How sickening that China will now exploit the fallout of virus it gave the world
It’s set to grow fat on the paralysis it’s inflicted on the West. In this disturbing analysis, ALEX BRUMMER deplores...
THERE is scant comfort for Britain and other Western democracies in seeing China – the source of the deadly Covid-19 virus – emerging so rapidly and strongly from the crisis.
The Chinese economy is already up and running again even as the US, the UK and other nations are battling to hold back the tide of illness, death and economic destruction plunging them into a recession ‘worse than the global financial crisis’, according to the International Monetary Fund.
What is becoming clear is that by ramping up production and driving recovery, China could be the big winner from the global downturn – and that is an alarming prospect.
The ability of its leader, Xi Jinping, to invoke the ruthless powers of the state to combat coronavirus and to make sure dissenting voices were silenced gave the Chinese a huge advantage.
This week, Beijing proudly announced it had no new coronavirus deaths.
Furthermore, any new cases are the result of Chinese citizens infected abroad returning home.
So China is flaunting its triumph over coronavirus – but be in no doubt it is also set to exploit the paralysis that has enveloped Western economies to its own ends, in terms of finance, and greater global power.
Yet this is the nation that failed to alert the world at the earliest opportunity to this new strain thought to have evolved in its unsanitary live animal markets; allowed the virus to incubate and spread for vital weeks before conceding it was a major public health issue; and which has by common consent been less than honest about infection and death rates.
Nor can we ignore growing international concern that in the race to return to business as usual, many experts fear the lockdown in Wuhan, where Covid-19 appeared, has been lifted too early.
Yesterday, tens of thousands of people left the city, igniting fears of a second wave of infections spread throughout China – and beyond.
China’s actions have provoked a belligerent response from the UK’s political Right about the ‘reckoning’ to come – and, yes, the international community must unite on this when the time is right. But it will be a challenge – for which we only have ourselves to blame.
The broader, more depressing truth is that the acquiescence of the West to China’s drive for manufacturing, economic and diplomatic domination leaves us handicapped.
Yes, Donald Trump’s ‘America First’ rhetoric has been actively deployed by applying $115billion of tariffs on Chinese goods entering the US – certainly more effective than his posturing yesterday about cutting funds to the World Health Organisation over its China bias.
But the damage was done long before that. In 2001, the World
Trade Organisation chose to treat China as a developing country, opening doors to low-cost Chinese manufactured goods without seeking reciprocal tariff arrangements.
The result is that the laptop on which I am writing carries the Californian Hewlett Packard brand, but when purchased online was shipped to me at home from a Chinese factory. Similarly, my office chair, branded Japanese calculator, and stapler are all from China. Marks & Spencer used to boast that most of its clothing was made in the UK. Faced with cheaper competition, it too turned to China in the Noughties and lost its unique selling point and quality.
In this way China has punched its way to within a hair’s breadth of the US as the world’s largest economy, and is responsible for 16 per cent of the world’s output.
It is the biggest exporter of goods, with a 12.8 per cent market share, against 8.5 per cent for the US and 8 per cent for Germany.
One of Britain’s defining characteristics in the post-Thatcher era has been its openness to foreign investment and trade – and the red carpet was rolled out for China.
Ex-chancellor George Osborne hailed it as a triumph when he persuaded China to buy almost 9 per cent of the UK’s largest water utility, Thames Water, in 2012.
When China launched its own Asian Infrastructure Investment
Bank, the UK was the first Western democracy to become a shareholder, despite US disdain.
The Cameron-Osborne government also welcomed Chinese financing and investment in the £22billion-plus nuclear power station at Hinkley Point in Somerset.
Ministers somehow overcame initial reservations from the security services over potential snooping and sensitive technology transfer opportunities.
In early March this year, even as coronavirus was sweeping out of Wuhan, China’s Jingye group gained a foothold in another UK strategic industry when it bought the British Steel plant at Scunthorpe and on Teesside, saving 3,000 jobs.
Of course, China’s commercial global ambitions have never been a secret. Its ‘Belt & Road’ initiative – or ‘New Silk Road’ – was unveiled in 2013 and aims to be the
‘Acquiescence of the West leaves us handicapped’
‘The biggest battleground is technology’
world’s biggest infrastructure and development project, with investment in 70 or so countries and international organisations.
Meanwhile, Australia’s 25-year recession-free run (until now) is largely down to its role supplying natural resources to China, with British miner Rio Tinto heavily involved.
China investment in Africa’s natural resources and infrastructure dwarfs that of the West and of principal development institutions such as the World Bank.
Beijing is also taking on the role once adopted by Britain as the world’s ‘port champion’, building facilities in West Africa and Sri Lanka and taking over the port of Piraeus in Athens from Greece’s government.
The biggest battleground, however, is technology. The US National Security Council has identified China and its companies as the biggest thieves of intellectual property and patents in the world, responsible for up to 80 per cent of such behaviour.
This is why it co-ordinated action that prevented a Chinese takeover of the World Intellectual Property Organisation (WIPO), the guardians of new tech discoveries, many of which come out of Stanford University and Silicon Valley. Unlike Britain, America has woken up to China’s use of its digital and telecoms prowess to keep tabs on the West and gain a technological edge.
Before Covid-19, the most contentious issue taken by Boris Johnson’s government was to hand Chinese telecoms giant Huawei a 35 per cent stake in the roll-out of the UK’s next-generation 5G mobile networks, excluding the company from ‘sensitive’ parts of the system.
As part of the ‘reckoning’ to come, the Government will be under enormous pressure to end the arrangement in the wake of this pandemic.
China already has a foothold in the British tech industry having managed to wrest control of the Chinese operations of Cambridge-based Arm Holdings from its Japanese owners.
Earlier this week, the Government intervened to head off a coup at Imagination Technologies – a British maker of screen chips for Apple – that would have put Beijing-approved directors on a board already dominated by a Chinesefunded private equity outfit.
It was too little, too late, critics would argue.
Drawing closer to China is all well and good if it opens up new export opportunities – as it has for one of the UK’s major pharmaceutical companies, AstraZeneca, which has seen phenomenal growth there.
However, the UK cannot afford to indulge its complacency about the ruthless ambition of a totalitarian state that will stop at nothing in its efforts to dominate the world economy.
A British and global fightback will be needed – and fast.