The COVID-19 pandemic has greatly exacerbated the trend of US-China decoupling. For more than a decade, these two countries relied on each other for mutual economic growth and prosperity.
Historian Niall Ferguson refers to this symbiotic connectivity as “Chimerica,” in which both nations worked closely to deal with the aftermath of the 2008 global financial crisis, championing state-controlled capitalism through massive economic rescue packages.
However, the “Chimerica” nexus seems to have come to an end. As bilateral ties have worsened amid trade and media disputes, the entangled US-China relationship further complicates the development of geopolitics and the global economy.
In recent years, Beijing has utilised its ambitious Belt & Road Initiative to expand its international outreach, offering sizeable aid and settling transactions across the developing world.
This has strengthened the yuan as a key regional currency against the US dollar. As more economies in the global South are becoming oriented toward China, this has laid the foundations for a Sino-centric economic union.
Politically, the Chinese path to development has emerged as an irresistible attraction for Africa and Asia. While the West encourages free-market privatisation over government interference in the economy, China’s development is primarily driven by the strategic use of government resources to promote research in highly competitive fields, and the creation of special economic zones to attract outside capital and technology.
This has enabled China to secure remarkable growth and win support from its neighbours. At least in material terms, the country has fulfilled chairman Mao Zedong’s proclamation that “the Chinese people have stood up.”
In his 2008 book What Does China Think? Mark Leonard writes: “China’s emancipation from the West has created an alternative, non-Western path for the rest of the world to follow.
The ideal of a ‘Walled World,’ where nation states can trade with each other on global markets, but maintain their control over their economic future, their political system and their foreign policy is emerging as an ideological challenge both to the US philosophy of a ‘flat world’ and the European preference for liberal multilateralism.”
Like it or not, the Chinese model is built on a premise that national sovereignty is a prerequisite for economic development. It is widely thought to be the rightful duty of the authoritarian state to safeguard sovereignty and pursue autonomy from the West.
Reaping the benefits of the influx of global capital and knowledge for its modernisation programs, China has felt confident enough to reject publicly the Euro-American discourse of a neoliberal economy.
Against this geopolitical backdrop, the coronavirus outbreak is a watershed moment like the Black Death in medieval Europe or the Spanish flu of 1918.
Having suffered the negative consequences of over reliance on a single market, many business executives are rethinking the supply and production chains for the longer term, and planning to move some of their operations out of China.
The healthcare crisis has advanced the doctrine of social distancing, and accelerated the trend toward more Internet-centric activities. In China and in the West, more institutions and service providers are embracing online platforms to conduct their daily business.
When the pandemic subsides, e-learning, e-commerce, e-health and e-government are bound to become more common. Thus, countries and communities with better Internet infrastructure and access have a stronger chance of weathering this storm, maintaining steady productivity and continuing usual business operations.
Despite its relatively small size and population, Taiwan has effectively positioned itself as a remarkable powerhouse of high-tech innovation and service amid the pandemic.
Because Taiwanese re-elected President Tsai Ing-wen in January’s election, most mainland academics remain reluctant to praise Taiwan’s solid technological foundation, which benefits from a proper legal system of patent protection, widespread public access to the free flow of information, and a mature venture capital industry supportive of innovations in research and development.
Many enlightened Chinese Communist Party officials, business executives and lawyers have long recognised these institutional components as essential for the expansion and protection of China’s Internet economy, but the pursuit of personal enrichment through innovative efforts, freedom of speech and information through the power of the Internet, and political representation through online activism only incur state distrust rather than sympathy.
The growing hostility toward openness under Chinese President Xi Jinping’s rule has cocooned the governing elites and suffocated the genuine desire for sensible reform in politics.
This structural barrier will always make China lag behind Taiwan in further liberalising its economic system, obstructing its smooth transition into one of the global high-tech superpowers of the new century.