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Written by Dan Steinbock
In the West, international media have portrayed Omicron infections in China as a harbinger of a mass outflow of foreign multinationals from the country. Yet the investment data reflect the opposite.
Since early March, the Omicron outbreaks have spread from Shanghai to other parts of China, including Beijing, and Guangdong and Hunan provinces.
But how do China’s outbreaks compare with those elsewhere?
Pandemic devastation: Coverage versus realities
When China largely contained the COVID-19 outbreak in early 2020, the number of confirmed cases was about 3 million worldwide. After two years of the pandemic, the global figure is 516 million.
In the United States alone, the confirmed cases exceed 83 million, although the real figure could be much higher. According to the Centers for Disease Control and Prevention, some 60 percent of Americans have been infected by the virus.
The failure of the United States and European countries to contain the pandemic, coupled with inadequate international cooperation and rich countries’ vaccine hoarding, have given rise to waves of new variants. The common denominator of the recent crises is the end of the lockdowns, opening up of the economies and increasing international travel. China is no exception, but it also has a track record of fast response and fast economic rebound.
In view of the total number of cases, adjusted to the size of population, the list is currently topped by small and open trading economies, such as Denmark (fifth) and the Netherlands (ninth), and major economies, including France (14th), the United Kingdom (38th) and the US (56th). While the numbers are lower for Japan (128th) and developing countries such as India (150th), China (223rd) is at the far end of the list. It has 151 cases per 1 million people, significantly lower than 248,000 cases per 1 million in the US.
In light of these cold realities, the argument that the magnitude of the Omicron outbreaks in China somehow exceed the pandemic devastation in the West is thoroughly flawed. Indeed, it is hard to avoid the impression that double standard is now a norm in news coverage in the West.
Figure 1 Cumulative confirmed COVID-19 cases per million people
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Source: Johns Hopkins University CSSE COVID-19 Data
Rising pressures in China, devastating headwinds in the West
The counter-argument might be that China occupies such a vital position in international value networks that severe disruptions in Shanghai, Beijing and Guangdong will have global repercussions. That is, of course, true, but it is also true about foreign multinationals headquartered in the US, European countries and Japan.
The pressure on global supply chains remains high relative to historical levels. Obviously, rolling lockdowns in China’s economic hubs pose new challenges, including delayed recovery in the auto sector and increasing headwinds in the electronics sector. The slowdown is already discernible in the sharp fall in the purchasing managers’ index for March, coupled with weak import growth.
In China, the impact of global supply chain pressures is high, due to the country’s key role in global supply and distribution. But other economies are likely to encounter stronger headwinds over time.
The US Federal Reserve recently increased the interest rate by 0.50 percent; the biggest hike in 22 years. Since the Bank of England is likely to follow in the Fed’s footprints, pressure will increase on the European Central Bank to launch its rate plan.
What will make the situation even more challenging are the looming energy and agricultural crises, compounded by the Russia-Ukraine conflict, the misguided use of Western sanctions against Russia, and massive arms supply to Ukraine by the US and its NATO allies, which could prolong, even widen the conflict.
In the developed West, new headwinds will result in downgrades across most major economies. In the US, the Biden administration, whose approval ratings have plunged from 53 to 38 percent, is struggling with highest inflation in 40 years, record trade deficit, depressed growth, and 1st quarter contraction. In the EU, the recession risks loom even higher, and in Japan growth forecasts have been sharply cut.
Inflation and rate hikes are penalizing growth in the US and Europe. China must tackle the new headwinds, but its starting point – higher growth, lower inflation – is more favorable (Figure 2).
Figure 2 GDP Growth and Inflation: US, Euro Area and China
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Source: Tradingeconomics, Difference Group Ltd
Record foreign investment in China
In contrast to most developed economies, China seeks to alleviate sharp slowdown via moderate easing. Recently, the People’s Bank of China, the country’s central bank, cut the required reserve ratio (RRR) by 25 basis points, less than the markets expected. However, the POBC is likely to engage in further quantitative easing, including more RRR cuts.
Will the pressures on China cause the proposed outflow of foreign multinationals, as some have suggested? The simple answer is no. In 2021, China’s actual use of foreign direct investment exceeded $173 billion, up 20.2 percent year-on-year in dollar terms.
The trend is likely to continue this year. In fact, in the first two months of this year, China’s FDI inflow soared to $37.9 billion in dollar terms, an increase of 45.2 percent year-on-year.
In part, the performance reflects impressive investment growth from countries involved in the Belt and Road Initiative and ASEAN member states (27.8 and 25.5 percent respectively). China remains a top investment destination for many foreign companies, with more than 70 percent of German companies planning further investment on the Chinese mainland, according to the German Chamber of Commerce in China. And China’s institutional reforms are likely to boost investment in the services sector.
In other words, short-term pressures will not undermine foreign multinational companies’ long-term strategies.
