The Biden authorities may face China on two ranges, says the previous head of the IMF China


US President-elect Joe Biden (L) met with Chinese President Xi Jinping on January 17, 2017 in Davos, Switzerland.

Lan Hongguang | Xinhua News Agency | Getty Images

The US under a Biden administration could work with China on health care and climate change, even if the two countries are far apart on other issues, said Eswar Prasad, former head of the International Monetary Fund's China division.

President-elect Joe Biden has made the coronavirus outbreak one of his priorities and is expected to announce a task force on Monday that will come up with a plan to contain the virus. Biden also called climate change the "main human problem" during the campaign.

"Both are issues that are very important for future administration, and on these issues at least China must be seen as a partner, even if it is not a close ally," said Prasad, now a professor at Cornell University, CNBC's "Squawk Box Asia" on Monday.

He pointed out that China – where Covid-19 was first discovered – has apparently done a "reasonably good job" in dealing with the pandemic and its consequences in the health care sector. In terms of climate change, the US might not be able to achieve much globally without China's cooperation, he added.

I think the Biden government will be much more strategic in its approach as it recognizes that it may need to give in some areas in order to make broader concessions in many other areas.

It was Prasad

Professor at Cornell University

"So these are areas where I think the two countries could be on an equal footing. I hope this provides a better basis for negotiations in much more difficult areas, particularly economic and trade policy, where there are almost contentious issues gives." said Prasad.

That doesn't mean US-China relations – which deteriorated under President Donald Trump – could change for the better. Repeating the views of many experts, Prasad said US policy towards China is unlikely to change significantly.

This is especially the case when the "baseline" of US-China relations has shifted in recent years, he said. The US generally did not seem to see a "real payoff" for a cooperative relationship with China, he said.

Still, the Biden government would use a different tone and tactic to move closer to Beijing, the professor said. The president-elect will likely fill his administration with people who worked under former President Barack Obama, Prasad said. These people, he added, recognize that there may be benefits to working with China.

"I think the Biden administration will be much more strategic in its approach, recognizing that it may need to give in some areas in order to make broader concessions in many other areas," he said.


Katherine Clark