Coronavirus backlash adds to trade war and decoupling pressure to fray China’s ties to global system

Name: Coronavirus backlash further fraying China’s ties to global economy
Uploaded: 2020-05-23T11:00:10.000Z
Duration: 5 min 2 s
Description: Coronavirus backlash further fraying China’s ties to global economy

US-China trade war, coronavirus pandemic, decoupling and deglobalisation have soured the mood in Beijing towards the global economic system

Ahead of National People’s Congress, debate over China’s belligerent response to coronavirus pandemic was already under way in the capital

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China is arguably becoming increasingly untethered from the global economic system, sparking fears that China could deploy even more aggressive trade actions as a matter of course. Illustration: Kuen Lau

Finbarr Bermingham

Published: 7:00pm, 23 May 2020Updated: 12:43pm, 25 May 2020

This is the seventh in a nine-part series examining the issues Chinese leaders face as they gather for their annual “two sessions” of the National People’s Congress and Chinese People’s Political Consultative Conference this week. This story will examine China’s changing role in the global economy.

Up until last week, almost all the Angus beef raised on Robert Mackenzie’s 15,000 acre family farm in Newcastle, New South Wales, was bound for China.

But a trade spat which has seen meat from four Australian abattoirs banned from China’s massive consumer market over customs documentation mislabelling has caused “great worry” for the founder of premium beef exporter, Macka’s.

“After a month it will really start to hurt me. When there’s a suspension it hurts the farmer, the producer, the family, and the consumer. This time we’ve felt the brunt,” said Mackenzie, who uses one of the affected plants to process the meat from his farm.

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Coronavirus backlash further fraying China’s ties to global economy

While the trade actions have legitimate regulatory grounds, many have linked the ban to Canberra’s calling for an independent investigation into the origins of the coronavirus pandemic, mirroring a form of economic coercion China has used previously to settle political scores.

Australian beef ranchers like Mackenzie, along with the barley exporters now facing an 80 per cent tariff to ship to China, can be added to South Korean retailers, banana farmers in the Philippines, Canadian canola growers, Norwegian salmon fishers, as unknowing business groups caught in the political crossfire with China over the years.

But the latest fracas comes as China is arguably becoming increasingly untethered from the global economic system, sparking fears that China could deploy even more aggressive trade actions as a matter of course.

Trade wars, geopolitical rivalries, the coronavirus blame game, along with calls for deglobalisation, sanctioning and decoupling have left many in Beijing convinced that the world will become an increasingly hostile place for China over the coming years.

“It seems the central government will now put politics ahead of trade,” said Zhaokang Jiang, managing director of trade consultancy GSC Potomac and a former director in China’s customs authority. “China loves the multilateral system, but if it is not going to be acceptable to China, it will probably change direction.”

SCMP Series

China at a crossroads

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