Global headwinds have only begun
Since March, the global economy has moved into a new, more perilous status quo with rapidly rising adverse economic repercussions. As a result, global growth is projected to plunge to 3.3 percent over the medium term, according to the International Monetary Fund. And that’s the benign scenario.
The coming shocks will be compounded by the protracted Ukraine crisis, ill-advised economic sanctions, rearmament drives, lack of proactive diplomacy, new virus variants, corrosive stagflation, and the aggressive rate hikes by the Fed and central banks of other rich economies.
In this dire landscape, the Chinese economy and its quest for peace and development, despite the varied challenges, remains a point of promise.
Dr. Dan Steinbock is an internationally recognized strategist of the multipolar world and the founder of Difference Group. He has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see https://www.differencegroup.net
Omicron outbrakes ??? ahahahahahahahahahahahahahahahahahahahahah CHINA sell the WORLD TO THE PARAZITES !!!!!! LOOKDOWN THE CHINEZE ELITE PARAZITES !!!! OMI CRONAS NAZIS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
It seems they’ve done their homework since those countries hit hardest are millions of psionist puppet Mo Fos
First learn to spell, then try to write.
CHINA IS NAZI like the UKRO NAZIS !!!! stop suking the psicopath parzites elites of slaves and f OFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFf
China….China….China …..suck the anus of Big Parazites and then kill is one people with stupid Nazis loockdowns !!!!
It seemes You are locked down Yourself. As nazi one???💋
Oh yeah SF, if this is allowed and not blocked. The writer has found the coronavirus by accident and does not know its a psyop?
Its Allowed PARAZITE so go to your World where the PARAZITES dont allow you !! So F OFF !!!
Much as You are a psyop or a blind cyclope. It has been devastating so many mainly older ones has died 10 or 20 yers before time. After a very bad start we have reduced it to a very low level.
Nominal GDP is fake religion. The connection between GDP growth and higher standard of living is now much weaker as it was 60 years.
Thats the best we got. It has been adjusted several times. In advanced compared there often are added why and who not.
If You have something better or GDP should be replaced with nothing write it.
I see no fake. For some countries its quite inaccurate.
I believe PPP is a better metric than GDP.
what is PPP?
Statistics and conclusions are very difficult to make.
For Denmark we registrate much better then many. People dead ALSO had covid. But threy died for other reasons even it was found in them.
Its also correct right here, that people actually are hit all are vaccinated and by are not hit hard as well as we has improved a lot in treatment.
Registrated here is not the dsame as dead. In other countries it is.
“Lies, damned lied, and statistics.” — Mark Twain
Mark Twain said a lot of things. Its not related to my writing.
As we see here the purpose for staistics are evil bluting the rest of the world well as well as statistics often has different origiens.
By that statistics becomes lies or in its best very imcomplete.
We also has no stagflation at all. prices all over has gone up. We need to imprt people to take Our many vacant jobs are a kind of happy for the many incomming(women), which soon can take over some of them.
By that we by the state and the parlament compensate the lower incomes very much. So far its only for electricity and heating(sooling). We also has raised the level for suntraction in pendling a lot. Many has their jobs many km away.
It is told by the SF front. We have problems but many of them are compensated well. We dot think we have stagflation. Many things has raised to a higher level(maybee 10%), but thats it.
So its a jump iwth sober adjesutments here.
People try to use less and fx buy cheelper meat. More make their own bread instaead of buy. Thats almost a good thing.
selling trilions of milions of PCRS from rostchiken rostchild to have a fake plandemic by the rockefeller faggots !!! and making films of chinese falling its a WAR so F OFF !!!!!!!
OmIcRoN iS cOmInG!1!!! ThE eNd Is NiGh. Ugh, idiots.
The trolls here are completely histerically, so they are a useful thermometer for the matter. Thanks, shlomos.
I saw RT TV in many examples this evening. We in this was some kind of Ataltis as a farce.
India (150th)LOL. Since Jun2020, India’s official serology survey found 30% of its city population had COVID antibody. By Feb2021, it was 80%.
By Apr2021 after Modi reckless election, India broke down in country wide outbreak spreading deadly Indian Virus Delta. Millions of infected Indians flee in whatever transports including chartered flights to West and Singapore, spreading Indian Virus globally killing millions.
All India hospitals were overcrowded with many lying on walking paths, carparks full of infected patients died while waiting. Oxygen run out critically. Followed by multi color fungus outbreak and new mutation of Delta Plus aka Delmicron.
Numerous COVID deaths with unaccountable corpse were burning in every cities open area like hell. All cemeteries were full. Overwhelmed crematoriums broke down. Numerous corpse were dumped into rivers. Whole India was like burning hell. Watch numerous youtude videos uploaded by Indians.
Yet India BJP gov reported they have the world’s lowest per capita infections and deaths. All WHO experts unanimously agreed India has under reported at least 5~10x, while India independent journalists reported at least 20x.