China Macro Reporter
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April 2020

<table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center; overflow:hidden"><tbody><tr><td style="max-width:600px"><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background:#fff"><tbody><tr><td style="padding:3.5%; text-align:left;"><img width="110px" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate"></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom:none; text-decoration:none;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://assets.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: gorditamedium, sans-serif; color:#001544; font-weight:bold; letter-spacing: -0.5px; line-height: 1;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:35px; padding-top:10px; font-size: 13px; color:#001544; font-family:'gordita', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>April 4, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:7px 0; font-size: 1.175em; font-family: Georgia, serif; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/4lhEIa?track_p_id=czwi3OfFG6az49CHlzq_P5V" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/uhp7CvL-kYuJYdwsZTPG2Ui__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/4lhEIa?track_p_id=169CHlzq_xs5AgRiir1B36M" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">A World on Fire</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: inline-block;font-size: 1.35em;margin-top: 0em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Perhaps </strong>I’m naïve or just optimistic by nature.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">But I don’t see the pandemic</strong> as an enduring health or economic catastrophe that will change the world order.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">That said,</strong> I was persuaded to re-examine, if not necessarily change, that view after I read Henry Kissinger’s WSJ Commentary <strong style="font-weight: bold">‘The Coronavirus Pandemic Will Forever Alter the World Order.’</strong></p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And I wanted to bring that commentary to you, </strong>along with some other perspectives, for your consideration.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Dr. Kissinger</strong> writes:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The reality is the world</strong> will never be the same after the coronavirus.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Leaders are dealing with the crisis</strong> on a largely national basis, but the virus’s society-dissolving effects do not recognize borders.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘While the assault on human health</strong> will—hopefully—be temporary, the political and economic upheaval it has unleashed could last for generations.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The historic challenge</strong> for leaders is to manage the crisis while building the future.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Failure</strong> could set the world on fire.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Were we living</strong> in an era of a fraught but stable world order, we might dismiss this as the apocalyptic musings of a very old man.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">But are living in age of transition,</strong> and Henry Kissinger is as acute as ever.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">An age of transition.</strong></p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">On political transition: </strong>‘The liberal order is exhibiting its own signs of deterioration,’ Richard Haass, president of the Council on Foreign Relations wrote before the pandemic.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">On</strong><strong style="font-weight: bold">economic transition</strong>: ‘The global economy is undergoing a&nbsp;<a href="https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Innovation/Globalization%20in%20transition%20The%20future%20of%20trade%20and%20value%20chains/MGI-Globalization%20in%20transition-The-future-of-trade-and-value-chains-Full-report.ashx" rel="nofollow">major transition</a>, owing to the rise of emerging economies, especially in Asia, and the digital transformation of business models and global supply chains,’ wrote Mike Spence, Nobel laureate in economics.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Back to Richard Haass. </strong>‘A stable&nbsp;<a href="https://www.foreignaffairs.com/articles/2016-12-12/world-order-20" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">world order</a>&nbsp;is a rare thing.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘When one does arise,</strong> it tends to come after a great convulsion that creates both the conditions and the desire for something new.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Which brings us to the issue Dr. Kissinger raises:</strong> Is the pandemic that ‘great convulsion’ that precedes a new world order? He writes:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Nations cohere and flourish</strong> on the belief that their institutions can foresee calamity, arrest its impact and restore stability.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘When the Covid-19 pandemic is over,</strong> many countries’ institutions will be perceived as having failed.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Whether this judgment</strong> is objectively fair is irrelevant.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Eventually, inevitably,</strong> even the best-managed order comes to an end,’ writes Richard Haass.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">How much faster</strong> could that end come if there is a widespread perception that the institutions of individual states have failed their citizens?</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">But, ‘if the end of every order</strong> is inevitable, the timing and the manner of its ending are not,’ Haass says.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Nor is what comes</strong> in its wake.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Crafting what comes </strong>in the pandemic’s wake must begin now says Dr. Kissinger, just as planning for the new order following World War II began in the midst of that war:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The crisis effort,</strong> however vast and necessary, must not crowd out the urgent task of launching a parallel enterprise for the transition to the post-coronavirus order.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Addressing the necessities</strong> of the moment must ultimately be coupled with a global collaborative vision and program.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If we cannot do both in tandem,</strong> we will face the worst of each.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But</strong><strong style="font-weight: bold">is a ‘global collaborative vision and program’</strong> possible? Especially in the world Richard Haass describes:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Today’s world order</strong> has struggled to cope with power shifts: China’s rise, the appearance of several medium powers (Iran and North Korea, in particular) that reject important aspects of the order, and the emergence of nonstate actors (from drug cartels to terrorist networks) that can pose a serious threat to order within and between states.’&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The technological</strong> and political context has changed in important ways, too.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Globalization</strong> has had destabilizing effects, ranging from climate change to the spread of technology into far more hands than ever before, including a range of groups and people intent on disrupting the order.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Nationalism and populism</strong> have surged—the result of greater inequality within countries, the dislocation associated with the 2008 financial crisis, job losses caused by trade and technology, increased flows of migrants and refugees, and the power of social media to spread hate.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Meanwhile,</strong> effective statecraft is conspicuously lacking.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Today there</strong> is no Roosevelt, no Churchill, not even a Stalin who could work together to work to create a ‘global collaborative vision and program.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And if today's leaders </strong>do not rise to that task, will Dr. Kissinger’s prediction - ‘failure could set the world on fire’ - be realized?