4 Ways China Gains from the Coronavirus Pandemic

BEIJING, CHINA - APRIL 26: Chinese President Xi Jinping proposes a toast during the welcome banquet for leaders attending the Belt and Road Forum at the Great Hall of the People on April 26, 2019 in Beijing, China. (Photo by Nicolas Asfouri - Pool/Getty Images)
Nicolas Asfouri - Pool/Getty Images

Despite outrage over Beijing’s initial coverup of the Chinese coronavirus outbreak, the country is already attempting to leverage the global pandemic at a time the U.S. finds itself struggling to contain the disease.

Below, in no particular order, are four major ways China is gaining ground from the coronavirus crisis.

1 – China is using the pandemic to position itself as a global response leader while the U.S. shifts to survival mode.

China greatly suffered at the start of the pandemic, including during the period it was actively engaged in a coverup of the virus. Now that the crisis seems to have somewhat stabilized in China, the country is positioning itself as the global leader in helping other nations respond to the Chinese coronavirus outbreak.

And that response offers China a unique opportunity to extend its tentacles by massively expanding its international influence and playing the role of superpower precisely at a time the U.S. has been struggling to contain the virus. In just one example, China has been supplying large quantities of masks to hard-hit countries while the U.S. is fast at work trying to produce enough masks for its own domestic requirements.

“This could be the first major global crisis in decades without meaningful U.S. leadership and with significant Chinese leadership,” noted Rush Doshi, director of the China Strategy Initiative at the Brookings Institution in Washington.

Axios reported that Chinese think tanks are floating the idea of a “Beijing-led global health organization that would rival the [World Health Organization].”

“The Chinese government has been trying to project Chinese state power beyond its borders and establish China as a global leader, not dissimilar to what the U.S. government has been doing for the better part of a century, and the distribution of medical aid is part of this mission,” argued Dr. Yangyang Cheng, a postdoctoral research associate at Cornell University and columnist for SupChina.

Indeed, China has pledged or provided aid far and wide, from Greece to Italy, Japan, Iraq, Serbia, Spain and even Peru, in an attempt, as the New York Times characterized it, “to reposition itself not as the authoritarian incubator of a pandemic but as a responsible global leader at a moment of worldwide crisis.”

“The coronavirus pandemic has become a battleground,” said Bruno Maçães, a former secretary of state for European Affairs in Portugal. “I see China focused on using the crisis as an opportunity to play up the superiority of its model.”

“I think this also shows what climate change could look like in the future,” Maçães added, “less an opportunity for global cooperation and more the background for geopolitical competition, with every major actor trying to do better than its rivals.”

Peter Rough, former research director for President George W. Bush and a fellow at the Hudson Institute, questioned China’s motives in selectively providing aid to certain countries.

Rough wrote at Foreign Policy magazine:

Take, for example, the decision by Chinese telecommunications giant Huawei to donate 800,000 masks to the Netherlands. Why would the conglomerate, known for its closeness to the Chinese government, display such benevolence toward a country which, at the time, had hardly any coronavirus cases? Surely it could not be because the Netherlands’ auction of fifth-generation (5G) mobile licenses is slated for June, and because the Dutch still have to decide whether to exclude Huawei from its 5G networks over espionage concerns.

Or consider Italy, where China has sent doctors and donated ventilators that have been in short supply. Does China’s newfound interest in Italy’s well-being stem from genuine concern, or from that of Rome’s status as one of Europe’s biggest supporters of the Belt and Road Initiative?

Perhaps, then, China’s donation of 500,000 masks to Greece is an uncharacteristically generous gift. Or is it nothing but a gift horse, part of much longer campaign that has showered Greece with trade and investment? Already, Greece has been a reliable supporter of China in Brussels, which Beijing increasingly counts on to veto any measures China considers to be against its interests—on trade, security, or human rights, for example.

China may also be seeking to drive a wedge in Europe where it has focused some of its strategically offered aid on non-EU countries at a time when EU members are closing their borders.

