China’s COVID-19 Propaganda Offensive

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The Chinese Communist Party’s latest propaganda offensive has targeted the United States squarely in the stars and stripes. This week has seen Chinese government officials, and media representatives come out and directly attack the US, and purposely spread misinformation about COVID-19. Beijing is now attempting to deny that the virus started in Wuhan, and has in fact blamed the US for creating the virus, and subsequent outbreak. China’s reason for this shift in propaganda tactics is producing a number of theories that are not outside the realm of possibility. One theory is that China is attempting to flip responsibility for COVID-19 on the US because its now fragile global reputation cannot absorb another hit. The Chinese government is reeling from a number of policy failures, and misjudgments over the past two years. Another is that the Chinese government plans to use the COVID-19 crisis as the basis for a renewed propaganda offensive that will debilitate America’s global power. This theory holds some water too.

A third theory has been quietly circulating. In recent days it has started to gain some momentum. It is that the Chinese government’s extensive propaganda efforts against the US are for the benefit of a domestic audience, not an international one. A sizeable chunk of Chinese citizens are troubled by the actions their government took to fight the COVID-19 outbreak. With all of the other problems on its plate, the Chinese government does not need internal discontent to rise. It makes sense to try and lay the blame on the US, conveniently providing Beijing with a scapegoat.

There are also reports that not everyone in the Chinese Communist Party is happy with President  Xi Jinping’s actions with regard to handling the coronavirus. However, it is fair to say that any discontent over Xi is probably not limited solely to his coronavirus response. The Hong Kong unrest, and slowing economy have also contributed as well. Although Xi’s hold on power may appear to be complete, it will take but the slightest misstep for him, and everything he’s built to collapse.

That could be a main reason why the Chinese government now seems so desperate to pin the blame for COVID-19 on the US.

Pandemic Politics: 12 March, 2020 Update

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Good afternoon, everyone. This is just a brief summary update of some of the day’s coronavirus related events around the world. In some nation-states the situation seems to be improving, albeit gradually. In others the opposite is true. Here in the US, there’s a growing level of concern among most citizens. Some state governors are responding well, while a handful aren’t. The governor of New York, for example, appears determined to transform the coronavirus outbreak into a political weapon of sorts. Oh well. It’s an election year, so I suppose that should not come as a surprise. 😊

 

World Markets

Most of the world’s stock markets are diving into bear market territory right now with the notable exception of China’s Shanghai Index. The growing global panic over the coronavirus is causing significant volatility in the markets and it does not appear that will change anytime soon. As of right now the Dow is approaching a 2,000 point loss, though there are still a few hours left in the trading day. President Trump’s speech last night has not soothed market jitters and the growing number of cases in Europe and the US is adding to a growing panic.

 

Germany

Angela Merkel’s dire prediction yesterday that coronavirus could infect 60-70% of the German population came as the number of cases in the Federal Republic rose considerably. As of yesterday Germany had nearly 1,300 cases and 3 deaths.

 

US Travel Restrictions

Last night President Trump announced a 30 day ban on travel between the US and Europe. The ban will take effect at midnight Friday and will affect only nations that are members of the Shengen border-free travel area. The decision has been met with anger, and confusion on the continent with many EU officials, and member-nation leaders complaining that the US did not consult with the European Union before making a decision. Many in Europe are questioning the value of European travel restrictions, pointing to the fact that the coronavirus pandemic is a global crisis, not simply a European or American matter. This argument sidesteps the fact that the United States, like every other nation on the planet, reserves the right to deal with its borders in any manner it deems necessary to protect its citizens.

 

Italy

The death toll in Italy has surpassed 1,000. Italy has been the hardest hit European country and the government has responded by initiating what essentially a national lockdown. On Wednesday night all non-essential services and stores were ordered closed including commercial and retail activities. Prime Minister Giuseppe Conte also announced that public services will remain unaffected, and industrial production is allowed to continue as long as companies take strict measures to protect their employees and prevent a spread of the contagion.

