U.S. in economic terms by 2028 or even two years before that, some economists say. Under Xi Jinping’s leadership, Beijing has put forward plans to double the size of the economy by 2035 and wants to become the global leader in everything from biotechnology to green energy and artificial intelligence. The U.S. isn’t taking this lying down. Biden will today [unveil]( a $2.25 trillion proposal to fund transportation, manufacturing, renewable energy and other efforts to combat climate change. At the same time, he’s tightened measures imposed under Donald Trump to limit China’s access to key technologies such as semiconductors. In Europe, the promise of vaccine deliveries picking up in the second quarter means that it has a chance to turn the corner and project itself as a third global economic force. But as the Chinese boycott of Swedish fashion retailer H&M over its human-rights criticisms has shown, Europe can’t avoid the great power rivalry between the U.S. and China. As most of the world struggles to emerge from the pandemic, the competition for supremacy is shifting into high gear. — [Karl Maier]( Pedestrians in Pudong’s Lujiazui Financial District in Shanghai, China. Photographer: Qilai Shen/Bloomberg Check out all our biggest stories on the Bloomberg Politics web page [here]( and tell us how we’re doing or what we’re missing at balancepower@bloomberg.net. Global Headlines Sweeping investment | The Biden administration is likening the magnitude of the president’s infrastructure plan to the 1960s [space]( program and 1950s interstate-highway system. [Nancy Cook]( and [Jennifer Epstein]( outline the proposal’s targets for transportation and manufacturing as well as clean water and high-speed broadband. - Three House Democrats say they won’t [support]( Biden’s tax hikes to fund his program unless the plan includes a repeal of the $10,000 cap on state and local tax deductions. Pushing back | China refuted [criticism]( of the World Health Organization probe of the origins of the coronavirus in Wuhan, noting experts had concluded it’s extremely unlikely the virus leaked from a lab and urging relevant countries to “respect facts.” It comes after the White House [slammed]( the WHO report, calling it incomplete and faulting data and access provided to its authors by China. - NASA has [upset]( China by referring to Taiwan as a country, the latest organization to get caught in a quarrel over wording that Beijing deems politically sensitive. - Hong Kong institutions are further [restricting]( public access to information, raising concerns over transparency as China increases its grip on the Asian financial hub. Warming ties | Pakistan’s government is set to resume [trade]( with India after it today approved the import of cotton yarn from its bitter rival in the latest sign that tensions are easing between the two nations. Islamabad downgraded diplomatic relations and suspended bilateral trade with India in 2019 after New Delhi revoked autonomy for the disputed state of Jammu and Kashmir. The neighbors surprised the world last month with a rare joint commitment to respect a 2003 cease-fire agreement. Indian Border Security Force personnel and Pakistani Rangers perform during the daily beating of the retreat ceremony at the India-Pakistan Wagah Border Post. Photographer: Narinder Nanu/AFP/Getty Images Spending boost | Saudi Arabia’s biggest listed companies, including energy giant Aramco, will reduce their dividends and redirect the money to the local economy as Crown Prince Mohammed bin Salman tries to get his economic overhaul plan [back on track](. Twenty-four firms have agreed to contribute 5 trillion riyals ($1.3 trillion) over the next 10 years, which will help diversify the economy of the world’s largest oil exporter and create enough jobs for the kingdom’s youthful population. Cocaine plot | Honduran President Juan Orlando Hernandez participated in a violent cocaine [conspiracy](, a U.S. prosecutor alleged at a hearing that saw the leader’s brother sentenced to life in an American prison. Matthew Laroche told a federal court in Manhattan that the Central American nation is being operated as a “virtual narco state.” The president dismissed the case as corrupt. What to Watch - French President Emmanuel Macron will [address]( the nation tonight, when he is expected to impose further movement restrictions following a spike in Covid-19 cases. - A French air strike that killed 22 people allegedly attending a wedding in Mali earlier this year could constitute [a violation]( of international humanitarian law, the United Nations said. - Italy’s Matteo Salvini is expected to meet today with Hungarian Prime Minister Viktor Orban and his Polish counterpart, Mateusz Morawiecki, to discuss the [formation]( of a far-right political party. And finally ... [Liberal initiatives]( introduced by Thailand’s Prime Minister Prayuth Chan-Ocha — a 67-year-old former army general and coup leader — could reshape the country’s once conservative society. Entrepreneurs are now poised to launch marijuana-infused food and drinks following the introduction of new cannabis laws. It’s just one of a raft of changes from abortion rights to same-sex partnerships that Prayuth is pushing as part of his business-friendly image, even as protests against his government continue. A cannabis plant mascot in Bangkok in January 2020. Photographer: Mladen Antonov/AFP   Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.  You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022