Intercity 225
Member
- Joined
- 2 Mar 2014
- Messages
- 329
Covid-19 is the biggest world event since the end of the Cold War.
And historically, after every major world event, there is a shift in global power.
I suspect that the current crisis will be no different.
But will it be to China’s benefit, or to its detriment?
We do not yet know how long it is going to take for the world to fully recover from the Covid plague.
But it will, and once it does the major powers on the planet will begin to shape its future.
The first step will be to fully understand how this hideous disease erupted in the first place.
And then how it could spread across the globe like wildfire, leaving devastation in its wake.
Although now is not the time to be pointing blame.
There can be no doubt that the virus first appeared on Chinese soil.
That its severity was initially downplayed by the Chinese government.
And that the Chinese infection rate and mortality numbers cannot be trusted.
As a result, once the dust settles, the Chinese government are going to have the most pressing questions to answer of all.
How they respond, will determine their nation’s future.
Can they whether the storm and continue the phenomenal increase in world power they have achieved over the last thirty years?
Or will Covid-19 be the start of China’s decline?
A very brief case for China to continue its growth:
Pre-Covid China had been experiencing non-stop rapid economic progress for 30 years and was on track to replace the US as the world’s largest economy by 2050. It has been accelerating at such a pace that for it to fully derail would require a shift of world power of monumental proportions. They have become established as “the world’s factory” with a huge percentage of FMCG manufactured there. They have the infrastructure and skills already in place and moving that elsewhere on a grand scale could only be achieved at great inconvenience and cost. They have the world’s largest population and the fourth largest landmass – which is also rich in resources. As such they have the manpower and materials required to become fully self-sustainable if necessary. They have become world leaders in some technologies, famously 5G and including and of particular interest to this forum – in rail. Hong Kong, one of the world’s big three financial centres along with London and NYC is being fully integrated into China – this will help reduce its reliance on manufacturing. And WTO terms are excellent for China, its growth accelerated even faster once it became a member in 2001.
A very brief case for China to decline:
China’s rapid growth has been mainly funded with American and EU money and it operates a large trade surplus with each to their great advantage. This had already started to unnerve the western powers even before Covid. In Britain this has been most noticeable from concerns regarding Huawei and Chinese investment in Hinckley Point. China’s perceived lack of responsibility during the Covid-19 outbreak has pushed this lack of trust even deeper, as the US and Europe continue to be ravaged by the disease. The economic damage to all western nations has been severe and risk assessments of trading with China on the same scale as pre-Covid will be undertaken. The other major world players may look to bring production of supply in house, or to weaker countries than China where they can exercise more influence and control.
Very brief summaries of how the major and emerging world powers may influence China’s future
As the world’s only superpower, the United States has a major role to play in shaping the globe’s post-Covid future. Although before the outbreak, China was on track to become the world’s largest economy by 2050, it is widely accepted that the US would remain the world’s most powerful nation thanks to its general global influence and unmatched military capability. Even before Covid, the US was beginning to embark on a protectionist path, epitomised by the start of a trade war with China itself, as they attempt to claw back some of their huge trade deficit and reinvigorate their declining “rust belt” manufacturing industries. America’s role in the immediate term will be hugely influenced by who wins their Presidential election at the end of the year (providing it can take place). If Trump wins, expect more of the same, if Biden wins things could be quite different.
The development of the EEC into the European Union in 1993 and its expansion to include the former Eastern Bloc countries from 2004 onwards has allowed its major nations, France and Germany to deploy their greatest influence on the world stage since WWII. A position that, until recently, the United Kingdom was also able to enjoy. Like the US, the EU has a huge trade deficit with China, especially regarding manufactured goods. Will the Covid outbreak mean that the EU looks to move currently outsourced manufacturing into the bloc? On face value this could provide a welcome boost to the EU’s poorer eastern countries and/or the Slavic states seeking accession. Instead of, or in addition to this, it may also start to source more goods from other developing nations rather than China. This would require significant work and initial high setup costs but would deliver long term benefits including increased European world power and influence.
