The COVID-19 crisis has pushed Europeans’ strategic thinking about China – already shifting because of three developments – past the tipping point. After years of pursuing closer bilateral economic ties, Europeans suddenly realise that they have become dangerously dependent on Chinese trade and investment.
The novel coronavirus plunged emerging markets into crisis. As investors rushed to safety, major emerging economies lost more than $100 billion in foreign currency reserves in the month of March alone. Trade flows shrank. New capital inflows dried up. In many ways, the pandemic has been harder on emerging economies than the 2008 global financial crisis.
Both Chinese President Xi Jinping and US President Donald Trump face challenges to their legitimacy and political future from the pandemic and the two are equally eager to deflect responsibility for the crisis. The Chinese regime has mounted an aggressive campaign to promote the superiority of its system and assert global leadership, despite widely held doubts about the veracity of its claims… In Trump’s case, the urgency is even greater thanks to the presidential election campaign.
As Brazil and India struggle with surging coronavirus cases, a top health expert is warning that the world is still in the very middle of the outbreak, dampening hopes for a speedy global economic rebound and renewed international travel. “Right now, we’re not in the second wave. We’re right in the middle of the first wave globally,” said Dr. Mike Ryan, the World Health Organization’s executive director.
The past is not prologue, and the comparisons to war have limits and detractors. Still, wartime analogies can be useful for an understanding of the potential economic consequences of this crisis. Wars last longer than downturns, and the economic cycle in which we suddenly find ourselves is unlike any peacetime cycle we have experienced in the past half century—including during the Vietnam War and in the aftermath of 9/11.
Supreme Leader Ali Khamenei is now 81-years old. While his health remains a closely guarded secret, his past medical history, age, and the deaths in recent years of other senior leaders have led Iranians to start considering what a post-Khamenei Islamic Republic might look like. There are two main contenders to succeed Khamenei: his 51-year-old son, Mojtaba, and Judiciary Chief Ebrahim Raisi.
Inside the rarified atmosphere of the Great Hall of the People, the aroma of disinfectant will mingle with a whiff of economic distress. A toxic mix before Premier Li Keqiang gives his annual state-of-the-union-style speech at the National People’s Congress in Beijing later this week. Outside, the air will be virulent as the fallout from the Covid-19 crisis threatens to poison diplomatic relations between China and the world’s leading democracies.
Trump remains the unpredictable force that he has been since he began running for the presidency. Trump’s presidency could be destroyed by the pandemic if it continues to rage and the economy remains stagnant or worse. But Trump has shown that he is the ultimate political survivor. Biden should beware.
The hybrid regime ruling Pakistan – a political party backed by the military establishment – has been doing everything to suppress the opposition and dissenting voices in the press but has failed miserably to change the economic fortunes of the country or to bring normalcy to the political discourse.
The pandemic is amplifying the risk of a world-wide food-price spike, which would trigger outright crises in many developing countries. Governments must therefore work together to address disruptions to food supply chains and prevent food protectionism from becoming the post-pandemic new normal.
