Coronavirus Will Stall China’s Rise

A corona virus model. Photo Credit: Food and Drug Administration.

If you turn on the news right now, you’ll likely see stories on the scramble for face masks, images of ghost towns deserted in quarantines areas, and a steady rise of fateful numbers: as of March 5, just over 95,000 reported cases and more than 3,200 deaths worldwide were attributable to the coronavirus epidemic.^[i] The World Health Organization (WHO) has labeled this disease COVID-19, a “public health emergency of international concern”^[ii]as the virus continues to emerge around the globe. While much attention has been devoted to China’s chokehold on information and the impact on the Chinese Communist Party’s (CCP) control, little analysis has examined the long-term effects of what COVID-19 means for China as a global leader and development partner. This article will fill this gap, arguing that China’s poor crisis management and struggling economy will stall China’s rise.

Coronavirus has already demonstrated its potential to severely derail China’s growth. Far from shrugging off global concerns about lulled supply chains and missed trade opportunities, global production is plummeting. Coronavirus could spur a shift in the international power balance and send major vibrations throughout the global economy. These economic repercussions of the epidemic, coupled with the CCP’s bungled crisis management, will shake stakeholders’ confidence in the state, redirecting critical foreign direct investment. Smaller nations that rely on China for trade and protection will see their faith shaken in the latest of a longstanding series of egregious disappointments that stretches from Tiananmen Square to Hong Kong, from Taiwan to the South China Sea. Especially evident in China’s economy and strained relationship with the United States, China has shown its true colors in how it combats this disease—and it doesn’t look good for the country’s future. While ultimately the size of its market cannot be ignored, COVID-19 exposes irreparable damage to China’s ability to lead, especially in international development.

Economic growth is one of the main areas countries look for in their partners as a symbol of strength and vitality. But coronavirus has practically ground China’s economy to a screeching halt, impacting major industries like tourism and manufacturing and directly causing countries that depend on Chinese goods to do without.^[iii] It is worth noting that China is presently the world’s second largest economy^[iv] and accounts for 12% of the global GDP growth rate—yet experts estimate the impact on Chinese production will likely linger for at least two quarters and decrease the country’s GDP by 0.3%.^[v] Growing at its slowest pace in nearly thirty years due to ongoing strain from the U.S.-China trade war, China is already facing rising debt and unemployment, more US tariffs, and slackening domestic demand.^[vi] The coronavirus outbreak cements these problems. International shipping is just one example: on the Freightos platform, which helps US companies search for suppliers, usually about 3-6% of connected companies look outside China; recently, this number has jumped to almost 20%.^[vii] COVID-19 may end up costing China some $62 billion^[viii]—and that is money it will not have to invest in international development or build relationships with other regional partners. This may sound opportunistic, but the coronavirus will preoccupy Beijing. Indeed, it already has, as the government has postponed its annual meeting of the National’s People Congress for the first time since the 1970s^[ix], a symbol of the serious impact coronavirus is having on the CCP’s ability to lead. Whoever steps into this void could change the next several years’ outlook and the new makeup of the international order.

Sensing risky global growth, foreign investors have started to move, with discussion of India, Bangladesh, and Vietnam as new investment and supply hubs.^[x] India would especially stand to benefit if it increased trading and shifted its economy to an export-driven model, further letting the air out of China’s balloon.^[xi] While some countries like Mongolia are remaining steadfast in supporting and increasing ties with China, the virus is exacerbating already fragile relationships with other states.^[xii] Taiwan in particular has been hit hard by coronavirus—not especially in terms of infection, but rather by its contribution to bitter politics. Deep inside Wuhan, China’s seventh largest city and the epicenter of COVID-19,^[xiii] at least 1,000 Taiwanese citizens remain trapped under quarantine.^[xiv] China allowed only one charter flight to evacuate on February 4, taking with it only 247 passengers. The technicalities of arranging flights have stranded healthy Taiwanese people who know it’s only a matter of time before they contract the virus. What’s even more alarming is that China, given that it does not recognize Taiwan as a sovereign country, is the reason Taipei has been kept out of the World Health Organization, further shrinking Taiwan’s resources.^[xv]            

Unfortunately, as a matter of global development, China has a confirmed pattern of cover-ups when it comes to public health crises. COVID-19 has surpassed the 2003 SARS epidemic’s infection and death rates, debilitating 8,098,  killing 774 people, and costing the world economy about $40 billion.^[xvi] In both cases, China “shot the messenger,” limiting the free flow of information and suppressing dissidents, which ultimately allowed the diseases to spread without detection far and wide.^[xvii] More concerned with expelling Wall Street Journal reporters for an opinion editorial that China proclaimed racist,^[xviii] the country also refused offers of help from the US Centers for Disease Control and Prevention and World Health Organization experts.^[xix] While there has been some cooperation in modeling the virus’ spread and studying certain medical cases,^[xx] the original proposed visit would have gone farther to sequence the virus’ genome, determine potential treatment options, and contributed to epidemiological studies on who gets infected and why, incubation periods, and more.^[xxi] Instead, China shut down and disinfected the original animal market where the original coronavirus host is believed to have been found. They did so without taking samples, without learning about the animals it came from or potentially finding any early victims who contracted the virus and survived.^[xxii] China has now twice proven it will place “saving face” above “saving lives.” Its tendencies toward disinformation and limits on transparency make clear it is not ready to lead other countries in the liberal world order. Moreover, China’s turbulent economy and poor crisis management approach make it a fickle development partner. With friends like this, who needs enemies?