The collapse of the USSR during the last major global power shift meant the end of what was the world’s second most powerful nation after the USA. Its major successor state, Russia, whilst retaining the bulk of the USSR’s immense military might and under strongman leadership from Putin, has been unable to exert the same level of world influence as its predecessor. That being said, it has remained a force to be reckoned with and has become renowned for deploying disruptive rogue state behaviour to its neighbours and the west. Who they choose to align with, if anyone, in the post-Covid world remains to be seen but the position they take will be significant in shaping what comes next. If the US and Europe were to reduce reliance on China could Russia move in and form closer bonds, leading to the start of a new East/West major power divide?
In recent times, after China, India has had the second most rapid growth and development on a grand scale. It is widely seen to be following a remarkably similar path to China albeit a few years behind, will Covid provide it with the opportunity to catch up or even overtake? It has the greatest opportunity of all the emerging major powers to become a ready-made alternative to China with a similar global location and the world’s second largest population. Even before Covid, India had started to benefit from significant investment from the middle east and ever-increasing investment from the west. The widespread use of English in the country also makes it easy for the western world to set up new business and trade links with Indian companies.
Africa is the wildcard in the pack, could it become the new “world’s factory”? Africa has a huge population, only slightly behind China’s own and an abundance of resources. The continent is also becoming ever more integrated. The African Union was founded in 1999, the Eco currency is due to rolled out across 15 countries later this year and the aim is to have a single African currency by 2023 – although that timeframe may slip. The continent has benefited from Chinese investment in recent years and this may well continue, but could it also become a true competitor to China if US and European money is ploughed into the continent in a Marshall Plan style. There would be benefits for both the US and the EU for taking such a position, they’d have much more influence over the means of production in Africa than they would in China, the geographic distance is shorter, making trade quicker and more efficient and in Europe’s case it would help reduce the number of migrants attempting to cross the Mediterranean. On the flip side, the amount of work and time required to get Africa to the level required would be immense.
Over to you.
TLDR – China has seen phenomenal growth over the last 30 years and was on track to become the world’s largest economy by 2050. They have achieved that by becoming the “world’s factory” with their income predominantly derived from the sale of goods to the US and Europe, will this continue in the post-Covid world?
And historically, after every major world event, there is a shift in global power.
I suspect that the current crisis will be no different.
But will it be to China’s benefit, or to its detriment?
We do not yet know how long it is going to take for the world to fully recover from the Covid plague.
But it will, and once it does the major powers on the planet will begin to shape its future.
The first step will be to fully understand how this hideous disease erupted in the first place.
And then how it could spread across the globe like wildfire, leaving devastation in its wake.
Although now is not the time to be pointing blame.
There can be no doubt that the virus first appeared on Chinese soil.
That its severity was initially downplayed by the Chinese government.
And that the Chinese infection rate and mortality numbers cannot be trusted.
As a result, once the dust settles, the Chinese government are going to have the most pressing questions to answer of all.
How they respond, will determine their nation’s future.
Can they whether the storm and continue the phenomenal increase in world power they have achieved over the last thirty years?
Or will Covid-19 be the start of China’s decline?
A very brief case for China to continue its growth:
Pre-Covid China had been experiencing non-stop rapid economic progress for 30 years and was on track to replace the US as the world’s largest economy by 2050. It has been accelerating at such a pace that for it to fully derail would require a shift of world power of monumental proportions. They have become established as “the world’s factory” with a huge percentage of FMCG manufactured there. They have the infrastructure and skills already in place and moving that elsewhere on a grand scale could only be achieved at great inconvenience and cost. They have the world’s largest population and the fourth largest landmass – which is also rich in resources. As such they have the manpower and materials required to become fully self-sustainable if necessary. They have become world leaders in some technologies, famously 5G and including and of particular interest to this forum – in rail. Hong Kong, one of the world’s big three financial centres along with London and NYC is being fully integrated into China – this will help reduce its reliance on manufacturing. And WTO terms are excellent for China, its growth accelerated even faster once it became a member in 2001.