</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">I have long been fascinated</strong> by Weimar Germany and Shanghai during the long years of that ‘great convulsion,’ the Great Depression.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">I have often tried to imagine</strong> living in a world where the ideologies of democracy, fascism, and communism each offered a competing vision of how to bring the world out of the morass and vied with each other for supremacy.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">My ability </strong>to fully realize these musings has always been inhibited by knowing how the story ends.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">But I have never considered</strong> that one day I might actually live in an age where the world order was up for grabs and the outcome unknown.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And I don’t believe</strong> I am today.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Still, given the situation</strong> when the pandemic arrived, I also believe I could be wrong.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">We love ‘Letters to the Editor,’</strong>&nbsp;so send me your thoughts on anything here or anything about China.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And please forward</strong>&nbsp;the China Macro Reporter to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best,&nbsp;</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Malcolm</strong>&nbsp;</p><h2 style="display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">NOTE:&nbsp;To read the main articles, please click on the title.&nbsp;</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:40px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">1. What a Difference a Year Makes</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center;"><tbody><tr><td style="max-width:600px"><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td><img width="100%" src="https://img.scoop.it/AhQa-sOWYp6gvkH96Z5wsTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e"></td></tr></tbody></table></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/5nTTaS?track_p_id=7Cd14JiP8KBoTO_kgJNzgWx" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/F5oOqbo1JBgSwB670WGJUki__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5nTTaS?track_p_id=7abDGn2k8KBoTO_QbyB1nBI" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">The Economic Consequences of Global Uncertainty&nbsp;</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Project Syndicate</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Mike Spence </strong>| NYU Stern &amp; Nobel laureate</h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The governments of the world’s leading economic powers do not seem up to the task.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">About a year ago,</strong> on March 25, 2019, Mike Spence wrote:</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The global economy is weakening,</strong> in no small measure because of a deep, widespread sense of uncertainty.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">'And a major source of that uncertainty</strong> is the ongoing Sino-American “trade war.” ' [How long ago does that seem?]</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The global economy</strong> is undergoing a&nbsp;<a href="https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Innovation/Globalization%20in%20transition%20The%20future%20of%20trade%20and%20value%20chains/MGI-Globalization%20in%20transition-The-future-of-trade-and-value-chains-Full-report.ashx" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">major transition</a>, owing to the rise of emerging economies, especially in Asia, and the digital transformation of business models and global supply chains.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And while it is obvious</strong> that global-governance structures and rules need an overhaul,’                      <ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘existing international institutions</strong> lack the power to push through such changes on their own, and’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘the governments</strong> of the world’s leading economic powers do not seem up to the task.’</li></ul></li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Read Mike's other terrific essays</strong> in <a href="https://www.project-syndicate.org/columnist/michael-spence" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">Project Syndicate</a>, <a href="https://www.foreignaffairs.com/search?qs=michael+spence" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">Foreign Affairs</a>, and elsewhere. &nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">2. Kissinger on the Pandemic's Impact</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center;"><tbody><tr><td style="max-width:600px"><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td><img width="100%" src="https://img.scoop.it/K48Aq_VNagSLKi5ooqL-Xjl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e"></td></tr></tbody></table></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background-color:#001544; line-height:1"><tbody><tr><td style="width:25px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><p style="display: block;height: 13px;background-color: #c80000;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td><td style="display:block; padding:5px 5px 5px 12px; text-align:left; font-size: 1.1em; font-family: gorditamedium, sans-serif; font-style: italic; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.5em;">The World Will Never Be The Same.</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/66QCWG?track_p_id=2Yg7Cvgje_IcyNWIMSXBW3T" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/66QCWG?track_p_id=asnf3DFIcg27Cvgje_ZY6zA" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">PART 1: The Coronavirus Pandemic Will Forever Alter the World Order</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Henry Kissinger</strong></h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The reality is the world will never be the same after the coronavirus.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The surreal atmosphere</strong> of the Covid-19 pandemic calls to mind how I felt as a young man in the 84th Infantry Division during the Battle of the Bulge.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Now, as in late 1944,</strong> there is a sense of inchoate danger, aimed not at any particular person, but striking randomly and with devastation.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But there is an important difference</strong> between that faraway time and ours.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘American endurance</strong> then was fortified by an ultimate national purpose.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Now, in a divided country,</strong> efficient and farsighted government is necessary to overcome obstacles unprecedented in magnitude and global scope.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Sustaining the public trust</strong> is crucial to social solidarity, to the relation of societies with each other, and to international peace and stability.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Nations cohere and flourish</strong> on the belief that their institutions can foresee calamity, arrest its impact and restore stability.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘When the Covid-19 pandemic is over,</strong> many countries’ institutions will be perceived as having failed.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Whether this judgment</strong> is objectively fair is irrelevant.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The reality is the world</strong> will never be the same after the coronavirus.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘To argue now about the past</strong> only makes it harder to do what has to be done.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">‘<strong style="font-weight: bold">The U.S. administration</strong> has done a solid job in avoiding immediate catastrophe.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The ultimate test</strong> will be whether the virus’s spread can be arrested and then reversed in a manner and at a scale that maintains public confidence in Americans’ ability to govern themselves.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The crisis effort,</strong> however vast and necessary, must not crowd out the urgent task of launching a parallel enterprise for the transition to the post-coronavirus order.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Leaders are dealing with the crisis</strong> on a largely national basis, but the virus’s society-dissolving effects do not recognize borders.