The coronavirus outbreak has put to rest any doubt that China is the most economically influential country on Earth, disrupting almost every activity from a global oil and gas glut to a possible shortage of sex toys in Russia and beyond. However, as China has accounted for a third of global economic growth since the 2008 financial crisis, the revelation should not be a surprise.
China is the world’s biggest buyer of natural resources and largest manufacturing hub, so any slowdown in its economy necessarily disrupts the global supply chain.
For example, the outbreak of the virus that causes the respiratory disease Covid-19 has caused many factories to close, brought public transportation to a halt and reduced the number of cars on the roads, hugely reducing the demand for oil and natural gas, and thus forcing Russia, Saudi Arabia and other producers to cut down output in order to stabilize energy prices. Since oil-producing countries rely on petroleum revenue to sustain their economies, a reduction in sales to China would curtail or slow economic growth.
Closely related is China’s manufacturing prowess, producing many of the world’s consumer, commercial and industrial goods, ranging from final products to parts that other countries need to complete the good. For example, China is the biggest producer of smartphones and computers as well as parts for automobiles and furniture in the US and other countries.
China is also one of the largest sources of tourists and international students to the West, Japan and other countries. According to United Nations figures, nearly 150 million Chinese traveled outside their country. According to a South China Morning Post report on February 14, global tourism could take a US$80 billion hit because of the Covid-19 scare. Particularly hard hit are countries dependent on Chinese tourism such as Thailand, Japan and South Korea, among others. According to a February 12 Wall Street Journal report, the US tourist industry could take a multibillion-dollar hit this year.
Chinese make up a third of international students in the West, particularly in the US, the UK, Canada, Australia and New Zealand. They contribute tens of billions of dollars to those five English-speaking countries each year. Indeed, many of these countries universities need the Chinese students to remain financially viable and subsidize local students, as the former have to pay three times the tuition of their native counterparts in some cases.
China’s economic importance thus requires the world to cooperate with rather than confront the Asian giant. Yet people of the countries that depend on Chinese tourists and students, investment and trade the most are the first to show prejudice against the Chinese, as if they wanted to infect themselves and other people with the virus.
It has been widely reported that bigots in Southeast Asia, Australia and Europe are openly targeting Chinese people. What’s more, the US ratcheted up its anti-Communist China rant at the recent Munich Security Conference, accusing the country of being the “biggest threat to the world.”
The three senior American officials at the conference – House of Representatives Speaker Nancy Pelosi, Secretary of State Mike Pompeo and Defense Secretary Mark Esper – reiterated their “China threat” theory, but only to be ridiculed by other attendees and pushed back by China.
Former Chinese assistant foreign minister Fu Ying posed an embarrassing question for Pelosi: Is US democracy that fragile, that one company (Huawei) could threaten it? The question drew laughter and applause from the audience. Pompeo’s and Esper’s warnings fell of deaf ears because most US allies, except Japan and Australia, have allowed Huawei and other Chinese telecom equipment in their 5G (fifth-generation telecom) rollouts.
It could therefore be argued that the anti-China rants in Asia and the US are like Keystone Cops, shooting themselves in the foot. Southeast Asian countries and Australia are now finding themselves in an economic downward trajectory because they are highly dependent on Chinese trade and tourists. US technology companies are on the brink of financial disaster because much of their revenue is from China. What’s more, the US policies could destroy US technology companies because some are contemplating relocation to other countries to get around US laws and sanctions.
More important, demonizing China has actually strengthened the Asian giant, forcing it to become self-sufficient, from producing jet engines to making chips. A US proposal to ban the sale of jet engines to a Chinese aircraft manufacturer has probably started the ball rolling on China building its own commercial jet engines or seeking collaboration with European and Russian producers. Huawei has already manufactured or purchased parts for its telecom equipment and smartphones without using US components.
Such huge costs might be justified if China is really as “evil” as the US and other countries claim. But there is no credible evidence to suggest that China spies on or plans to invade them. When pressed for evidence of spying or theft, the US could produce none and made the excuse that it could not diverge the information for “national security” reasons.
And yes, China prefers to walk on its own development path because it works for its own national interests. Its policy was never intended to supplant US supremacy or topple it from the apex. “Socialism with Chinese characteristics,” China’s development architecture, was established after a long period of experimentation on which model could improve people’s lives and build a strong military to prevent history from repeating itself. If that is threat, then the Asian giant is guilty, suggesting that China is prepared to be the enemy that the West and Japan want.