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Geopolitical Futures daily memo on coronavirus and economic impact
DerekJohnson
Administrator, Swaye's Wigwam Posts: 60,667
in Tug Tavern
(Normally I post these in the Wam, but putting here today in the Tug.)
A global leader
The U.S. has surpassed China as the world leader in confirmed coronavirus cases. There are all sorts of problems with the numbers in both countries, of course, but there’s little reason to doubt the broader trends we’re seeing. The U.S. is on an exponential growth curve, and its limited testing capacity means the vast majority of infections, particularly mild or asymptomatic ones, aren’t even being counted. The true scale of the U.S. outbreak, along with the success of its social distancing measures, probably won’t become clear for at least another month.
China’s guarded confidence
As always, watch what China does, not what it says. And what it’s doing – steadily lifting internal restrictions on movements while locking down its international borders – suggests Beijing is reasonably confident it has the outbreak under control but that it remains nervous about a second wave of cases triggered by the return of citizens stuck abroad. Starting Saturday, almost all foreigners will be barred from entering the country, according to a Foreign Ministry statement on Thursday. Beijing is also restricting the number of international flights into the country to make it harder for infected Chinese citizens to come home.
It’s a curious move, given just how bleak China’s economic prospects are. For example, new data from the National Bureau of Statistics released Friday showed profits among Chinese industrial firms crashing more than 38 percent during the first two months of the year. But then again, with the European and U.S. economies grinding to a halt, there aren’t many buyers for Chinese exporters to sell to, anyway. This is partly why we’ve seen Beijing try to recuse itself from the blame game it had been playing with Washington over the virus, and why talks over bilateral cooperation against the pandemic have resumed.
A global leader
The U.S. has surpassed China as the world leader in confirmed coronavirus cases. There are all sorts of problems with the numbers in both countries, of course, but there’s little reason to doubt the broader trends we’re seeing. The U.S. is on an exponential growth curve, and its limited testing capacity means the vast majority of infections, particularly mild or asymptomatic ones, aren’t even being counted. The true scale of the U.S. outbreak, along with the success of its social distancing measures, probably won’t become clear for at least another month.
China’s guarded confidence
As always, watch what China does, not what it says. And what it’s doing – steadily lifting internal restrictions on movements while locking down its international borders – suggests Beijing is reasonably confident it has the outbreak under control but that it remains nervous about a second wave of cases triggered by the return of citizens stuck abroad. Starting Saturday, almost all foreigners will be barred from entering the country, according to a Foreign Ministry statement on Thursday. Beijing is also restricting the number of international flights into the country to make it harder for infected Chinese citizens to come home.
It’s a curious move, given just how bleak China’s economic prospects are. For example, new data from the National Bureau of Statistics released Friday showed profits among Chinese industrial firms crashing more than 38 percent during the first two months of the year. But then again, with the European and U.S. economies grinding to a halt, there aren’t many buyers for Chinese exporters to sell to, anyway. This is partly why we’ve seen Beijing try to recuse itself from the blame game it had been playing with Washington over the virus, and why talks over bilateral cooperation against the pandemic have resumed.