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘While the assault on human health</strong> will—hopefully—be temporary, the political and economic upheaval it has unleashed could last for generations.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background-color:#001544; line-height:1"><tbody><tr><td style="width:25px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><p style="display: block;height: 13px;background-color: #c80000;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td><td style="display:block; padding:5px 5px 5px 12px; text-align:left; font-size: 1.1em; font-family: gorditamedium, sans-serif; font-style: italic; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.5em;">Upheavals That Could Last For Generations</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/6OaWqO?track_p_id=bCdcE%40Cp3QIS8BB35q_SKlQ" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6OaWqO?track_p_id=2Fc8BB35q_IQmhsNWbnZqFe" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">Part 2: The Coronavirus Pandemic Will Forever Alter the World Order</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Henry Kissinger</strong></h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘While the assault on human health will—hopefully—be temporary, the political and economic upheaval it has unleashed could last for generations.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The crisis effort,</strong> however vast and necessary, must not crowd out the urgent task of launching a parallel enterprise for the transition to the post-coronavirus order.'</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">’<strong style="font-weight: bold">‘Leaders are dealing with the crisis</strong> on a largely national basis, but the virus’s society-dissolving effects do not recognize borders.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘While the assault on human health</strong> will—hopefully—be temporary, the political and economic upheaval it has unleashed could last for generations.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘No country,</strong> not even the U.S., can in a purely national effort overcome the virus.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Addressing the necessities</strong> of the moment must ultimately be coupled with a global collaborative vision and program.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If we cannot do both in tandem,</strong> we will face the worst of each.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Drawing lessons</strong> from the development of the Marshall Plan and the Manhattan Project, the U.S. is obliged to undertake a major effort in three domains.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">1. ‘First, shore up global resilience</strong> to infectious disease.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Triumphs of medical science</strong> like the polio vaccine and the eradication of smallpox, or the emerging statistical-technical marvel of medical diagnosis through artificial intelligence, have lulled us into a dangerous complacency.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘We need to develop new techniques</strong> and technologies for infection control and commensurate vaccines across large populations.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Cities, states and regions</strong> must consistently prepare to protect their people from pandemics through stockpiling, cooperative planning and exploration at the frontiers of science.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">2. ‘Second,</strong> strive to heal the wounds to the world economy.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Global leaders</strong> have learned important lessons from the 2008 financial crisis.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The current economic crisis</strong> is more complex: The contraction unleashed by the coronavirus is, in its speed and global scale, unlike anything ever known in history.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And necessary public-health measures</strong> such as social distancing and closing schools and businesses are contributing to the economic pain.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Programs should also seek</strong> to ameliorate the effects of impending chaos on the world’s most vulnerable populations.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">3. ‘Third,</strong> safeguard the principles of the liberal world order.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The founding legend of modern government</strong> is a walled city protected by powerful rulers, sometimes despotic, other times benevolent, yet always strong enough to protect the people from an external enemy.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Enlightenment thinkers</strong> reframed this concept, arguing that the purpose of the legitimate state is to provide for the fundamental needs of the people: security, order, economic well-being, and justice.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Individuals</strong> cannot secure these things on their own.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The pandemic has prompted an anachronism,</strong> a revival of the walled city in an age when prosperity depends on global trade and movement of people.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background-color:#001544; line-height:1"><tbody><tr><td style="width:25px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><p style="display: block;height: 13px;background-color: #c80000;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td><td style="display:block; padding:5px 5px 5px 12px; text-align:left; font-size: 1.1em; font-family: gorditamedium, sans-serif; font-style: italic; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.5em;">A World On Fire</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/7ZFq8u?track_p_id=e3kev4G6kfOWSsE6riAlK_y" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/K9fKxwrt-0GqvuYSovNp30i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7ZFq8u?track_p_id=3Bnm6riAlK_2rFOFsNe6O6G" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">Part 3: The Coronavirus Pandemic Will Forever Alter the World Order</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Wall Street Journal</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Henry Kissinger</strong></h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The historic challenge for leaders is to manage the crisis while building the future. Failure could set the world on fire.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The world’s democracies</strong> need to defend and sustain their Enlightenment values.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘A global retreat</strong> from balancing power with legitimacy will cause the social contract to disintegrate both domestically and internationally.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Yet this millennial issue</strong> of legitimacy and power cannot be settled simultaneously with the effort to overcome the Covid-19 plague.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Restraint is necessary on all sides</strong>—in both domestic politics and international diplomacy.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Priorities </strong>must be established.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘We went on from the Battle of the Bulge</strong> into a world of growing prosperity and enhanced human dignity.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Now, we live</strong> in an epochal period.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The historic challenge</strong> for leaders is to manage the crisis while building the future.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Failure</strong> could set the world on fire.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">3. A New New World Order</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center;"><tbody><tr><td style="max-width:600px"><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td><img width="100%" src="https://img.scoop.it/yklP6Xh_WAyxdFiNVTVYMTl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e"></td></tr></tbody></table></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/8zgzM8?track_p_id=86xdohGJq9BMZp8_343nzFB" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/2P2LxiV-sg54VayqL9X2F0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/8zgzM8?track_p_id=ebY3DaSLSA5pcgb9BMZp8_L" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">What Happens When a World Order Ends</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Richard Haass </strong>| Council on Foreign Relations</h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘The deterioration of a world order can set in motion trends that spell catastrophe.