As leaders in Europe, Africa, and Asia reexamine economic ties to China, its full recovery doesn’t look promising.
As nations around the world struggle to deal with outbreaks of the Wuhan coronavirus, China is now experiencing the first phase of what could be considered social distancing on an international scale.
To begin with, it is being reported that China suffered its worst economic contraction since the 1970s, with a serious hit to its factory activity.
The world’s second-largest economy shrank 6.8% from a year ago in the three months ending in March after factories, shops and travel were closed to contain the infection, official data showed Friday.
That was stronger than some forecasts that called for a contraction of up to 16% but China’s worst performance since before market-style economic reforms started in 1979.
Some forecasters earlier said China, which led the way into a global shutdown to fight the virus, might rebound as early as this month. But they have been cutting growth forecasts and pushing back recovery timelines as negative trade, retail sales and other data pile up.
“I don’t think we will see a real recovery until the fourth quarter or the end of the year,” said economist Zhu Zhenxin at the Rushi Finance Institute in Beijing.
There are now signs that China’s lack of transparency and its failure to contain the spread of the virus internationally is slowing down its economic recovery. It is now apparent that European governments are hardening their positions toward China as they weigh future business activity with the nation.
French President Emmanuel Macron accused Beijing of not being upfront over its handling of the epidemic, while in the U.K., Prime Minister Boris Johnson’s plans to involve Chinese tech giant Huawei Technologies Co. in the nation’s next-generation mobile network may fall prey to mounting opposition.
The European Union’s position on China has been relatively measured, but leaders are beginning to call for a more thorough examination of its activities amid accusations Beijing has covered up the true scale of the epidemic. American intelligence officials are said to have concluded that China concealed the extent of its outbreak and under-reported the number of cases and deaths.
“Let’s not be so naive as to say it’s been much better at handling this,” Macron told the Financial Times in an interview published Thursday, referring to China. “We don’t know — there are clearly things that have happened that we don’t know about.”
When you’ve lost Macron . . . .
As global leaders weigh the actions taken by the Chinese Communist Party in the wake of the pandemic, little things like bad test kits and underwear-based masks add up. So it is not surprising that some countries are reassessing their plans to be part of China’s 5G global empire.
The UK is moving to drop Huawei as a vendor for the country’s 5G cellphone network in a major blow to Communist China over poor coronavirus transparency.
Prime Minister Boris Johnson, now recovering from COVID-19, gave the Chinese company a role in 5G infrastructure this year, squashing opposition last month by 24 votes in the 650-seat House of Commons.
But now, concern about the Chinese Communist Party’s inaccurate reporting on the coronavirus has lawmakers crafting plans for a retreat.
“We need to devise a proper, realistic exit strategy from relying on Huawei,” Conservative Member of Parliament Damian Green told Bloomberg News. “Our telecom providers … need to know the government is determined to drive down Huawei’s involvement to zero percent over a realistic timescale.”
China’s recent, brutal treatment of African nationals living there has raised alarm bells on that continent.
…[The] that decades long quest for influence in Africa was gravely challenged last week when a group of disgruntled African ambassadors in Beijing wrote to Foreign Affairs Minister Wang Yi to complain that citizens from Togo, Nigeria and Benin living in Guangzhou, southern China, were evicted from their homes and made to undergo obligatory testing for Covid-19.
“In some cases, the men were pulled out of their families and quarantined in hotels alone,” the note, seen by POLITICO, said.
The incident, which caused widespread discontent both within Africa and among the diaspora after videos posted on social media showed people of African descent being evicted from their homes, resulting in a rare diplomatic showdown between Chinese and African officials.
Finally, Asian nations that are heavily influenced by China are being more open about some important negative aspects about the relationship.
Vietnamese officials say China is intentionally mislabeling its products as “made in Vietnam” to avoid American tariffs, and have ordered offices to more aggressively examine products’ certificates of origin.
Chinese firms first export products to Vietnam, then change the labeling on packages before exporting the goods to the United States, Japan or Europe, they said.
“Dozens” of products have been identified, Hoang Thi Thuy, a Vietnamese Customs Department official, told state-run media, and goods like textiles, fishery products, agricultural products, steel, aluminum, and processed wooden products were most vulnerable to the fraud.
Looking at the trends, and to paraphrase economist Paul Krugman: If the question is when China will recover, a first-pass answer is never.DONATE
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