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Paradigm Shift | World Economic Distancing from China

The world is hungry for the truth about COVID-19. We know it started in China, but we do not know exactly how it started. When did it begin? Where did it begin? Did the Chinese authorities kill doctors or medical students who tried to warn of the outbreak in Wuhan? When did China inform the world? Did it withhold the evidence? Now, the pressing question is how will the international community hold China legally, politically, or even economically accountable for all its dishonesty and suppression of truth?

International law will not force China to remedy the harm it has caused, since the United Nations Security Council, the executive body of international law, cannot hold China to account because China and Russia are on the Security Council, and Russia will veto any such attempt for sure.

The Corona virus staged this coup d’état. It suddenly and illegally seized power through violence to its victims. As a consequence, the world will never be the same.

Understanding the pre-existent need to revise the system and structure of the world order can explain in part the reason for the system’s failure to counter the coup. Now the media offer myriad views about the new world order after COVID-19. But for sure, the world supply chain is permanently altered. The Corona virus has even infected democracy too, turning nations into social governments. Probably this demand for governments to halt the disease and finance the recovery will lead the world towards the end of the liberal order. The world had already turned into a hell before the virus, and people became complacent in their way of life. The world embraced the democratic order of speed, pleasure, and allure that stripped humans of their ability to think and feel, so that they surrendered their humanity to a lie.

The virus is going to alter the world as we know. We wonder what will become of international organizations like the ASEAN, IMF, World Bank, EU, NATO, and the UN. What will happen to the Philippines? What will happen to countries like the U.S, China, Russia? How will the global supply chain function? What role will technology assume in our lives? We can only guess the answer to these questions.

The Coronavirus has shown us clearly that the wise leader with a vision to handle the situation will succeed in restoring a modicum of order. No longer can President Trump be blamed nor can he shake up the status quo. The virus has caused the current economic distancing and the radical deconstruction of the world. According to Bloomberg News, Japan’s government has earmarked $2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China as the Coronavirus disrupts supply chains between the major trading partners. The decision coincides with the delay in celebrating what had been an upward trajectory of friendlier relations between the two countries. Due to the virus, however, Chinese President Xi Jinping postponed his state visit to Japan scheduled for early April, the first visit of a Chinese leader to Tokyo in decades.

Japan‘s decision to help company’s source production back to Japan or to other countries is a timely and expensive move after many corporations have made China their manufacturing hub for decades. It would not be surprising if American companies follow Japan’s footsteps. China is Japan’s biggest trading partner, although imports from China slumped by almost half in February as the virus shut down the Chinese factories that manufactured necessary components for Japan. Seven of the world’s largest ports are in China. As the leading exporter of goods since 2009, China was built to export not import because China likes to manufacture. Within the existing current framework, both European and US companies will have to reevaluate the question of dependence on supply chains from China. If Japan, the USA, and the EU diversify their supply chains from China, then China will be more aggressive toward its neighbor, because China has to feed, clothe, and house 1.3 billion people. Because of the internal demand to have the world supply chain there in China, it will be bad for China, but good for the world economy.

At the moment the China-U.S. and EU relationship is frayed. Some countries blame China for a lack of transparency about Coronavirus. For national security reasons alone, many countries will engage in a lot of soul searching. Experts say that certain industries like electronics will require a long transition period before a new source can replicate the kind of ecosystem that China has. The current Coronavirus crisis shows the risk of the supply chains keeping all their eggs in one basket; consequently, geographical diversification of sourcing will soar when the global trade reopens. China’s title of the world’s largest manufacturer might have to be relinquished now in the times of social distancing. Japan and the United States are ready to have economic distancing from China. Both countries are hit worse by the Covid-19. Both countries are learning their lessons and taking steps to bring business back home with the Japanese taking lead.

When manufacturing countries close their door, it shows how vulnerable countries are if they do not manufacture. The Coronavirus was not the only cause of a new world order, but it is simply speeding up the radical change. The power shifts had already started but are rapidly accelerating, perhaps irreversibly. The veil over powerful and rich countries’ organizations has been lifted. Their weaknesses have been exposed: Solidarity within , insecurity abroad. Globally countries will minimize foreign dependency in production, like Japan is already starting to do. The role of state will be more important, and people will be expecting more of a social government type of system that supports economic and social interventions. We will see more often biological war, digital war, and bioterrorism. The Coronavirus tried to put distance between us and God, particularly in how we practice our faith. The role of faith, however, will be more important. Many religious leaders have appealed to their congregates not only to take safety precautions but also to embrace their spirituality and to reach out to the community and the needy to confront the health, social, and economic challenges ahead.

The hard-hit America should enforce some strict U.S.-content rules for sensitive defense technology. Many of the Pentagon’s military systems depend on imported components. Besides that concern on security grounds, procurement rules should be changed to require that critical components be manufactures in the US China has created a counter-narrative to position itself as a global leader in a times of crisis, pursuing a campaign of soft power by giving face masks and medical supplies to neighbor countries including the Philippines and even to some EU countries and Turkey. In spite of the cover up by the suppression of evidence and in some cases the outright deletion of critical epidemiological information, China presents itself as a humanitarian leader. Instead, international solidarity should call China to a “reckoning,” as former Secretary of State Condoleezza Rice recommends. Acknowledging their silencing of those who sounded the alarm and the subsequent cover up that cost so many lives around the world would make them admit their responsibility. Rice also calls for “an honest assessment about where this started, how it started, when it started, when the Communist Party knew, and why that didn’t get on it.” They have to acknowledge that they are a major world player whose people travel globally and thus affect the spread, and perhaps their Chinese workers were the “transmission belt” in Italy.

President Donald Trump with his “ America first“ agenda had forced companies to rethink their supply chains since he became the President of the United States. The trade war required some of the American companies to leave China. Now for sure other world leaders will want to diversify their sourcing and supply. When China shut down its borders entirely, the world had a glimpse of how miserable the global pandemic would be. But some countries will benefit from the crisis due to countries acting on their national interests, withdrawing from China, and transferring their business; for example, India can provide manpower the same as China. There is no doubt that sooner or later the virus will end, but its economic, social, and political impact will alter future generations. U.S companies are leaving China thanks to the trade war. They will leave even more thanks to the C0VID-19. In addition, the world will diversify supply chains. If the international probe finds that China was lying about the COVID-19, the international community should also seize the assets of Chinese State owned companies to compensate for the large bailouts countries like the US and Japan have had to offer. Under its Belt and Road initiative, China reportedly has loaned billions to developing countries including the Philippines, and then has cancelled these debts as compensation for Coronavirus economic losses. This should make us ask the motivation behind this sudden humanitarian impulse for the totalitarian country.

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