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">In early 2019, </strong>Richard Haass wrote:</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A stable&nbsp;</strong><a href="https://www.foreignaffairs.com/articles/2016-12-12/world-order-20" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">world order</strong></a>&nbsp;is a rare thing.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘When one does arise,</strong> it tends to come after a great convulsion that creates both the conditions and the desire for something new.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Eventually, inevitably,</strong> even the best-managed order comes to an end.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Orders tend</strong> to expire in a prolonged deterioration rather than a sudden collapse.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘But if the end</strong> of every order is inevitable, the timing and the manner of its ending are not.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Nor is what</strong> comes in its wake.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The liberal order </strong>is exhibiting its own signs of deterioration.’&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Authoritarianism </strong>is on the rise not just in the obvious places, such as China and Russia, but also in the Philippines, Turkey, and eastern Europe.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Global trade has grown,</strong> but recent rounds of trade talks have ended without agreement, and the World Trade Organization (WTO) has proved unable to deal with today’s most pressing challenges.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Resentment </strong>over the United States’ exploitation of the dollar to impose sanctions is growing, as is concern over the country’s accumulation of debt’.&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The UN Security Council</strong> is of little relevance to most of the world’s conflicts, and international arrangements have failed more broadly to contend with the challenges associated with globalization. The composition of the Security Council bears less and less resemblance to the real distribution of power.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The world has put itself</strong> on the record as against genocide and has asserted a right to intervene when governments fail to live up to the “responsibility to protect” their citizens, but the talk has not translated into action.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The Nuclear Nonproliferation Treaty</strong> allows only five states to have nuclear weapons, but there are now nine that do (and many others that could follow suit if they chose to).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The EU,</strong> by far the most significant regional arrangement, is struggling with Brexit and disputes over migration and sovereignty.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And around the world,</strong> countries are increasingly resisting U.S. primacy.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The deterioration of a world order</strong> can set in motion trends that spell catastrophe.'</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘What we are seeing today</strong> resembles the mid-nineteenth century in important ways: the post–World War II, post–Cold War order cannot be restored, but the world is not yet on the edge of a systemic crisis.'</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Now is the time</strong> to make sure one never materializes, be it from a breakdown in U.S.-Chinese relations, a clash with Russia, a conflagration in the Middle East, or the cumulative effects of climate change.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The good news</strong> is that it is far from inevitable that the world will eventually arrive at a catastrophe; the bad news is that it is far from certain that it will not.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div></td></tr></tbody></table>

<table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center; overflow:hidden"><tbody><tr><td style="max-width:600px"><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background:#fff"><tbody><tr><td style="padding:3.5%; text-align:left;"><img width="110px" src="https://assets.website-files.com/5c864c33af62620dca1373ac/5d86577f82aa6e55afacb4ea_cd%20long-fit.png" alt="CHINADebate"></td></tr><tr><td style="padding:3.5%; text-align:center;"><a style="border-bottom:none; text-decoration:none;" href="https://www.chinadebate.com/china-macro-reporter/archive" target="_blank"><img style="width:70px; border-radius:3%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19);" src="https://assets.website-files.com/5a3e922cf6b9a40001bc2d6b/5e3dbbf161e6c357b022bea5_China%20Macro%20Reporter%20.png" alt="China_Macro_Reporter"></a></td></tr><tr><td style="text-align:center; font-size: 27px; font-family: gorditamedium, sans-serif; color:#001544; font-weight:bold; letter-spacing: -0.5px; line-height: 1;">China Macro Reporter</td></tr><tr><td style="text-align:center; line-height:1.5; padding-bottom:35px; padding-top:10px; font-size: 13px; color:#001544; font-family:'gordita', sans-serif;">By Malcolm Riddell<span style="margin:0 6px">·</span>April 1, 2020</td></tr><tr><td style="text-align:center; line-height:1.5; display:block; max-width:480px; margin:0 auto; padding:7px 0; font-size: 1.175em; font-family: Georgia, serif; color:#c80000; font-weight:normal; letter-spacing: -0.5px; border-bottom:2px solid #c80000;">Opening Statement</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/9CRXto?track_p_id=8pK3uDwu18MOjlO_Rk4PEZN" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/uhp7CvL-kYuJYdwsZTPG2Ui__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/9CRXto?track_p_id=3Gkq8MOjlO_ZaTy6F4T3NbQ" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">Lies, Damn Lies, &amp; China</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h1 style="display: inline-block;font-size: 1.35em;margin-top: 0em;margin-bottom: 0em;margin-left: 0;margin-right: 0;line-height: 1.35em;font-weight: normal;font-family: gorditamedium, sans-serif;color: #001544;letter-spacing: -0.1px;"><strong style="font-weight: bold">Greetings!</strong></h1><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">The last China Macro Reporter</strong> – 'Is a "Greater Depression" coming?' – bummed so many readers out that I tried to find something more optimistic.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And I did,</strong> optimistic at least for Americans.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><span style="color: #d0021b"><strong style="font-weight: bold">‘Why China Won't Overtake the U.S. Economy Any Time Soon’</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Few Americans alive today</strong> will be around to see the United States economy fall to second place after China,’&nbsp;contends Ruchir Sharma&nbsp;Chief Global Strategist at Morgan Stanley Investment Management.&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If into the future,</strong> China and the United States maintained their officially reported 2019 nominal GDP&nbsp;growth rates—around six percent and four percent, respectively—China would not catch up to the United States until around 2050.’&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If its growth slowed</strong> by one percentage point, China would not catch up until 2090, and even that pace would be tough to sustain.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Ruchir goes on </strong>to compare China’s growth with South Korea and Taiwan, and discuss the problems of China’s shrinking workforce:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Historically,</strong> countries with a shrinking workforce have had virtually no chance of sustaining rapid economic growth for even one decade.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Most interestingly, </strong>he discusses China’s debt problem:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China has not suffered a recession</strong> since its economic boom began four decades ago.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But at any hint of a downturn,</strong> China’s leaders now respond by pumping more debt into the economy.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><span style="color: #d0021b"><strong style="font-weight: bold">Lies, Damn Lies, and China</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China has concealed</strong> the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House,’ reports Bloomberg.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">But even before this report,</strong> AEI’s Derek Scissors asked <strong style="font-weight: bold">‘Why do you believe China (about COVID-19)?’