With Coronavirus changing the assumptions of globalisation, reinforcing national boundaries, and putting hard brakes on global economic growth, now would be a good time to talk about China, its chequered history, and its equation with the rest of the world!
Very few events have the ability to turn global assumptions on their head. The World Wars, for instance, brought the destinies of countries together on the path towards collective destruction. The Gulf Wars were feared to have had the potential to escalate into global conflicts, though they remained regional, finally giving rise to the global threat of international terrorism, leading up to the 9/11 attacks on the World Trade Centre.
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| Image: wikipedia |
The pandemonium caused by the Global Financial Crisis underscored the fragility of assumptions about the seamless flow of finances and information across the world. Globalisation was still picking up steam when it all seemed to fall apart, as remote nations could feel the tremors of credit crunches and failing institutions far away from their borders. While strong domestic fundamentals of independent nations served as a buffer, preventing the financial seismic waves from taking them down, the network of international finances and borderless markets were questioned briefly, before the world continued on its quest for the perfect and elusive model of global village.
The unprecedented threat posed by Covid-19, a.k.a Coronavirus, which Beijing would desperately beg not to be referred to as the Wuhan Virus or the Chinese Virus, is even more pressing than those of the other pandemics in the history of the world, for the very reason that globalisation has now taken centre stage in world affairs. Economies such as Australia and the USA, among others, have become so addicted to Chinese manufacturing for economic reasons over the years, that China has vastly come to be seen as their own backyard to cook their meals before they are readily served on their tables. Stories of manufacturing facilities being closed down in the developed economies of the UK, Australia, and the USA, where entire communities were virtually rendered into ghost towns, with complete supply chains having been shipped overseas, predominantly to China, and increasingly to India and other Asian economies, have been doing the rounds seemingly for eternity now!
All eggs in the Chinese economic basket - China's chequered history
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| Image: Wikipedia |
China’s willingness to manipulate its currency in international markets to prop up its economy has been questioned time and again. The world has wondered if the Chinese economy has been in overdrive for decades, waiting with bated breath for the bubble to burst, exposing what really lied beneath the glittering hood. China’s ageing population, along with its questionable human rights practices in Honk Kong, its expansionist endeavours in the South China Sea, its brinksmanship with India along China’s borders with the Indian State of Arunachal Pradesh, business practices featuring sweatshops, international dumping allegations, deteriorating air and water quality, the controversial China Pakistan nuclear alliance, allegations of spying and hacking international systems . . . the list of China having been in the headlines would go on and on, even before Wuhan hit the news for all the wrong reasons.
Fundamentally, it would go against basic business acumen to place all of the world’s bets on one country, and more so on one with such a chequered history as China! For instance, Australia is so heavily dependent on China that its retail outlets could virtually go empty if China shut down shop for a few consecutive days! Now, in the midst of the global pandemic crisis with Coronavirus having made its way virtually to every region of the world, the USA is discovering that it would run out of the very medical products that people would be in a frenzy to stock up to protect themselves from Coronavirus infections – sanitizers and other drugs. The reasons are simple – the drugs and / or their ingredients are made in China!
The world still debates if Coronavirus was also "made in China", though there is no dispute on the fact that Coronavirus originated in Wuhan in China, and it does appear that China did hide the severity of Coronavirus for a while, even trying to muzzle whistleblowers, before it turned into a pandemic that it is now. That would seem like the all-important window of the first few days of discovery of the deadly virus, which could have, if China had disclosed and had worked in cooperation with the global community, made the difference between a controllable epidemic on a large scale and a wild pandemic whose very nature and impact is yet to be known!
Revisiting Chinese international relations – can one size fit all?
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| Image: Wikipedia |
So, now would be a good time to analyse, while the medical community and government agencies race against time to solve the mystery of the first pandemic of the 21st century, if China can indeed be the universal playing ground for global businesses of all shapes and sizes! The world should ask if too many nagging questions have been ignored or brushed under the carpet, with profitability alone dictating the agenda in a very complex network of equations.
Was the fight for democracy that kept Hong Kong on the edge for months together, a warning sign about China’s oppressive policies, which were ignored? Could China not have been contained by the international community against its aggressive advances in South China Sea? Could India have dealt with China more assertively to restrain China from breaching into its territorial integrity in Arunachal Pradesh? Could the US have imposed penalties more proactively and stood its ground to check China’s alleged currency manipulation and dumping practices? Did the UN fail to take notice of Human Rights issues and other dubious practices veiled in secrecy under the auspices of China's ruling establishment?
Obsession with one nation is never the best idea, certainly not in business terms where shrewd strategic decisions had to be taken with long term perspectives. Was it sound strategy for the world to shift its manufacturing bases to China, just to stay competitive in the short run? Could business systems be sustained in the long run if low cost productions were the only set of decision making criteria? Could complex international supply chains around the world be built with China as the global hub? When branding is all about trust, would it be in the interest of nations to bank on a country that potentially withheld vital information about Coronavirus in the early days of the disaster's unfolding?
Judgement may well be reserved till when all the panic surrounding the pandemic has ceased and when the Covid-19 dust has hopefully settled. But if the right lessons are not learnt now, when the world is battling its worst uncertainty in ages, when the very premises of globalisation are being questioned, when human civilisation’s proud march towards progress has been put on an uncertain hold at very short notice, when basic assumptions that dictated international business decisions are having to be revisited, the global community may be in for an even greater shock the next time, when an even graver disaster strikes at the core of global belief systems and deals an even deadlier blow, rendering it virtually impossible for the world to recover from! The international community and its leadership would be held accountable then for not having acted in the hour of the greatest crisis of the century yet, despite a cacophony of warning bells ringing for decades before they finally culminated in the pandemic of Covid-19!
There may still be time to act - but the time to ask is now!
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