Global Markets Crater on Coronavirus Worries, and Oil Chaos

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Global markets took one on the chin today, both literally and figuratively. A combination of coronavirus panic, and the unexpected oil price deadlock between Russia and Saudi Arabia sent investors reeling, and caused European, Asian, and North American stock indexes to crater. The Dow fell 2014 points, marking its worst day since 2008 as investors fled for safe havens such as precious metals, and US treasuries. Other markets around the world fared no better. European markets tumbled an average of 7 percent, and in Asia the Nikkei dropped more than 5 percent and the Hang Seng Index lost 4.2 percent.

All things considered, some degree of volatility was expected to dominate Monday’s sessions given the coronavirus situation. However, it was the situation in the oil markets that brought on the rout. The oil production standoff between Saudi Arabia and Russia over the weekend took the world by storm and sent oil prices spiraling to some of their lowest levels since the 1991 Persian Gulf War. As it stands right now, Russia and Saudi Arabia’s actions could lead to an oil price war, something that could bring on unforeseen circumstances for oil and stock markets down the line.

The markets could’ve handled one or the other today, either the volatility brought on by coronavirus fears, or the oil collapse. Taking on both and coming out unscathed, however, was not in the cards. It remains to be seen how today’s events will affect global economies. Another day like today would put Wall Street on the verge of a bear market, and could quite possibly cause the juggernaut that is the US economy to begin to lose steam.

The next forty-eight hours will tell us a lot.

Pandemic Politics: The Schengen Dilemma

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With more European cases of COVID-19 appearing every day, the subject of potential border closures in the Schengen free travel zone is becoming more prevalent. Earlier this week the European Union stated it has no plans to suspend the Schengen Agreement or recommend border closures as a way to help stop the spread of the coronavirus. That was on Monday, and the situation has arguably worsened since then. Schengen’s rules provide EU member-states with discretion to apply border controls in response to internal security or a threat to public policy although the EU would prefer if they were never used. The last time Schengen was seriously challenged was in 2015 during the European migrant crisis. Border controls were unilaterally put back in effect by certain EU member-states to stem or block the flow of refugees streaming over their borders.

Given the rate at which the coronavirus is spreading around the continent, border restrictions might be coming back into play in the near future. To be honest, it is surprising to see that it has not happened yet. The Italian government refuses to suspend the Schengen Agreement and reimplement controls even as a COVID-19 outbreak is underway in Italy. Government officials appear to be nowhere near the point where border restrictions can be considered a justifiable preventative measure. “Closing down the borders would make no sense, as the circulation of the virus is not just limited to administrative borders,” junior transport minister Jean-Baptiste Djebbari told a French reporter.

Most other EU member-states are thinking along similar lines for the moment. If the uptick in case numbers increase, and spread into previously untouched nations in the coming days this will likely change. Policy matters, and the benefits of open borders cannot be allowed to trump public safety at a time when Europe and the rest of the world may very well stand on the brink of a major pandemic.

COVID-19 Causing Supply Chain Disruptions

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The coronavirus outbreak has cast a light on the indispensable role China plays in global supply chains. China is the manufacturing base for a large percentage of global businesses and the virus has kept many factories and plants shuttered since the end of the Lunar New Year holiday. As the virus continued to affect every facet of life in China, with large swaths of territory under quarantine restrictions, multinational companies are waking up to the realization they could be facing a potential long-term disruption in the supply chain. The electronics industry is being particularly hard hit by disruptions to its supply chain. With assembly plants that make the iPhone in China still closed Apple will likely ship 5-10% fewer iPhones this quarter according to analysts.

With the economic blowback of the coronavirus continuing to expand, many companies are coming to the realization of how vulnerable their current supply chains are to disruption. The single geography sourcing strategy is suddenly not so appealing. As a result, alternatives are being examined carefully. The race is on to design sustainable supply chains that can overcome the disruption challenges of the present-day and the future. Regional sourcing will become more prevalent, meaning an economic boost for developing regions in places like Africa, and South America. Unfortunately, their good fortune will come at China’s expense and this is something that Beijing will not take lightly to.

 

Author’s Note: Short posting today, I apologize. Chemo effects kind of knocked me out, but I’ll bounce back with more detailed posts tomorrow and this weekend.