</strong></li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Hubei</strong> reports 68,000 diagnoses and 3200 deaths,’&nbsp;Derek writes.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The population of Hubei</strong> is roughly 60 million.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Millions&nbsp;were said</strong> to have left Hubei prior to quarantine.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The entire rest of China </strong>reports a bit over 14,000 cases and closing on 130 deaths (time of writing [March 27]).’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The population</strong> of the rest of China is a bit over 1.3 billion.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘You might see</strong> where I’m going here.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">This could be treated</strong> just as another case of dodgy Chinese numbers, except that in a spreading pandemic, other countries and localities have relied on China’s reported cases and deaths to craft their models and responses to COVID-19</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">Bad Chinese numbers,</strong> bad models and responses.</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">And some </strong>pretty negative impressions of China as global citizen.</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><span style="color: #d0021b"><strong style="font-weight: bold">Getting China's PMI Wrong</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘After a terrible collapse</strong> in February to 35.7 — a record low — as the People’s Republic shut down to stop coronavirus, March’s manufacturing<strong style="font-weight: bold"> purchasing managers index (PMI) </strong>came in at what optically looks like a&nbsp;<a href="http://data.stats.gov.cn/english/swf.htm?m=turnto&amp;id=1" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">pretty positive 52</a>,’ the FT reports.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Charlie Robertson, </strong>Global Chief Economist of Renaissance Capital said this of the latest PMI numbers: “This is probably the most embarrassing statistic for the West that China could possibly release. Not only did China stop the virus with just 3,309 deaths, they also appear to have done it with just a one-month shutdown of the economy.”&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The problem is,</strong> that’s not what the number suggests.’ [And the death count is wrong too.]</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Think of it like</strong> the speed of a car.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If you’re travelling</strong> at 100 miles per hour and brake to a pace of 70 miles per hour, that’s a huge relative drop.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Think of that</strong> like China’s PMI crashing to 35.7 in February from 50 in January.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘However, you then gently tap</strong> the accelerator and your speed increases by 2 miles per hour.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Now, that is faster relative</strong> to the slower speed you were just travelling at, but it’s nowhere near the speed-limit busting 100mph you were flying along at just a few moments ago.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘As China’s National Bureau of Statistics</strong> said:’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“...[the PMI reading] reflects</strong> that more than half of the surveyed enterprises have resumed work and resumed production, better than last month, but it does not mean that China's economic operation has returned to normal.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><span style="color: #d0021b"><strong style="font-weight: bold">‘China and the Oil Price War’</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China and the Oil Price War: A Mixed Blessing,’</strong> a 17-page report by the Center on Global Energy Policy at Columbia University, points out:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The oil price collapse</strong> triggered by the end of Saudi-Russian cooperation earlier this month will deliver significant benefits for China’s economy.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘As the world’s largest net oil importer,</strong> China stands to benefit from a substantial drop in its oil import bill.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘However,</strong> coronavirus-related restrictions on economic activities in China and around the world, as well as the $40 per barrel floor under domestic fuel prices, may limit the extent to which lower oil prices stimulate economic growth.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">A lot more in this great report,</strong> and if you’re an oil junkie like me, you’ll love it.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><span style="color: #d0021b"><strong style="font-weight: bold">Globalization &amp; Supply Chains</strong></span></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Besides being an oil junkie,</strong> I am most fascinated by what’s happening with globalization and supply chains. Speculating on these two topics, Bill Reinsch of CSIS, writes:</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The United States</strong> is a mature, slow-growth economy with 95 percent of the world's consumers lying outside its borders.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If it wants to grow economically,</strong> it has to trade, and that inevitably means importing as well as exporting. The same is true of Europe.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">More concretely,</strong> Bill discusses the unsung heroes of supply chains: the supply chain managers.</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The coronavirus crisis</strong> has taught them that supply chains are a lot more fragile than they thought, that supplies can be suddenly interrupted for unexpected reasons.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Frankly,</strong> at this point, I have more confidence in the supply chain managers than I do in governments.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">You might substitute</strong> most anything for ‘supply chain managers’ in that sentence, and you’d be right.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">We love ‘Letters to the Editor,’</strong>&nbsp;so send me your thoughts on anything here or anything about China.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">And please forward</strong>&nbsp;the China Macro Reporter to your friends and colleagues.</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Best, Malcolm</strong>&nbsp;</p><h2 style="display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">NOTE:&nbsp;To read the main articles, please click on the title.&nbsp;</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:40px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">1. China's Dodgy COVID-19 Numbers</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background-color:#001544; line-height:1"><tbody><tr><td style="width:25px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><p style="display: block;height: 13px;background-color: #c80000;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td><td style="display:block; padding:5px 5px 5px 12px; text-align:left; font-size: 1.1em; font-family: gorditamedium, sans-serif; font-style: italic; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.5em;">China Mislead the World on the Extent of Virus</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/75MUdc?track_p_id=aKkVFHAXalq7unWPe_tElKo" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/Q7K3LvBpUHwYzkoXdXm2WUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/75MUdc?track_p_id=6bgtg2L7unWPe_VU6f2aM51" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">China Concealed Coronavirus Outbreak Extent: U.S. Intelligence&nbsp;</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Bloomberg</strong></h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘China has concealed the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease.'</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China has concealed</strong> the extent of the coronavirus outbreak in its country, under-reporting both total cases and deaths it’s suffered from the disease, the U.S. intelligence community concluded in a classified report to the White House.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The outbreak</strong> began in China’s Hubei province in late 2019, but the country has publicly reported only about 82,000 cases and 3,300 deaths, according to&nbsp;<a href="https://www.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6" rel="nofollow">data compiled by Johns Hopkins University</a>.