Tuesday, May 26, 2020

The Opportunity in Crisis

This is an interesting discussion of post-Xi Jinping Flu U.S.-China relations. This in particular leapt out:

The major U.S. weapon against China is economic. Here the virus opens opportunities. The U.S. is dependent on China for vast amounts of products, a supply chain that gave the U.S. the benefit of low-cost manufacturing, and the Chinese an industrial base. The Chinese move is to expel and block the U.S. supply chain, but Beijing can’t do it while also maintaining social stability. And the U.S. has options to replace the Chinese supply chain.

I noted this Chinese export reliance problem:

China has made threats based on their control of key components and ingredients needed to battle the Wuhan Flu. It may be an empty threat that if carried out will only accelerate a decoupling of China's economy from the world in a dangerous--dare I say interesting--time. ...

I suspect China can only slow the decoupling and not stop it. The CCP may not have any choice but to export what we'll take to slow decoupling and hope for the best.

Interesting times, indeed.