In one of many examples, Serbian President Aleksandar Vucic told reporters that he penned a letter to his “brother and friend” Xi Jinping, the Chinese president, asking for medical aid, writing that “the only country that can help us is China.”

“European solidarity does not exist,” Vucic complained. “That was a fairy tale on paper. I believe in my brother and friend Xi Jinping, and I believe in Chinese help.”

2 – America and the rest of the world rely on China for pharmaceuticals, a phenomenon Beijing is already starting to leverage.  

Like the rest of the world, the U.S. is perilously dependent on China for the ingredients in critical drugs since those products are cheaper there and China is subject to fewer regulations. This puts the Chinese Communist Party in a pivotal role in controlling the supply chain of the world’s pharmaceuticals.

About 80 percent of the active ingredients used in U.S. drugs are believed to come from China and India. Perhaps most dangerously, China is the only manufacturer of some generic antibiotics.

Even India, which is responsible for about one-fifth of the world’s generic drug exports, receives most of its raw material imports from China. Due to Chinese supply chain disruptions under the coronavirus pandemic, India recently announced it will need to temporarily suspend exports of 26 essential drugs and drug ingredients, including some antibiotics.

If China turned off its international pharmaceutical supply chain then “military hospitals and clinics would cease to function within months, if not days,” warned Rosemary Gibson, author of “China Rx: Exposing the Risks of America’s Dependence on China for Medicine.”

Already, an article in the Xinhua state-run media agency considered a mouthpiece for the CCP hinted at holding back drugs from the U.S.  The article warned China had the ability to impose pharmaceutical export controls which could throw the U.S into “the mighty sea of coronavirus.”

Sen. Marco Rubio said the Chinese warning proves China feels that during the coronavirus crisis “they can threaten to cut us off from our pharmaceutical supplies, they could trigger a domestic problem here that would make it difficult or us to confront them.”

“It’s a tremendous amount of leverage,” Rubio said.

Holly Strom and Kenneth Schell, both past presidents of the California State Pharmacy Board, documented:

The FDA has identified roughly 20 drugs that are solely made in or derive their active pharmaceutical ingredients from China. The U.S. is partly reliant on Chinese raw ingredients for 370 medicines deemed “essential” by the World Health Organization. **According to one research study, the prices on pharmaceutical raw materials have grown by up to 50% since the outbreak began.

Despite the well-publicized threat, reliance on Chinese medications has only increased in recent years. According to a U.S. government report released last year, U.S. imports of Chinese pharmaceutical materials grew by nearly one-quarter in 2017 from the prior year to nearly $4 billion.

While it’s quite late in the game, several prominent U.S. lawmakers are now advocating for the U.S. to take back control of the drug industry.  Sen. Tom Cotton and Rep. Mike Gallagher introduced the  Protecting Our Pharmaceutical Supply Chain From China Act aimed at ending U.S. dependence on Chinese drugs.

Among other things, the legislation offers incentives for manufactures to produce drugs domestically and requires federal entities to cut off the purchase of drugs with Chinese ingredients by 2025.

3 – China’s so-called debt diplomacy may bring it more control as Chinese coronavirus puts global economies into a tailspin.

China’s expansionist Belt and Road Initiative (BRI) and other Chinese moves have long positioned China as a debt collector that can use the payments it is owed to influence those countries in its debt. With coronavirus causing worldwide economic turmoil, China may find itself with even more economic control over certain countries even though Beijing will take a big hit from its inability to collect debts.

Azeem Ibrahim, research professor at the Strategic Studies Institute of the U.S. Army War College, took note of what he described as China’s “debt-based model of imperial control” and how the Chinese coronavirus outbreak could expand that influence.

Ibrahim wrote:

As these countries frantically attempt to manage the economic and financial consequences of the pandemic, they will struggle to service their debts to Beijing—which will expect more favors, and the ceding of more sovereignty, as the cost of debt relief.

