US using coronavirus epidemic to demonize China

By Dennis Etler

Suggestions that the COVID-19 (coronavirus) epidemic in China which is concentrated in and around Wuhan, Hubei, will lead to a shift in the global manufacturing supply chain and a decoupling of the economies of China and the US are overblown and short-sighted. The US government and its minions in the media are using the epidemic to further demonize and stigmatize China in its on-going war against it.

But, the blow-back from the COVID-19 outbreak and the Western-led response isolating China will have the reverse effect on the world economy than when China became the engine for global economic growth following the US-led 2007 financial collapse.

By contributing more than one-fifth to global GDP growth, far more than the US, China propped up the world economy which would have otherwise fallen into a severe depression. China’s economy is essential for the health of the global economy, especially the US economy.

If anything the disruption in the global supply chain and trade with China caused by the epidemic will accelerate the impending market collapse in the US that many analysts have predicted. After China gets back to work, which is already happening, the impact of the epidemic on China’s GDP will likely be minimal. The Chinese economy is very resilient and will quickly bounce back. Pent up domestic demand and consumer exuberance after the epidemic subsides may actually boost economic growth.

On the other hand, there will be a negative impact on the global economy exacerbated by the short-sighted closing of borders to China and those visiting China. The gloating and glee over China’s troubles broadcast by Wilbur Ross, US Commerce Secretary, who expressed the hope that the epidemic would lead to manufacturing jobs returning to the US, is not only callous but mistaken.

Trump’s trade war with China resulted in a manufacturing recession in the US, not its revival. The epidemic will not reverse that trend but accelerate it since any slowdown in the global economy will also impact US exports.

The US economy is on tenterhooks, wallowing in debt and buoyed by global reliance on the petrodollar. If demand for oil in China decreases because of an economic slowdown the resulting decline in oil prices will adversely affect the US economy which is now more commodity-driven than ever and the US will find it ever more difficult to finance its burgeoning budget deficits.

China will continue to advance. Its companies are quick to adapt and its consumers quick to embrace new technologies from online shopping and mobile payments to high-speed rail and electric vehicles. China is leading the way in using IT and AI in building an inclusive healthcare system and creating 21st-century smart cities. China is the world's largest trading nation and its Belt and Road Initiative is integrating the global south as a future competitor to the imperial West.

Time will show that all the hysteria around the virus is unwarranted. China will contain and control it. The lessons learned will strengthen China's defenses, just as the human body develops an immunity to a viral infection. COVID-19 will help immunize China against future epidemics. Once the epidemic recedes China will emerge stronger than ever.

Dennis Etler is a former professor of anthropology at Cabrillo College in Aptos, California.

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