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That compares</strong> to more than 189,000 cases and more than 4,000 deaths in the U.S., which has the largest publicly reported outbreak in the world.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; background-color:#001544; line-height:1"><tbody><tr><td style="width:25px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><p style="display: block;height: 13px;background-color: #c80000;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;">&nbsp;</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td><td style="display:block; padding:5px 5px 5px 12px; text-align:left; font-size: 1.1em; font-family: gorditamedium, sans-serif; font-style: italic; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.5em;">Why China's COVID-19 Numbers Don't Add Up</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/7xrTc0?track_p_id=8vX4O2tAl5jteqU_KX6TmWG" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/qAD7kBqLceF6aukL4-Brm0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7xrTc0?track_p_id=ci2YgcXkagq1r5jteqU_VUp" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">Why do you believe China (about COVID-19)?</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">American Enterprise Institute (AEI)</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Derek Scissors</strong> | AEI</h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘If you think that, despite at least a month of uncontrolled movement, the government performed miracles to stop COVID-19 in other provinces, you might believe China’s numbers.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Headlines appeared</strong> yesterday afternoon — “US passes China in COVID-19 cases!” Who says?’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Often it’s the&nbsp;</strong><a href="https://coronavirus.jhu.edu/map.html" rel="nofollow"><strong style="font-weight: bold">Johns Hopkins map</strong></a><strong style="font-weight: bold">.</strong> That site gives its main China source as an aggregator known as&nbsp;<a href="https://ncov.dxy.cn/ncovh5/view/pneumonia?scene=2&amp;clicktime=1579582238&amp;enterid=1579582238&amp;from=singlemessage&amp;isappinstalled=0" rel="nofollow">DXY</a>.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But is COVID-19</strong> possibly a sensitive issue in China? (<a href="https://www.youtube.com/watch?v=FB6Yag2mbh4" rel="nofollow">Hint: yes</a>).’&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If so,</strong> why would anyone believe these sites know the true situation, or could report it if they did?’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘What DXY</strong> – China’s main COVID-19 aggregator - reports 68,000 diagnoses and 3200 deaths in Hubei.’&nbsp;</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The population of Hubei</strong> is roughly 60 million.'</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Millions&nbsp;were said</strong> to have left Hubei prior to quarantine.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The entire rest of China </strong>reports a bit over 14,000 cases and closing on 130 deaths (time of writing [March 27]).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The population</strong> of the rest of China is a bit over 1.3 billion.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘You might see</strong> where I’m going here.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘A country handling</strong> COVID-19 well is South Korea.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘An&nbsp;</strong><a href="https://www.cdc.go.kr/board/board.es?mid=a30402000000&amp;bid=0030" rel="nofollow"><strong style="font-weight: bold">aggressive testing program</strong></a><strong style="font-weight: bold">,</strong> effective containment of an outbreak site, and far fewer cases than Germany.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘South Korea</strong> is richer than China. It has less than four percent of the population of China excluding Hubei.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Given proximity to Hubei</strong> and the enormous population difference, you’d think the rest of China would reasonably have 30 times as many COVID-19 deaths as South Korea and still get credit for it, since South Korea is held up as a model.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘That’s off</strong> by about a factor of 31.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The rest of China reports</strong> slightly fewer deaths than South Korea.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">2. COVID-19, Globalization &amp; Supply Chains</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/5LUvD6?track_p_id=bTsl341oHUxP7yWrs6_cvrp" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/VcdAHHrWxK2Oai7z2r1MjUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/5LUvD6?track_p_id=2ZN7yWrs6_FuMq3NusloAUt" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">Looking Ahead:&nbsp;Globalization &amp; Supply Chains</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Center for Strategic &amp; International Studies</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Bill Reinsch</strong> | CSIS</h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Frankly, at this point, I have more confidence in the supply chain managers than I do in governments.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘This week’s column</strong> is about that future—how the pandemic might affect global economic integration.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Of course,</strong> it is way too early to be definitive about that, but I can offer some speculation.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘First, globalization</strong> has been enabled by major technological advances that have drastically reduced the cost of transportation and communication over the past 50 years.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Those advances</strong> are not going away—they cannot be "uninvented"—so the tools of global integration will remain.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The specific instruments</strong> of transportation and communication, i.e., the companies that provide those services, may come and go, but those that leave the scene will be replaced by others.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Second, the big question</strong> is whether those tools will be used in the same way and to the same degree as they have been.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘We are now,</strong> predictably, seeing apostles of autarky like Peter Navarro arguing that anything of importance needs to be made here by Americans for Americans.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If that becomes a popular refrain</strong> here and elsewhere, we will not see a recovery of world trade and will see instead economic stagnation for a long time.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The United States</strong> is a mature, slow-growth economy with 95 percent of the world's consumers lying outside its borders.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If it wants to grow economically,</strong> it has to trade, and that inevitably means importing as well as exporting. The same is true of Europe.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘So, I think that wise governments,</strong> if there are any, will eventually push us back toward global trade as a means of promoting jobs and growth.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘This will not occur easily,</strong> quickly, or without resistance from the Navarros of the world.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Third, a corollary question</strong> is what corporate supply chain managers will do.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Trained to find</strong> what they need at the lowest cost, highest quality, and most accommodating delivery schedule, they are now moving into a world where that won't be good enough.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The coronavirus crisis</strong> has taught them that supply chains are a lot more fragile than they thought, that supplies can be suddenly interrupted for unexpected reasons.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And that a prudent manager</strong> needs to take resiliency into account, which means not only having a Plan B, but a Plan C and Plan D as well, one or more of which includes domestic sources of supply.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘That is a transition</strong> that will take years since it involves not only identifying alternative sources of supply but training, inspecting, and certifying them.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It will be expensive</strong> and lead to sub-optimal outcomes. Some parts and components will cost more; quality might suffer.