China's Coronavirus Crisis and the Growing Global Consequences

As China tries to curb the spread of the novel coronavirus, global ramifications of the disease are becoming more evident.    

Over the past few weeks, the BBC and New York Times have reported that journalists criticizing the Chinese Communist Government's handling of the crisis have either fallen gravely ill or gone missing. General Secretary Xi's regime may have suppressed or ignored early warning signs of the virus that has now spread to at least 25 countries. It is estimated that 150 million people remain quarantined in China.

While news reports focus on the human tragedy and immediate impact to major companies like Apple, how much of a risk does the disease pose to American businesses and the global economy?  

At an event at Hudson Institute on the coronavirus, Scooter Libby spoke about the unreliability of China's reports on the disease:

"In the West, many continue to question the Chinese statistics. In China, doubts about authorities advance in the wake of Hong Kong demonstrations and weaker detentions. Beneath the surface, beneath these statistics that mark these intertwined challenges, lurk human tragedies of a kind evoked by Camus and Solzhenitsyn, by Ibsen and Kessler."

Writing for NBC, Tim Morrison outlined how the illness has exposed the U.S. medical system's reliance on China for critical drugs and supplies:

"Everything from antibiotics to chemotherapy drugs, from antidepressants to Alzheimer’s medications to treatments for HIV/AIDS, are frequently produced by Chinese manufacturers. What’s more, the most effective breathing masks and the bulk of other personal protective equipment — key to containing the spread of coronavirus and protecting health care workers — and even the basic syringe are largely made in China. The basic building blocks of U.S. health care are now under Xi’s control."

In the Wall Street Journal, Walter Russell Mead wrote about the significant economic consequences of a prolonged global outbreak:*

"There are signs that Chinese authorities are still trying to conceal the true scale of the problem. Many now fear the coronavirus will become a global pandemic. The consequences of a Chinese economic meltdown would travel with the same sweeping inexorability. Commodity prices around the world would slump, supply chains would break down, and few financial institutions anywhere could escape the knock-on consequences. Recovery in China and elsewhere could be slow, and the social and political effects could be dramatic."

In the New York Times, Michael Pillsbury discussed how the disease affects the U.S.-China trade deal: 

"'We need to balance a defensive concern with limiting a pandemic that can harm our own economy against the desire by some to be overzealous,' ...[s]uch a response could 'provoke paranoia among China’s hard-liners, who already claim that the U.S. is ruthlessly exploiting the health crisis,' he said."

Tom Duesterberg in the Washington Times spoke about what U.S. companies can do to prepare for economic symptoms of the virus:

"'Global firms, including those in the United States, are certainly going to have to take this into account looking ahead,' Mr. Duesterberg said. 'There are all kinds of reasons to diversity your supply chains away from China. This inability to control this situation is another one.'"

On Fox Business, Rebeccah Heinrichs talked about the role of China's Communist Party in under-reporting confirmed coronavirus cases:

"There's concerns because the Chinese Communist Party has not been transparent so far, and has not been forthcoming with information. [The numbers of dead] could be much, much higher. The Chinese people, obviously, are right to have great concern and doubt in the truth coming out of their own government."

*Two weeks ago, Walter Russell Mead wrote an op-ed critical of the Chinese government’s response to the outbreak of the novel coronavirus, to which Chinese government officials and its propaganda machines responded with a campaign of smears and lies against him. The Wall Street Journal editorial today highlights the hypocrisy in the government response of banning its reporters from the country.

The latest moves by the Chinese Communist Party only serve to underscore Mead’s arguments. His work, and the work of Hudson’s other China experts, exposes the challenges and threats posed by the People’s Republic of China under General Secretary Xi.

Quotes have been edited for length and clarity.

Hudson Highlights

New Episode of The Realignment

On the latest episode of The Realignment, Saagar and Marshall sat down with Oren Cass for an exclusive interview on the launch of American Compass, a new organization arguing for a new conservative approach to economics.

Commentary

Middle East

In the Washingon Post, Jon Lerner discussed Israel's potential next steps under the Trump plan:

“'Under the plan as proposed, Israel is free to move forward with extending its sovereignty to the areas that would be under its control,” if the U.S.-proposed map were adopted, said Jon Lerner, a senior fellow at the Hudson Institute and a former Trump administration official. 'However, just because they are free to do so doesn’t mean that they should do so, or do so immediately, and I think that’s where the tension is.'”

In Mosiac Magazine, Jon Lerner and Michael Doran ​discuss the possibilities and true purpose of the peace plan:

"[N]umerous critics have stepped forward to argue that ... [the plan will] never work. While Michael Doran agrees with them 'completely,' he also believes their position is 'nonsensical, because it assumes they know that there is a solution out there' that will work. ... In Lerner’s understanding, its crafters didn’t intend to dictate terms to the parties; nor did they expect the outcome to be a 'signing ceremony on the White House lawn.' Rather they wished to reshape the conflict to the benefit of both Israeli and Palestinians, and to create a more realistic framework for future negotiations."

In an interview on Secure Freedom Radio, Doug Feith gave an overview of President Trump's peace plan and the challenge posed by Palestinian opposition:

"What runs through the plan is recognition that consensual resolution of the conflict ... may not be possible because of the Palestinian leadership ... [showing] itself completely uninterested in terminating the conflict. They laid out realistic points about the history of rejectionism by the Palestinian leadership."

China

Tim Morrison analyzed the need for the Trump administration to scale up its efforts countering Huawei's growing presence abroad in Reuters:

"The administration has to decide how to match its rhetoric on China with policies to deny China key technology and industry. ... Too many tools have not been brought to the President because the entire administration isn't yet in the fight. That must end."

Michael Pillsbury echoed calls for a more hawkish approach toward China on Huawei 5G competition on Fox Business:

"Huawei is one of [China's] ... national champions. A company in China that goes far beyond anything we have. It would have to be an American company in which we had our entire national pride invested, that's how they think of Huawei."

Quotes have been edited for length and clarity.

Hudson Institute at the Munich Security Conference

Hudson convened a roundtable of leading thinkers and decision-makers of defense transformation and next-generation weaponry on the sidelines of last week’s Munich Security Conference to discuss Europe’s integration of new and emerging technologies and increasing the operational effectiveness of their military forces.

The panel included Deputy Prime Minister Artis Pabriks, U.S. Representative Mike Turner, Chief of Executive Staff to the German Ministry of Defense Nico Lange, Hudson fellows Bill Schneider, and Bryan Clark.

Upcoming Events

Hudson Institute Welcomes Bryan Clark

Bryan Clark has joined the Institute’s policy team as senior fellow. 

His research will focus on how military forces could employ emerging or advancing technologies, the costs and benefits relative to existing approaches, ways the government could leverage commercial efforts, and how the U.S. military could counter adversary use of new technologies.

You can read his full bio here. 

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