China: Intimidation Works Both Ways

China: Intimidation Works Both Ways, by Jim Dunnigan.

Very aggressive diplomacy, even by Chinese standards, is being applied against nations that contradict the Chinese assertions that they were not responsible for covid19 but the Americans were, and China has contained the virus inside China. …

When some Chinese economists recently published their analysis of the virus impact on the economy (20 percent unemployment rate), the government quickly forced that report to be withdrawn and repeated that the official unemployment rate was six percent. According to locals in many parts of China there is higher than usual unemployment and other economists believe GDP will at least shrink a bit this year and halt the decades of annual GDP growth. …

The Chinese diplomatic bullying may work on some nations but it is less successful in convincing at restoring confidence in the Chinese economy.

The number of foreign firms pulling their manufacturing operations out of China keeps increasing. Chinese economists’ estimate of 20 percent unemployment explains why so many foreign firms are no longer working with Chinese companies or in China.

The government was concerned about losing credibility with their own population and foreigners and have made the situation worse by trying to pretend reality was being “misinterpreted” by foreigners. This strategy has backfired and now the government is worse off internally and externally. Threats of economic retaliation against major trading partners, like Australia, failed and made matters worse for China.

China is also concerned that most other East Asian nations did a much better job of dealing with covid19. The very effective response of Taiwan was particularly embarrassing, as Chinese pressure in the UN has kept Taiwan from belonging to international health groups like WHO. That makes it more difficult for the rest of the world to learn how Taiwan was more effective in dealing with covid19. Local allies of Taiwan, like Japan, South Korea, Singapore, Vietnam and so on are able to get Taiwan virus tips quickly because all these nations are united in confronting Chinese aggression in the region. Covid19 is seen as just another problem with being a neighbor of China.

One very practical reason for the Chinese strategy was the realization that the health problems caused by covid19 were minor compared to the damage done by shutting down the economy in areas where the virus was active. People want to go back to work, but they are not happy with going back to work while the government insists there is no virus risk at all. That is not true and while healthy people are able to resist the virus as they would the annual arrival of Influenza, covid19 is particularly lethal to the elderly and anyone with serious health problems.