The U.S. is contending with scarce workers, ravenous demand for goods, and rising inflation. China is fighting power outages, weak consumption and a property sector in free fall.
While this might seem like a toxic environment for investors, there is one major potential upside: It is impossible, at least for now, for the Biden and Xi administrations to ignore how much their two economies depend on one another. That could help, for a little while at least, to contain the vicious cycle of escalation which has poisoned the global investment environment and raised fears of more serious conflict over the past three years.