The COVID-19 recession: Make or break for China?

by Aanya Dandass

China covid aid
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Thousands of aid packages donated by the People's Republic of China are unloaded at the Villamor Air Base in Pasay City, Philippines. Prachatai via Flickr

The COVID-19 pandemic has wreaked havoc across the globe: testing the limits of healthcare, pushing economies to their breaking point and further destabilising an already volatile international power dynamic. It has taken a significant toll on several countries, including the seemingly almighty China. Over the past two decades, the world has been witness to China working determinedly and aggressively to reach the position of immense global power it holds today – politically, economically and militarily. Lowell Ditmer, in his book China’s Asia: Triangular Dynamics Since the Cold War, identifies China’s thirst for power in the twenty-first century as the pursuit of the old Chinese dream of reconstructing the ‘central kingdom’ or Tianxia, which translates as ‘all under heaven’ and refers to the expansion of Chinese glory – politically and economically – in the international realm. The pandemic has thrown several hurdles in the path of China’s pursuit of its goal, breaking the strong momentum it had gained. It is interesting to examine Beijing’s response to these challenges as they are critical in determining whether China will be able to continue its upward trajectory of growth and international dominance or finally have its power checked.

With the COVID-19 crisis, China was the first country to face the devastation of the pandemic that is now plaguing the world. Being the epicentre of the virus outbreak has had adverse effects on its image as a member of the international community and as an economic partner. A severe economic slump began in China, causing alarm among several companies and nations with investments in the country over how heavily economically dependent they are on the Chinese. As a result, several of these nationals began re-evaluating their relations with Beijing to restore balance. Furthermore, COVID-19 has served as a bitter reminder of the devastation caused by the 2003 SARS virus, which also originated from Chinese cultural practices. The response of the Communist Party of China (CCP) to COVID-19 was secretive and irresponsible, aimed at protecting China rather than the global community, as showcased by the lack of transparency and proactiveness to alert the world to the impending danger. This has resulted in China being viewed negatively by several countries, magnifying distrust.

However, having been the first to face the brunt of the COVID-19 outbreak has also had its advantages. It has given China an edge. Despite a GDP contraction of 6.8% in the first quarter of 2020 and imports falling by 14.2% in April, the Chinese recovery was quick, with exports increasing by 3.5% for the year, primarily due to the export of medical products. China has made export deals with 30 countries and two international organisations. Moreover, the success of containing the virus domestically has allowed it to re-open its economy and boost it by providing a stimulus package to support domestic growth and investments, while the rest of the world is fighting an uphill battle against the virus.

Being the first to face the brunt of the COVID-19 outbreak has given China an edge.

In contrast to the situation in China, the recession facing the global community is proving to be disastrous. Experts have argued that international cooperation is key to beating the virus; they place great emphasis on the role that the United States should be playing, having been the hegemon for many years. Unfortunately, the USA’s struggling economy, coupled with President Trump’s pursuit of his populist agenda, narrowing in on national welfare at the cost of support to the international community, as demonstrated by the withdrawal of funding and support for the World Health Organization (WHO), has weakened US presence in the fight against COVID. The USA’s rejection of WHO for being ‘China-centric’ has also widened the US-China rift, resulting in a further fracturing of the international community. This has provided an ideal opening for the CCP, which is nothing if not opportunistic, to actively project itself as the strongest, most benevolent, global power and attempt to claw its way to becoming the new hegemon.

The CCP’s instrument of choice to combat the global backlash it has faced with the outbreak of the pandemic has been its soft power. The term ‘soft power’ encompasses a large category of instruments, both economic and cultural, that are used to concretise dominance and influence. China’s use of soft power has been primarily via economic means but also through its participation in several multilateral institutions. In the current COVID-stricken world, rife with uncertainty, Beijing has resorted to the widespread use of the Chinese modus operandi – economic assistance with several political strings attached that manifest in the long term. The international reception of China’s pandemic response will determine whether or not the scale will tip in its favour.

The pandemic has opened a whole new realm of opportunities at the humanitarian end of the soft-power spectrum, allowing China to portray itself as a responsible global leader eager to aid those in need. The Chinese government describes its response to the crisis as ‘the most intensive and wide-ranging emergency humanitarian operation since the founding of the People’s Republic of China in 1949’. It began its venture by providing medical agents, PPE, ventilators and financial aid to COVID-19 stricken countries with whom it has frequently engaged in the past and which are part of its Belt and Road Initiative BRI – primarily in the underdeveloped regions of Africa, Latin America, the Pacific Islands, Southeast Asia and a few European nations such as Poland and Italy. Within the Asian subcontinent, the government has supplied medical teams to 50 countries. The CCP government has also shared medical expertise on the virus by hosting video conferences with nations to discuss control measures, treatments, testing and contact tracing.

Several states in dire need of assistance will be unable to refuse any aid, forcing them to accept all of China’s terms and conditions.

Most recently at a WHO assembly, China announced a USD 2 billion package to assist the global fight against coronavirus. However, there remains ambiguity about how and to whom the CCP will distribute the aid and what implications the fine print of this deal will contain. Based on evidence from past deals made by the CCP (especially through the BRI), it is fair to argue that it is likely to push its 5G technology and surveillance equipment as part of the deal, exploiting the vulnerability of other nations. The positive results displayed by the CCP’s use of Big Data, drones and facial recognition technology in its domestic battle against coronavirus is going to make promoting its technology much easier. The superiority of Chinese technology is another tool often used under the guise of aiding development in weaker nations to strengthen Chinese influence overseas.

Beijing's existing pattern of loan policies is also likely to benefit from the situation at hand. With China already the biggest creditor to African countries, the COVID-19 recession is likely to force other, previously mid-ranked economies to turn to it for financial assistance, elevating Beijing towards the position of a global hegemon. The desperation and struggle for survival of nations as the pandemic ravages the globe are likely to make the prospect of any financial relief so welcome that China will easily be able to reel them into their infamous ‘debt traps’ – another diplomacy tactic associated with the CCP’s foreign policy. With time, due to the projected state of the global economy and escalating battle against the pandemic, several states in dire need of assistance will be unable to refuse any aid, forcing them to accept all of China’s terms and conditions.

While it is too soon to decisively declare what China’s global standing will be in a post-COVID world, a preliminary examination shows that being the epicentre of the virus did put dents in Beijing's economy and political standing but also that it has not accepted defeat. With the US withdrawing from its role as global hegemon and several nations crumbling under the progressively increasing economic toll of the global recession, China is stepping up to the plate and providing them with much needed economic and material assistance – the political cost of which will only be determined in the long run. Recent events such as China’s border skirmish with India and the new National Security Law in Hong Kong are two examples where China has actively used force and violated international norms highlighting its growing boldness. These events are a clear indication of Beijing's confidence in its position of power over the international community.

This is not to say that there have not been problems with Chinese aid or that there has been complete acceptance of China’s assistance and actions. However, with no end to the challenges of the pandemic visible in the near future, economic conditions across the world continue to worsen. These adverse conditions are likely to make relief from any source welcome, thereby allowing China to capitalise on this desperation and aggressively pursue its agenda of world dominance. It is a strong possibility that China will not allow the pandemic to be anything more than a minor setback in its path towards becoming a global hegemon and that it will emerge stronger than ever from this crisis.

About the author

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Aanya Dandass graduated in Political Science and International Relations from Ashoka University, India. Her interests include human rights, security studies and geopolitics.

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