Backlash Against China Intensifies
Author: Greg Valliere
April 22, 2020
THE VIRUS VILLAIN: If there’s one issue that unites Washington — and most of Europe as well — it’s the deep antipathy toward China, which undoubtedly will result in new Western supply chains and less reliance on Chinese products.
A LONG LIST OF COMPLAINTS: Fitting for a Communist dictatorship, Beijing concealed the extent of the virus, punishing heroic doctors in Wuhan who issued warnings; the government’s data on infections and deaths are widely viewed as bogus — as speculation grows on where and how the virus developed.
AS THE VIRUS SPREAD TO EUROPE IN FEBRUARY, Chinese offerings of assistance were widely viewed as insincere. And now, as the world focuses on the virus, there’s a crackdown on Hong Kong dissidents; many have been jailed, but Beijing knows that mass protests are unlikely in this new age of social distancing.
THE BACKLASH AGAINST CHINA will be most apparent in two areas:
1. Legislation in the U.S. Members of Congress — in both parties — are likely to
embrace legislation that would seek to shift supply lines back to the U.S. As we wrote on April 14, there’s bipartisan support for reducing reliance on medical and pharmaceutical exports to the U.S., perhaps by offering incentives to American firms to manufacture those goods domestically. New tariffs on Beijing are possible, and some states are even suing China for its lack of transparency as the virus began.
2. A major shift from NATO: There’s an excellent piece on the Bloomberg web site today that details European disillusionment. China has bought much of Europe — even Bordeaux vineyards — in recent years, but “China has lost Europe,” a German legislator says in the Bloomberg article.
Europe will listen as Japan and other countries seek to capture customers that China has in NATO — not just for medical products but technology as well; Europe may re-visit its ties to Huawei. And there’s resentment in Europe that many Chinese markets are still closed to outside investment.
THE POLITICAL ANGLE: Donald Trump surely knows how to play the race card; immigration curbs he announced this week are just the first volley in an election campaign that will target China. Republicans will remind voters that Joe Biden has always been viewed as pro-China on trade, which will be a major albatross for the Democrats’ nominee.
PERHAPS THE BIGGER POLITICAL ANGLE will be in Beijing. If this crisis results in job losses in China and a sagging economy, will Chairman Xi have to worry about
social unrest? The Chinese people are very savvy; they know they have been deceived on the virus. They’ll look the other way — unless the economy begins to falter.
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