Economic suffering is inevitable; as unemployment numbers grow and small businesses stare down the barrel of bankruptcy, it’s already arrived for many. Some may be more resilient than others, but dependent developing countries such as Liberia and Niger are going to be especially vulnerable. Their capacity to respond to the pandemic will be constrained by their relatively limited resources. And preexisting exposure to debt can put them in a real bind when forced to make choices between the lives of their citizens and becoming even more vulnerable to powerful creditors, most notably China.

The role of debt in China’s expansion of its sphere of influence along the Belt and Road is already well documented and understood. So-called “debt-trap diplomacy” has already seen Sri Lanka effectively lose sovereign control of one port on the Indian Ocean. Djibouti, Tajikistan, Kyrgyzstan, Laos, Maldives, Mongolia, Pakistan, and Montenegro have all been identified as at risk of similarly losing sovereign control over areas of interest to China, as they all already owe more than 45 percent of their gross domestic products to Beijing over Belt and Road projects.

In the spirit of never letting a crisis go to waste, there are indications China is already using the coronavirus pandemic to reposition its Belt and Road Initiative (BRI), a development strategy with focus on securing Chinese infrastructure projects in over 70 countries, including across Europe, Asia and Africa. China critics see the Belt and Road Initiative as a Trojan horse scheme to expand Chinese dominance globally, in part using a strategy of low bids to ensure successful tenders.

In the wake of the pandemic, China is offering low-cost financing and special foreign exchange liquidity loans for companies involved the BRI, Beijing announced earlier this month. This as the BRI seems to have hit a short-term roadblock because many countries put a freeze on labor coming from China over fears the coronavirus could be spread.

While some analysts say China’s massive international infrastructure project might actually take a short term knock from coronavirus, others believe the increased demand for Chinese cooperation on healthcare and virus response will open doors for BRI’s ultimate expansion.

Matt Ferchen, head of global China research with the Mercator Institute for China Studies in Germany, saw both sides of the coin on the BRI issue. “That China would see belt and road as a natural platform for extending such public diplomacy efforts, especially in developing countries, is not a surprise,” Ferchen remarked.
“The underlying contradiction, however, is that belt and road is a symbol of Chinese-led efforts at promoting the benefits of connectivity, while the virus has exposed the risks and weaknesses of connectivity on a global scale,” he said.

4. China seems to be implementing a post-virus strategy to gain ground from the U.S.

As long as the U.S. economy remains in question, China will seek to take advantage in the perceived power vacuum created during the pandemic – likely at the expense of the U.S.

“China has a long-standing strategic plan that’s focused on co-opting nodes and systems in which it thinks it can claim coercive power over the United States and the global system,” said Emily de La Bruyere, co-founder of Horizon Advisory, a consulting firm that tracks China. “Now that the world is shutting down, China sees its opportunity to move in much more quickly and aggressively to those nodes and systems.”

“They have a post-virus strategy, and it is already underway,” added Nate Picarsic, the other co-founder of Horizon Advisory.

Citing Chinese government and media sources, Horizon issued a report last week documenting “Beijing intends to reverse recent US efforts to counteract China’s subversive international presence; at the same time to chip away at US-Europe relations.”

Washington Post columnist Josh Rogin penned a piece titled, “How China is planning to use the coronavirus crisis to its advantage.”

“In Washington, there’s a lot of talk about how the coronavirus crisis could increase the push for more economic decoupling with China. But the Chinese government is thinking about it in exactly the opposite way. Beijing is preparing to use the crisis to advance China’s economic strategy against us. We better start taking notice,” Rogin warned.

Aaron Klein is Breitbart’s Jerusalem bureau chief and senior investigative reporter. He is a New York Times bestselling author and hosts the popular weekend talk radio program, “Aaron Klein Investigative Radio.” Follow him on Twitter @AaronKleinShow.

Joshua Klein contributed research to this article. Follow him on Twitter @JoshuaKlein_

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