Developed economies bill Communist Party of China for COVID-19

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Not China. Not the Chinese. The Communist Party of China. Germany largest paper, Bild, went in hard:

The French are not far behind, via AFR:

China’s coronavirus propaganda effort in Europe has been pushed onto the defensive, as politicians, press and the public gradually turn against Beijing over its perceived culpability for the COVID-19 pandemic.

French Foreign Minister Yves Le Drian was the latest European to take a pop at Beijing, angrily rejecting China’s “calumnies” and accusing President Xi Jinping’s regime of fomenting divisions on the Continent

…Mr Le Drian was responding to a furiously worded open letter, published on the website of China’s embassy in France, which anonymously accused Western governments of removing staff from nursing homes and leaving residents to die unattended.

“I cannot accept that the staff of our nursing homes is slandered by anyone, including by the Chinese embassy,” Mr Le Drian told Le Monde newspaper in an interview published on Monday.

As we know, the US is going for the jugular as well:

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US Secretary of State Mike Pompeo on Friday called on China to grant the United States access to the Wuhan laboratory that has emerged as a flashpoint between the two nations in a clash over the origin and handling of the coronavirus.

“We are still asking the Chinese Communist Party to allow experts to get into that virology lab so that we can determine precisely where this virus began,” said Pompeo on Fox News.

Pompeo’s comment escalated conjecture surrounding the lab as US President Donald Trump amplified doubts around the extent of the Covid-19 spread in China by announcing in a Twitter post that the country “has just announced a doubling in the number of their deaths from the Invisible Enemy. It is far higher than that and far higher than the US, not even close!”

The Trump Administration is clearly playing some domestic politics, too, but perhaps that’s the point. Everybody will. Private citizens are piling in as well, at the ABC:

Thousands of Americans have reportedly signed onto a class action lawsuit in the US state of Florida which seeks compensation from the Chinese Government for COVID-19 damages, as Western politicians increasingly call for accountability.

According to a statement from the Miami-based Berman Law Group, the lawsuit “seeks billions of dollars in compensatory damages for those who have suffered personal injuries, wrongful deaths, property damage and other damages due to China’s failure to contain the COVID-19 virus, despite their ability to have stopped the spread of the virus in its early stages”.

The firm said it “looks forward to fighting for the rights of people and businesses across Florida and the rest of the country, who are now becoming sick or caring for loved ones, dealing with financial calamity, and navigating this new world of panic and social distancing and isolation”.

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The UK has been going hammer and tongs and local hero, Andrew Hastie, who is clearly shaping as the Australian Churchill, denounced CCP influence:

Prominent Liberal MP Andrew Hastie is calling for a “push back” against the activities of China in Australia as the coronavirus pandemic exposes the costs of “relying too heavily on an authoritarian regime” for our prosperity and economic security.

Mr Hastie, who is the chairman of Parliament’s intelligence and security committee, posted a petition on his website calling for people to “take action on Australian sovereignty”.

“Although few will admit it, the Chinese Communist Party seeks to reshape the global order and Australia’s position in it through foreign interference, ownership of strategic assets and influence operations,” he wrote.

“Australian institutions, universities, and assets are now contested; our sovereignty and independence will be diminished if we don’t continue to push back.”

…”To safeguard Australia’s future, it’s essential that we are united as a nation with the resolve to take action,” Mr Hastie said.

“We must ensure Australia is in a strong position to guarantee its security, prosperity and our ability to manufacture essential goods.”

Lordy, I’ve died and gone to Heaven. 

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It’s not obvious what this long-overdue pushback will achieve in each nation let alone as the sum of the parts. It may fizzle into a few stunts.

Locally, the ABC might be able to smother it with multiculturalism propaganda. The Scummo Administration may also seek desperate repair to the student and tourism trade. 

Internationally, it might splinter into random sovereign actions or coalesce into some kind of very serious, collective bill. And not necessarily just for China.

Imagine if the Trump Administration pushes this at the UN. There’s a real risk is could shatter in some way. Either the world collectively calls China to account and it walks. Or the world does China’s bidding and the US walks. No wonder Australia is pushing for a G20 investigation! Marise Payne should be highly commended for thinking that one up.

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At minimum, it will likely mean doing business with China will be very tough and lots of supply chains are going to leave. The US/China trade deal is surely toast.

The US, UK and Germany can all repatriate supply chains, profitably in risk-adjusted terms. That means less trade and we must again refer to Charles Kindelberger’s masterpiece chart of the Great Depression:

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Less trade equals less growth in the recovery and very difficult struggles over capturing aggregate demand with too much supply. Even more big power friction.

Australia is the odd one out. What do we do as our cosy little strategic hypocrisy comes to an abrupt end?

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.