“Saying that geopolitical influence does not have much of an influence on the market is an understatement”
Coronavirus a.k.a. COVID-19, Economic Crisis and lashing out at China
There are a total of 24,336,858+ estimated cases recorded in the world right now as of this blog being published.
Ever since the World Health Organization announced the COVID-19 outbreak as a global pandemic on 11th March 2020 due to spreading infection at an alarming rate, several countries since then have announced quarantine and lockdown thus resulting in less workforce further reducing the GDP.
The Graph above clearly proves that the involvement of jobs of people at a certain growth rate will affect the economy of a country directly. But ever since the announcement of lockdown many people could not go to work thus stagnating the growing economy and development. Several companies due to major financial loss and small firms who couldn't handle the situation have also dismissed people from their jobs. According to the Economic Times, World’s biggest lockdown has pushed 12 million people into extreme poverty and 122 million Indians were forced out of jobs last month alone, according to CMIE data. At least 49 million people across the world are expected to go through extreme poverty. People across the world are extremely frustrated about the present situation.
Due to frustration and having difficult to tackle many issues, Several leaders around the world are blaming China for its outburst of pandemic and global crisis. Before reading this further, my personal opinion regarding China:
I don't blame China for the origin of the virus because it's like blaming Japan for Earthquake or blaming nature for disaster, origination and evolution of organisms happens in nature but rather the misinformation China provided about the spreading and severity of the virus and their loose control over their wet market at beginning, of course I believe that WHO might have some partial responsibility on it.
With that out of the way, we have heard in the news about many leaders and foreign ministers around the world blame China directly for the death of people and unemployment. Several countries are angry with China because of the economic crisis happening as an answer to their angry people and journalists.
China's response and retaliation is only adding fuel to fire, making other nations reconsider their choices
As of now, it's an undeniable fact that China is an economic powerhouse and also called "world factory" due to its manufacturing capabilities. Not only having second-highest GDP after the U.S. but also being a permanent member of the UNSC Council having "veto power", enabling them to prevent the adoption of any "substantive" draft Council resolution, regardless of the level of international support for the draft, China or CCP won't simply listen without any objection or accusations. China is known for bullying small nations, distracting by border conflicts, military exercises, and their most infamous trade wars. This is further disrupting the relations between several but especially against China as outspread of the virus wasn't enough, China is considered in a bad light by as of now. This also makes people and their government skeptical about Chinese brands and MNCs due to the spy network and laws of China, where every Chinese established company has to share data and information and reports if the Chinese government asks for.
Gone are the days where countries used to directly engage in wars without the consideration of others. Nuclear weapons and modern arms can be destructive therefore considered barbaric. The world economy is tangled up like strings of different colors, burn one end and rest may also burn, so how do we engage in an alternative way, it's obvious by halting rival's development by economic tactics or a fancy term economic warfare...
The trade war between China and the U.S. and U.S. concerns for national security threats
This is nothing new and has been going on since 2018 prior to a global pandemic, US and China have imposed huge tariffs worth hundreds of billions of dollars on one another's goods, due to accusations of intellectual property theft and unfair trade practices, imposing stricter practices and sanctions on Chinese Companies. The U.S.'s appeals to investigate COVID-19 has also caused the stiffer relationship between them. The U.S. has also banned Huawei, a major Chinese company known for its telecommunications equipment and smartphone is also not allowed to work with U.S. companies like Chipmaker Qualcomm and major tech giant Google to provide resources and equipment to Huawei. The U.S. believes it is also a national security threat to them as Huawei is compelled to share data with the Chinese government due to their laws. Sensitive information of American citizens and defense forces can be compromised used against them in potential conflicts.
China's anger on Australia's urge to investigations
Australia pushed for a WHO probe into coronavirus' origins. This has enraged Chinese officials. China has tried to bully Australia by restricting tourism and trade. Beijing slammed an 80% "anti-dumping" tariff on Australian barley, which could cost Australia 500 million Australian dollars or $350 USD million a year. China is also one of Australia's largest beef exporters and also has tried increasing tariffs restrictions on it. Chinese ministers have also given juvenile yet offensive statements like "being a chewing gum on a shoe's sole", which has hurt Australia's sentiments. Australia is also offering Hong Kong Citizens residence after the new Chinese law stated in Article 38 in which that applies to Hong Kong.
Indo-China border conflict and anti-china sentiments
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| Galwan Valley: Satellite images show PLA structures on India border |
India and China have rivals since 1960, mostly after independence. Their relations have been sour with their border disputes and 1962 Sino-Indian conflict is known throughout the world. The peace talks between nations have been going on for years with no conclusions. The recent brawl between Indian and Chinese troop have resulted in the death of 20 Indian soldiers and unknown PLA troops, but some sources of India claims it to be over around 40. This sudden rude entrance inside the Indian border has triggered the whole nation with anti-china sentiments. India has started a domino effect with other nations like the U.S. banned 59 Chinese apps stating, these apps can be potential spy threats, one of these popular apps are TikTok and MobileLegends. India has also decided to revise the current foreign trade policy even before the pandemic and recent Galwan Valley conflict. It was an eye-opening incident for India. India is also alert of Chinese take over of Indian firms and stakes. FDI policy is monitoring and checking investments into Indian companies from neighboring countries after it was revealed that China’s central bank has raised an equity stake in HDFC above 1%. Department for Promotion of Industry and Internal Trade(DPIIT) of India issued a notice conveying that all foreign direct investment(FDI) into India from countries sharing land borders with India will be allowed only under government approval. Citizens of India have already started boycotting Chinese goods and protesting against China. India is also on alert as China-Pakistan relations are developing with military and economy.
South China Sea Conflict
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| Spratly Islands |
China's dispute with nations like Taiwan, Malaysia, the Philippines, Vietnam, and Brunei on the Spratly Islands has also triggered another frustration among these nations. The dispute is by diplomatic stalemate and the employment of military pressure techniques, like exercises. According to an article in Wikipedia, "The Spratly Islands are important for economic and strategic reasons. The Spratly area holds potentially significant, but largely unexplored, reserves of oil and natural gas, it is a productive area for world fishing, it is one of the busiest areas of commercial shipping traffic, and surrounding countries would get an extended continental shelf if their claims were recognized. In addition to economic incentives, the Spratlys sit astride major maritime trade routes to Northeast Asia, giving them added significance as positions from which to monitor maritime activity in the South China Sea and to potentially base and project military force from."
Conclusion of conflict and global pandemic outburst
After tolerating and suffering through a global pandemic, these actions by China are fairly objectifying and are underhanded methods that are only decreasing China's stand and impression on other Countries. Both civilians and government aren't happy with the adding of problems created by China one after another. Hence both nationalists and governments are imposing restrictions on goods and products of China to hurt the Chinese economy, whether it is effective or not will be a report for another time, but CCP is already starting to notice the opposition. The smartphone consumers in India are already preferring alternatives like Apple, LG, Asus, Samsung, or HTC. Huawei is absent in the U.S. market. And Australia, India, U.S., Japan, and other nations have already formed a strategic alliance and strengthen their bonds meanwhile China is pushing over Belt and Road Initiative involved nations and allied with them.
The enemy of my enemy is my friend.
But overall many big Chinese firms like Huawei and ByteDance which owns TikTok are hurt in the cross-fire of economic warfare.
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