COVID-19 will shape China’s Foreign Policy and open up new choices and constraints for its agenda of Belt & Road Initiative (BRI). Since COVID-19 emerged in China, it has led to a serious amount of backlash against China’s early handling and response to it.
The Chinese Communist Party is clearly responsible for the initial cover-up as well as underestimation of the gravity of the situation and for denying for days that human to human transmission was happening at a rapid rate.
The World Health Organisation (WHO) also has its share of the blame for letting China continue with its practice and being a bit too late perhaps in declaring COVID-19 a global pandemic.
WHO also shares blame for not verifying the data emerging for China since the global rate of spread appears much larger than what was seen in China. In fact, even as one writes this, Wuhan is nearly back on its feet after close to three months of lockdown.
Moreover, China is doing everything it can to counter the negative image created by the pandemic, not only because it creates business and markets immediately, but also because the continuation of COVID-19 hampers connectivity and globalisation on the basis of which China’s power and image are built.
All this put together has caused a lot of damage to China’s status globally and is being seen in various forms, from outright racism to ban-China messages circulating in the social media recently.
This raises serious questions about the future of China’s role in world affairs & how it would come out of this?
It would also raise questions about what happens to the Belt & Road Initiative (BRI) after COVID-19 subsides because the pandemic highlights one critical aspect that some countries have doubts with reference to the BRI and that has to do with transparency.
One must recall that the global spread of the COVID-19 did show a specific pattern. The first set of countries to have got the infection spike are the ones that have been positive to the BRI and generally have closer economic engagement with China. These include South Korea, Iran, Italy and the UK.
These are the countries that were not keen to put restrictions on or implement the monitoring of travellers coming from China. While one could exclude Iran for its general poor economic engagement with the rest of the world, the other countries do not have any excuse.
The United States which is engaged in the complex interdependence with China was the next to see the spike primarily because of the lackadaisical early response from Washington which continued to downplay the gravity of the situation, besides other structural reasons.
China’s Post-COVID-19 Strategy
It needs serious consideration as to how COVID-19 will affect BRI after the virus subsides. As of now, the projects are getting delayed as construction remains halted and supply chains disrupted due to closed factories and workers’ movement being limited due to restrictions on international travel. This happened first due to the virus spread in China and now due to the global pandemic.
Wuhan also remains central to many of the projects undertaken abroad and shutdown there was hampering work elsewhere. While many partner countries have announced or started to allow Chinese nationals back with on arrival compulsory quarantine of 14 days, they are still not opening the doors to Wuhan residents yet.
This is perhaps the reason why one of the flagship events in Wuhan recently was the resumption of the China Europe freight train on March 28, signalling resumption of normalcy.
This train carried medical equipment and masks destined for Germany and other European nations, besides having construction and telecom equipment on board. China has also sent medical teams and equipment to Italy, Iran and in Africa to Nigeria and to other countries.
In South Asia, there is a Chinese medical team in Pakistan and Bangladesh has requested for one team to help mitigate the challenges.
The slow and rather messy handling of the pandemic in Europe and the US is likely to stress the Chinese economy further as demand goes down drastically in geographies that are China’s export markets. While China has already exported medical equipment and medicine worth $3 billion, this spike will be short term and resumption of normalcy is likely to take much longer.
China is likely to compensate that by looking out to neighbours and other developing countries which will also be affected as demand in Europe and the US slows down. Whether the Trump administration becomes more inward-looking to counter coronavirus-induced slowdown is yet another question that will affect developing countries export competitiveness.
Small countries will need domestic stimulus and China is likely to step in with low-cost, long-term loans within and outside the BRI framework and as history shows it will generate a significant amount of business for Chinese firms themselves. This may look attractive where small local contractors remain cash strapped amidst the spread of the virus.
The last question that remains is whether the Trump administration will strengthen its anti-globalisation agenda after the epidemic. If that were to be the case, China would seek to promote BRI as a flagship of globalisation, which it is not. China would also be pushing the BRI more purposefully as developed economies like Japan seek to reduce their dependence on China as seen from the recently announced Japanese stimulus package.
In that situation, there will be greater opportunities for bargain available for other countries since China would need markets more desperately than the recipient countries would need the investments.
Overall, the COVID-19 will shape China’s foreign policy and open up new choices and constraints for its ambitious agenda of BRI.