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘And companies</strong> will become less globally competitive as a result.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Companies will invest</strong> in alternatives that protect themselves in the event of emergencies, but that will take time and cost more.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Frankly,</strong> at this point, I have more confidence in the supply chain managers than I do in governments.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The former</strong> will do their job as best they can within whatever rules framework they are given, and their companies will survive.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">3. U.S. &amp; China Economies</td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/7vagZU?track_p_id=06eSEVq_VGtqEVUU%40JpV3db" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/2P2LxiV-sg54VayqL9X2F0i__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/7vagZU?track_p_id=bWVqQAbtbi126eSEVq_AGPj" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">Why China Won't Overtake the U.S. Economy Any Time Soon</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Foreign Affairs</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Ruchir Sharma</strong>&nbsp;</h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Chief Global Strategist at Morgan Stanley Investment Management&nbsp;</h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘Few Americans alive today will be around to see the United States fall to second place after China.’&nbsp;</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘In most tellings,</strong> the declinist narrative reaches its denouement when the United States loses its place as the world’s largest economy to China.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Often, this story</strong> is couched in historical inevitability, evoking the vastness of China’s population, the glories of its imperial past, even the fact that&nbsp;<a href="https://www.businessinsider.com/history-of-chinese-economy-1200-2017-2017-1" rel="nofollow">sixteenth-century China&nbsp;</a>accounted for 25 percent of the global economy—as if distant past performance guaranteed future results.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Declinists often exaggerate</strong> how soon China could overtake the United States by assuming that it can maintain overstated growth rates indefinitely and never once suffer a financial crisis or a recession.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘For the sake of argument,</strong> let’s pretend that these exercises in straight-line extrapolation make sense.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If into the future,</strong> China and the United States maintained their officially reported 2019 nominal GDP&nbsp;growth rates—around six percent and four percent, respectively—China would not catch up to the United States until around 2050.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘And since all developing economies</strong> slow down as they mature and grow richer, China’s economy is likely to slow further than it already has over the past decade.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If its growth slowed</strong> by one percentage point, China would not catch up until 2090, and even that pace would be tough to sustain.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘South Korea and Taiwan,</strong> the two most successful development stories in history, grew rapidly for five decades, then slowed sharply.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China has already</strong> been growing rapidly for&nbsp;<a href="https://www.macrotrends.net/countries/CHN/china/gdp-growth-rate" rel="nofollow">four decades</a>.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Moreover, South Korea and Taiwan</strong> boomed during the postwar miracle years, when economic growth was supercharged all over the world by the baby boom and hyperglobalization.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Now, the baby boom</strong> has gone bust. Trade growth has stalled. Economic growth is slowing worldwide.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And all these</strong> headwinds are hitting China harder than the United States.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘What is more,</strong> China’s debt now amounts to nearly 270 percent of GDP (the comparable figure in the United States is 250 percent).’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘And it is much harder</strong> for a middle-income country such as China to grow with a debt that high.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Zombies account</strong> for ten percent of corporate debt in China.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘So unlike in 2008,</strong> when its debt was much lower, China is now highly vulnerable to a global financial crisis.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘China has not suffered a recession</strong> since its economic boom began four decades ago.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But at any hint of a downturn,</strong> China’s leaders now respond by pumping more debt into the economy.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The most important driver</strong> of any economy is the working-age population, which is still growing in the United States but started shrinking in China five years ago.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Historically,</strong> countries with a shrinking workforce have had virtually no chance of sustaining rapid economic growth for even one decade.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Yet declinists</strong> assume that China’s rise can continue indefinitely.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘More likely,</strong> few Americans alive today will be around to see the United States fall to second place.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">4. China &amp; the Oil Price War</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center;"><tbody><tr><td style="max-width:600px"><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td><img width="100%" src="https://img.scoop.it/0v_8BS-xIYoXP-h77I3hezl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e"></td></tr></tbody></table></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/9AAX0S?track_p_id=2NE7jpDPq_zPBGQ6klq4nGZ" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/tZCxX6oy9oLVVH5sZ8I01Ui__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/9AAX0S?track_p_id=clXoLEsaQ25bJ7jpDPq_EpV" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">China and the Oil Price War: A Mixed Blessing</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Center on Global Energy Policy, Columbia University</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Dr. Erica Downs,&nbsp;Antoine Halff,&nbsp;David Sandalow&nbsp;&amp;&nbsp;Erin Blanton</strong></h3><h3 style="display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;">Center on Global Energy Policy, Columbia University</h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">‘As the world’s largest net oil importer, China stands to benefit from a substantial drop in its oil import bill.’</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">Read </strong>the great 17-page report<strong style="font-weight: bold"></strong><a href="https://energypolicy.columbia.edu/sites/default/files/file-uploads/China%20commentary,%20final%20design,%203.24.20.pdf" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">here</strong></a><strong style="font-weight: bold">.</strong></p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The oil price collapse</strong> triggered by the end of Saudi-Russian cooperation earlier this month will deliver significant benefits for China’s economy.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘As the world’s largest net oil importer,</strong> China stands to benefit from a substantial drop in its oil import bill.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘However,</strong> coronavirus-related restrictions on economic activities in China and around the world, as well as the $40 per barrel floor under domestic fuel prices, may limit the extent to which lower oil prices stimulate economic growth.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The price collapse</strong> is a mixed bag for China’s oil industry. It provides an opportunity for refiners to:’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘profit</strong><strong style="font-weight: bold">from the difference</strong> between higher state-set fuel prices and lower international crude prices (when crude trades below $40), and’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘increase product exports</strong> and consolidate China’s role as a regional refining hub; and—depending on the amount of available crude oil storage capacity in China—stock up on cheap crude to sell at a profit when oil prices recover.