Globalization – the virus edition

This was the week that the global virus infection and death numbers started to balance out in China to some extent, with an ironic sense growing that the country is becoming one of the safest places to be. The United States was thoroughly spooked, and the vacuum of leadership that characterizes the Trump administration, the consequences of having such an inappropriate individual in the most powerful position in the world, was on full display. The key difference between this global crisis and others in the past, is the lack of leadership. In the GFCrisis and others in the past, the world could always assume that the United States could be counted on as the ultimate guarantor of stability. This time, with Trump in the hot seat, that is not true. But there is today no alternative. China cannot, as yet, take on the role of last defence. Nor can Europe or Russia. And so the markets spin. 

China is slowly getting back to work, but it is a markedly different China from the one we knew before the lunar new year. This week we heard how a bunch of property developers have had to close, and there will be more news on that front in the weeks ahead. The impact on employment is the big question, as many of the companies that will survive have found they can do without so many people. Many people have also found that they can live perfectly well spending less money on restaurant meals and trips to the shopping mall, and the growing global impact of the virus will inevitably hit exports in the months ahead. This year is going to be tough. Meanwhile, the US-China relationship appears to be worsening further. Where is it heading? Great question, but the scenarios are becoming starker. 

The most interesting articles of the week came from that exceptional and unique Chinese media operation, Caixin. The past few weeks have seen some loosening of controls on discussion by the system, but Caixin’s pieces on the epidemic are puzzlingly robust even so. Worth going over there to have a read.

Quarantined or not, enjoy the weekend as best you can, and wash your hands.