By Franz Walker
The tensions that have mounted since the start of the global coronavirus pandemic have slowly pushed the U.S. and China closer to a new cold war. The political pressures stemming from the pandemic have strengthened hard-liners while making it harder for leaders to back away from escalation.
As the virus has killed thousands and savaged economies around the world, officials in Washington and Beijing have continued to heap blame on each other for the virus. Early on, President Donald Trump often referred to the coronavirus as the “Chinese virus.”
Meanwhile, Chinese state-owned media and political operatives have slammed the statements of America’s political elites as being “racist and xenophobic.” Beijing has even gone as far as to spin allegations that the epidemic was started by the U.S. military.
The outbreak is stirring anger in both countries
Officials in Washington have quietly pressed for international censure of China’s culpability in the ongoing pandemic. At the same time, they’ve seized upon the crisis to attack the manufacturing and other economic ties that have been built between the countries over the past 40 years.
As the outbreak shut down imports from China, many companies found themselves unable to procure the goods they needed to sell to make money. As a result, many U.S. companies started to rethink their supply chains and make plans to move their manufacturing outside of China before the economy ground to a halt.
All the while, the tariffs that President Trump imposed on billions of dollars worth of goods from China — and corresponding counter-tariffs from Beijing — remain in place. This has added to the cost of trade while many businesses struggle to stay afloat.
The economic toll seems to have pushed bipartisan support for President Trump’s anti-China message in both Congress and in corporate America. Many in the latter have long been disillusioned with the relationship, especially as Beijing continues to refuse to prevent its companies from appropriating the intellectual property and know-how of American firms.
Another factor contributing to the growing disenfranchisement with China has been Beijing’s continued crackdowns on dissent and human rights, as well as its aggressive military moves in the South China Sea.
In China, on the other hand, U.S. criticism of the country, as well as the economic toll inflicted by the tariffs, has also stirred waves of nationalistic resentment toward the latter.
This anger, combined with the Communist Party of China’s (CPC) massive response to fight the epidemic, seems to have strengthened President Xi Jinping’s hold on power, making it easier for him to pursue further crackdowns on dissent.
People in China also chafe at President Trump’s effort to blame the pandemic on the nation, seeing it as both unfair and factually wrong. To them, the CPC’s draconian isolation of Hubei province and other hot spots is a model for how to contain and conquer the disease. They also see China as having reached out to other countries to help them as its own crisis has seemingly abated. (Related: “Recovered” coronavirus patients in China are testing positive a second time.)
According to David Bachman, a China specialist at the University of Washington in Seattle, the widely accepted narrative within China is that the country is “if not the savior of the world — at least sort of doing more than its fair share to help the rest of the world.”
On both sides, public resentment is likely to be intensified by the rising economic cost of the pandemic.
Economic pain could make compromise more difficult
The economies of both nations are expected to see their sharpest drops in decades, as businesses get crippled, and millions of people lose their jobs. Political leaders face an unprecedented crisis in which conventional stimulus packages and other time-honored economic policies look to be ineffective.
According to analysts, the economic pain will likely make it difficult for both sides to make any compromise, even if a de-escalation could benefit both of them.
“I don’t think there’s any way in hell things get better from here,” said Jude Blanchette, the Freeman Chair in China Studies at the Center for Strategic and International Studies. “An increasingly authoritarian China, mixed with a global growth downturn, mixed with a domestic recession, mixed with a populist president, mixed with an election year, equals an increasingly factious discourse on China.”
China’s economy is expected to suffer its slowest growth in more than 40 years. This could threaten the country’s political stability if the CPC fails to make good on its compact with the masses to continue to improve their economic well-being in exchange for their compliance with an often oppressive authoritarian system.
However, there are signs that China’s economy could fare better than experts in the West are projecting. According to Nicolas Lardy, a China economy expert at the Petersen Institute for International Economics, Chinese factories have resumed their operations, and power usage has returned to 95 percent of what it was this time last year.
In addition to this, Beijing hasn’t felt the need to spur economic growth with massive credit, nor has it provided anything close to the $2 trillion relief package that Washington passed. Had Beijing thought they were headed to a major economic downturn, Lardy explained, they would have injected a lot more stimulus than it already has.
Coronavirus killed the trade deal that could have eased tensions
Back in January, there was some hope that tensions would be eased thanks to a large trade deal struck by the two sides. As part of the deal, the Chinese promised to buy millions of dollars more in American farm products and other goods.
Thanks to the pandemic, however, that trade deal “is already dead in the water,” states Backman. “There’s no possible way that the targets now are going to be met. And so that’s going to be a source of dissatisfaction on the U.S. side.”
The global pandemic “has demonstrated the impossibility of the U.S. and China being coupled closely together,” explained Clyde Prestowitz, former counselor to the Secretary of Commerce during the Reagan administration. “The notion that free trade and globalization are going to tame China and make it more democratic, etcetera, I think this has shown that’s bull.”