by Emil Avdaliani
More trouble ahead?
The Wuhan seafood market in China, closed after outbreak of coronavirus, photo via Wikimedia Commons
BESA Center Perspectives Paper No. 1,527, April 13, 2020
EXECUTIVE SUMMARY: States
all over the world stand to lose a great deal economically from the
coronavirus pandemic. But in the case of China, there is an additional
significant dimension to the crisis: the West will grow increasingly
distrustful of Beijing, which will further widen an already gaping
geopolitical divide. Calls in the West for an economic decoupling from
China as well as increasing demands that Beijing comply with Western
economic, health, and political standards could complicate China’s
global aspirations.
Economic troubles
The coronavirus pandemic will undoubtedly have an
impact on China’s economy. Consider, for example, the US-China trade
deal, the first phase of which took effect in February. That phase
stipulates that Beijing will have to buy an additional $200 billion in
US goods over the next two years. Though the Chinese government has
said the country will comply with this requirement, it remains to be
seen whether Beijing will be able to follow through on this and other
commitments contained in the deal.
There is also concern in the US that the second
phase of trade negotiations with China will be delayed. This would have a
negative effect on Washington-Beijing relations, which could in turn
have global repercussions.
The pandemic is also creating major disruption of
China’s near-trillion-dollar Belt and Road Initiative (BRI). Significant
delays have been reported in BRI projects in South Asia, specifically
in Cambodia, Indonesia, Sri Lanka, and other states. One problem is
travel restrictions, which are limiting Chinese workers’ ability to
participate in BRI projects abroad. There is also a fear that a partial
shutdown of Chinese factories could have a major ripple effect on the
BRI, as large infrastructure projects need a constant supply of key
resources that are lacking in host states.
The Chinese government will undoubtedly work very
hard to salvage the BRI. This flagship project, which is widely
considered to be Xi Jinping’s personal initiative, is now infused into
Chinese statecraft and foreign policy—and even more importantly into the
country’s perception of its own rising global standing. Disruption of
the BRI would seriously damage Beijing’s geopolitical aspirations.
To assist the Chinese economy as it copes with the
effects of the coronavirus crisis, Beijing is likely to intervene
significantly via interest rate cuts, increased lending, and fiscal
stimulus measures. It is going to have to deal with damage caused to the
economy by the diminishing of world supply chains resulting from a
decrease in global demand for Chinese products.
There could be an even bigger dimension to China’s
coronavirus crisis. There is a growing trend among Western states to
limit their exposure to Chinese economic power through a partial
decoupling of existing deep economic contacts. Many world corporations
with global supply chains are stationed in China, and some might react
to the coronavirus crisis by choosing to diversify their locations.
Indeed, such calls were rising well before the pandemic because Western
and Chinese standards of doing business are fundamentally different on
many levels.
Ideological troubles
The world was rattled by the lack of information
emanating from China at the beginning of the pandemic and by subsequent
alleged efforts by Beijing to limit the free dissemination of
information about the epidemic. This will likely cause serious damage to
China’s attempts to position itself as an aspiring global power with
ambitions to remake both state-to-state relations and the Eurasian
economic order.
Though Beijing has put great effort into using
this crisis as an opportunity to enhance its soft power through the
provision of medical help to states around the globe, an opposite trend
is emerging: a deepening of distrust of China and a worsening of its
ability to position itself as a model power.
There are calls around the world demanding
explanations from Beijing about the crisis, as well as threats of
lawsuits over the alleged cover-up of information by the Chinese at the
beginning of the pandemic. Many investigations will be made into the
outbreak of the virus, but it is clear that the crisis has widened an
already significant ideological divide between China and the Western
world.
Poised as they are to compete geopolitically in
the coming decades, the two poles have tried so far to refrain from
addressing the unfolding struggle in ideological terms—but the
coronavirus crisis will eventually expose an ideological clash that will
complicate West-China relations.
The pandemic might serve as a breaking point
whereby EU institutions begin to vocally question information coming
from China and openly criticize the country. This would be consistent
with the development of EU policy toward Beijing over the past year. In
2019, EU institutions recognized China as Europe’s systemic rival.
Europeans are starting to reconsider their dependency on a single
external supplier for crucial medical equipment.
China’s relations with the US will be damaged as
Washington strives to consolidate its stance among its allies and
partners around the globe. The extent of the damage will ultimately
depend on how far the US is willing to go to use the pandemic as a
weapon against China.
China’s diminished position will limit its
flexibility even along BRI corridors. Pre-pandemic concerns about
China’s political and economic moves in Central Asia and the Middle East
will increasingly ossify into geopolitical limits for Beijing in the
wake of the crisis.
While some analysts are making radical forecasts,
the likeliest damage scenario for China’s global standing after the
coronavirus pandemic is at a medium level of severity. The BRI will
likely proceed along the planned corridors. The results of the pandemic
will be seen primarily in the ideological realm, which is so deeply
interwoven into the geopolitical. The Eurasia of 2050 may well show
lines of influence divided between Chinese economic and ideological
spheres and the Western world. The coronavirus might turn out to have
been the primary cause of the decoupling of the West and China.
Source: https://besacenter.org/perspectives-papers/what-coronavirus-could-mean-for-china/
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