Prof Zhang Jun

Opinion | Why the coronavirus crisis won’t weaken China’s position in the global supply chain

China’s role is changing, without a doubt, as the economy shifts gear into developing its hi-tech and services sectors

Its innovation, and still considerable manufacturing heft, will ensure it has a place in the global value chain while its huge domestic market will continue to draw businesses from around the world

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A railway worker holds a sign reading “Hankou Station welcomes you!” as passengers board the first high-speed train to leave after the resumption of services in Wuhan, Hubei, on April 8, after 11 weeks of lockdown. Photo: AP

Prof Zhang Jun

Published: 3:00am, 9 Apr 2020Updated: 5:06am, 9 Apr 2020

The global recession brought on by the Covid-19 pandemic is almost certain to be far deeper and more protracted than the one that followed the 2008 global financial crisis.

While many governments have pledged to bolster their economies with unprecedented monetary and fiscal stimulus – despite holding already-massive public debt – the best they can probably hope for is to stave off economic collapse. If they insist on turning inward – pointing fingers and erecting barriers, instead of upholding international cooperation and economic engagement – even that may become impossible.

Engagement by the United States and China is especially important. In the wake of the 2008 crisis, the global economic recovery got a major boost from Sino-American cooperation, which supported individual stimulus measures (quantitative easing in the US and large-scale fiscal stimulus in China).

But the Covid-19 crisis has erupted at a moment when bilateral relations – as well as international cooperation more broadly – are at their lowest point in decades, and the US has shown no inclination to improve the situation.

On the contrary, some US politicians immediately latched onto the Covid-19 crisis to argue that no country – especially China – should have such a central position in global supply chains.