The writer is author of ‘China’s Crony Capitalism: The Dynamics of Regime Decay’
Science fiction writers have fantasised about how the world’s rival powers would react if Earth was invaded by aliens. Would they unite to fight a common foe? Or carry on duelling while the alien invader destroyed humanity?
The coronavirus is not from another planet. But this crisis comes closest to the scenario imagined by sci-fi writers. Tragically, those who expect the world’s great powers to co-operate in the fight are being proved wrong. The US and China have appeared more intent on undermining each other than working together. Since the outbreak of the virus in China, they have fought a war of diplomatic tit-for-tat — notwithstanding last week’s conversation between presidents Xi Jinping and Donald Trump.
Washington has attacked China, justifiably, for covering up the severity of the initial outbreak. Beijing took umbrage at senior US officials’ talk of the “China virus”.
Relations, already on life support, have teetered on collapse. Despite Friday’s “very good” talk, as Mr Trump described it, the US president then signed a law obliging Washington to bolster global support for Taiwan — a direct rebuke to China.
Yet, at only modest cost, presidents Xi and Trump can halt the decline in ties — out of self-interest if nothing else. For Mr Xi, even a brief respite could shore up his damaged authority at home. His government handled the initial outbreak poorly. Success containing Covid-19 was then achieved at huge cost. Reviving the economy hinges on China’s main trading partners, including the US, subduing the virus.
Mr Trump needs a speedy victory in the war against coronavirus even more urgently. A prolonged crisis and severe economic downtown could imperil his re-election in November.
Besides such political exigencies, the gains from co-operation far outweigh the modest costs of the steps they could take to pause their escalating conflict.
Concretely, the easiest thing both can do is to refrain for six months from taking any diplomatic action that could be construed as unfriendly. Each side should also offer symbolic gestures of goodwill to signal a desire to de-escalate. Beijing needs to retract its decision to expel US journalists. As for the US, it would be a positive sign if all US officials, and not just Mr Trump as he has recently done, stopped referring to the “Chinese virus”.
A more practical step is co-operation in fighting Covid-19. With its capacity to scale up the production of critical medical supplies, China can ramp up output quickly. As a goodwill gesture, Mr Xi should personally offer Mr Trump donations of millions of masks, test kits and protective gowns. In addition, China should share with the US, and all other countries, the lessons and data it has gained in containing the virus and treating its victims. That would help win the war against coronavirus quickly and more efficiently, globally. Washington and Beijing should also pool their resources and scientific talent in a joint programme to find a vaccine and make it freely available to the world.
On the economic front, self-interested collaboration will help calm markets and limit damage. For example, a joint agreement to suspend for six months all the tariffs levied during the trade war would boost investor confidence. More crucially, a six-month foreign exchange swap agreement between the US Federal Reserve and the People’s Bank of China could reduce the risks of a nightmare scenario. To meet rising demand for dollars to meet the dollar-denominated obligations of its banks, Beijing may have to sell a large chunk of its US Treasuries holdings. That action would roil financial markets even more.
These modest steps are unlikely to change the course of their geopolitical rivalry. But they would follow through on the potential thaw signalled last week. By co-operating to fight a common enemy, they can both help themselves and reassure the world that the feud can be waged rationally, without endangering all humanity.
Source: Economy - ft.com