A very brief case for China to decline:
China’s rapid growth has been mainly funded with American and EU money and it operates a large trade surplus with each to their great advantage. This had already started to unnerve the western powers even before Covid. In Britain this has been most noticeable from concerns regarding Huawei and Chinese investment in Hinckley Point. China’s perceived lack of responsibility during the Covid-19 outbreak has pushed this lack of trust even deeper, as the US and Europe continue to be ravaged by the disease. The economic damage to all western nations has been severe and risk assessments of trading with China on the same scale as pre-Covid will be undertaken. The other major world players may look to bring production of supply in house, or to weaker countries than China where they can exercise more influence and control.
Very brief summaries of how the major and emerging world powers may influence China’s future
As the world’s only superpower, the United States has a major role to play in shaping the globe’s post-Covid future. Although before the outbreak, China was on track to become the world’s largest economy by 2050, it is widely accepted that the US would remain the world’s most powerful nation thanks to its general global influence and unmatched military capability. Even before Covid, the US was beginning to embark on a protectionist path, epitomised by the start of a trade war with China itself, as they attempt to claw back some of their huge trade deficit and reinvigorate their declining “rust belt” manufacturing industries. America’s role in the immediate term will be hugely influenced by who wins their Presidential election at the end of the year (providing it can take place). If Trump wins, expect more of the same, if Biden wins things could be quite different.
The development of the EEC into the European Union in 1993 and its expansion to include the former Eastern Bloc countries from 2004 onwards has allowed its major nations, France and Germany to deploy their greatest influence on the world stage since WWII. A position that, until recently, the United Kingdom was also able to enjoy. Like the US, the EU has a huge trade deficit with China, especially regarding manufactured goods. Will the Covid outbreak mean that the EU looks to move currently outsourced manufacturing into the bloc? On face value this could provide a welcome boost to the EU’s poorer eastern countries and/or the Slavic states seeking accession. Instead of, or in addition to this, it may also start to source more goods from other developing nations rather than China. This would require significant work and initial high setup costs but would deliver long term benefits including increased European world power and influence.
The collapse of the USSR during the last major global power shift meant the end of what was the world’s second most powerful nation after the USA. Its major successor state, Russia, whilst retaining the bulk of the USSR’s immense military might and under strongman leadership from Putin, has been unable to exert the same level of world influence as its predecessor. That being said, it has remained a force to be reckoned with and has become renowned for deploying disruptive rogue state behaviour to its neighbours and the west. Who they choose to align with, if anyone, in the post-Covid world remains to be seen but the position they take will be significant in shaping what comes next. If the US and Europe were to reduce reliance on China could Russia move in and form closer bonds, leading to the start of a new East/West major power divide?
In recent times, after China, India has had the second most rapid growth and development on a grand scale. It is widely seen to be following a remarkably similar path to China albeit a few years behind, will Covid provide it with the opportunity to catch up or even overtake? It has the greatest opportunity of all the emerging major powers to become a ready-made alternative to China with a similar global location and the world’s second largest population. Even before Covid, India had started to benefit from significant investment from the middle east and ever-increasing investment from the west. The widespread use of English in the country also makes it easy for the western world to set up new business and trade links with Indian companies.
Africa is the wildcard in the pack, could it become the new “world’s factory”? Africa has a huge population, only slightly behind China’s own and an abundance of resources. The continent is also becoming ever more integrated. The African Union was founded in 1999, the Eco currency is due to rolled out across 15 countries later this year and the aim is to have a single African currency by 2023 – although that timeframe may slip. The continent has benefited from Chinese investment in recent years and this may well continue, but could it also become a true competitor to China if US and European money is ploughed into the continent in a Marshall Plan style. There would be benefits for both the US and the EU for taking such a position, they’d have much more influence over the means of production in Africa than they would in China, the geographic distance is shorter, making trade quicker and more efficient and in Europe’s case it would help reduce the number of migrants attempting to cross the Mediterranean. On the flip side, the amount of work and time required to get Africa to the level required would be immense.
Over to you.
TLDR – China has seen phenomenal growth over the last 30 years and was on track to become the world’s largest economy by 2050. They have achieved that by becoming the “world’s factory” with their income predominantly derived from the sale of goods to the US and Europe, will this continue in the post-Covid world?