Myanmar experienced a military coup on February 1, 2021, during which military leaders captured Ang San Suu Kyi and others who were aiding the country’s transition from military rule to a democracy. Many consider the coup to be a growing obstacle to US-China relations, however our Asia Pacific analysts believe that Myanmar is unlikely to play a major role in US-China tensions. The issue pales in comparison to numerous others (e.g., Xinjiang, Hong Kong, South China Sea). Barring a reversal of the coup, the United States will be sidelined as China, India, and ASEAN vie for influence in Naypyitaw (and China dominates).

US-China tensions are still uncertain, however, as the United States transitions from the Trump administration to a new Biden presidency. Our base-case scenario for US-China tensions in 2021 maintains that US-China talks will lower tension during the Biden administration, but we will see no immediate change to the policy environment. While initial meetings are constructive, we expect the Biden administration will be unwilling to unilaterally lower tariffs, and China will be unwilling to provide additional concessions beyond agreements made in Phase 1 talks.

Watch Practice Leader for Global Economics, Ryan Connelly give a deep dive into the global Events to Watch impacting your Asia business for an analysis of how you can prepare for continued volatility in 2021.

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