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘That said,</strong> the oil price collapse is not all bad news for China’s energy security.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘China benefits</strong> from the ongoing competition between its two largest crude suppliers: Russia and Saudi Arabia.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘In addition,</strong> a sustained period of low oil prices would provide China with the opportunity to meet more of its future import requirements with cheaper LNG, reducing reliance on Russian and Central Asian gas exporters.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Lower oil prices</strong> will have only modest impacts on Chinese emissions and pollution levels.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘On the plus side,</strong> lower oil prices support Beijing’s policy of converting heating in northern China from coal to natural gas (since natural gas prices are often tied oil prices).’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘On the minus side,</strong> lower oil prices may somewhat slow the development of China’s EV industry and increase purchases of larger, more-polluting SUVs.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Finally, the oil price collapse</strong> will make the energy purchase targets in the Phase 1 US-China trade deal more challenging for China to achieve.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Those targets</strong> were unlikely to be met in any event, and the combination of the coronavirus pandemic and oil price collapse may provide both countries with a face-saving way to explain the failure to deliver on the energy purchase terms of that agreement.’ &nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td style="height:20px; font-size:0; background-color:#f6f6f6;">&nbsp;                </td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto;"><tbody><tr><td style="text-align:center; display:block; padding:10px; background-color:#c80000; font-size: 1.375em; font-family: gorditamedium, sans-serif; color:#ffffff; font-weight:bold; letter-spacing: 0px; line-height:1.35em; border-bottom:2px solid #f6f6f6;">5. China PMI</td></tr></tbody></table></div><div><table cellpadding="0" cellspacing="0" width="100%" style="background-color:#f6f6f6; text-align: center;"><tbody><tr><td style="max-width:600px"><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td><img width="100%" src="https://img.scoop.it/eCVTaxQk4oMjT728vallMjl72eJkfbmt4t8yenImKBXdhNIf0Yl8YfRAVzhohB7e"></td></tr></tbody></table></td></tr></tbody></table></div><div><table cellspacing="0" cellpadding="0" style="max-width:600px; width:100%; margin:0 auto; text-align:left; background:#fff"><tbody><tr><td style="padding:3.5% 3% 3.5% 3.5%"><table cellspacing="0" cellpadding="0" width="100%"><tbody><tr><td width="50px" style="display:block;"><a href="http://sco.lt/6Kb4xU?track_p_id=3dfS97RkZa_RY3UYH6%403oLR" target="_blank" title="SourceLogo"><img height="50px" width="auto" alt="SourceLogo" src="https://img.scoop.it/zxbyrGBKPhFFZLzMYqfYnUi__cjguAuwrRM5-qsdIhQ=" style="display:block; overflow:hidden; border: 1px solid #ddd; border-radius:10%; box-shadow: 0 4px 8px 0 rgba(0, 0, 0, 0.2), 0 2px 6px 0 rgba(0, 0, 0, 0.19); width:auto;"></a></td><td width="100%" style="padding-left:5%;"><a href="http://sco.lt/6Kb4xU?track_p_id=5JSfne97RkZa_1a2K36Y%406v" style="color:#001544; font-size:1.3em; font-weight:bold; font-family: Georgia, serif; letter-spacing: -0.1px; line-height: 1.5; text-decoration: none; border-bottom:none;" target="_blank">China’s Latest PMI Numbers Aren’t as Good as They Look</a></td></tr></tbody></table></td></tr><tr><td style="height:0px; font-size:0">&nbsp;</td></tr><tr><td style="padding:0 3.5%; font-size: 1em; font-family: gorditamedium, sans-serif; color: #001544; line-height: 1.5em; letter-spacing:-0.1px;"><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p><h3 style="text-align: right;display: block;font-size: 0.85em;margin-top: 0em;margin-bottom: 0.3em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #5d5d5d;letter-spacing: -0.1px;line-height: 1.35em;"><strong style="font-weight: bold">Barron’s &amp; Financial Times</strong></h3><h2 style="text-align: center;display: block;font-size: 1.15em;margin-top: 1em;margin-bottom: 1em;margin-left: 0;margin-right: 0;font-weight: normal;font-family: Georgia, serif;color: #c80000;border-top: 0px solid #ddd;padding: 0.5em 3.5% 0.5em 3.0%;letter-spacing: -0.1px;line-height: 1.5em;background-color: #f6f6f6;"><strong style="font-weight: bold">“China’s PMI reflects that more than half of the surveyed enterprises have resumed work and resumed production, better than last month, but it does not mean that China's economic operation has returned to normal.”</strong></h2><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><a href="https://www.barrons.com/articles/the-dow-is-dropping-on-covid-19-fears-mallinckrodt-gets-a-lift-51585743424" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">Barron’s.</strong></a><strong style="font-weight: bold"> ‘An improvement</strong> in a set of&nbsp;<a href="https://www.marketwatch.com/?mod=article_inline" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">Chinese economic indicators helped lift global stocks</a>&nbsp;early Tuesday morning as investors look for signals the world’s second-biggest economy is recovering from<a href="https://www.barrons.com/articles/coronavirus-news-updates-u-s-deaths-could-hit-2-000-a-day-in-weeks-51585661852?mod=hp_ALERT&amp;mod=article_inline" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">&nbsp;the coronavirus</a>.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But the numbers</strong> aren’t as good as they look.’<strong style="font-weight: bold">&nbsp;</strong></li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><a href="https://ftalphaville.ft.com/2020/03/31/1585657722000/China-s-PMI-print-doesn-t-mean-much/" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;"><strong style="font-weight: bold">FT.</strong></a><strong style="font-weight: bold"> ‘After a terrible collapse</strong> in February to 35.7 — a record low — as the People’s Republic shut down to stop coronavirus, March’s manufacturing<strong style="font-weight: bold"> purchasing managers index (PMI) </strong>came in at what optically looks like a&nbsp;<a href="http://data.stats.gov.cn/english/swf.htm?m=turnto&amp;id=1" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">pretty positive 52</a>.’</p><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Charlie Robertson,</strong>&nbsp;Global Chief Economist of Renaissance Capital said this of the print:’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“This is probably</strong> the most embarrassing statistic for the West that China could possibly release. Not only did China stop the virus with just 3,309 deaths, they also appear to have done it with just a one month shutdown of the economy.”&nbsp;</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘The problem is,</strong> that’s not what the number suggests.’ [And as discussed elsewhere, neither is the number of China's COVID-19 deaths.]</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Let’s begin</strong> with how a PMI is actually calculated.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘An organisation,</strong> such as China’s National Bureau of Statistics or IHS Markit, goes around asking businesses about whether various data points – such as orders, supply chain times and production – have improved, stayed the same or deteriorated since the question was last asked.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Based on the aggregate</strong> of those responses, a figure for a monthly index is compiled. The crucial mark of this monthly index is 50, which separates an expansion or contraction in activity – with those above 50, marking an expansion.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘The key point here</strong> is not that PMI is not an absolute figure such as GDP, but an indication about the economy’s direction of travel.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Specifically,</strong> whether activity is improving or declining.’&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘Of course,</strong> we can infer that in a quarter where all the PMIs are way above 50, we are likely to see strong GDP growth.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘But the seesawing</strong> that we are seeing in China right now does not imply anything other than a very sharp contraction in output in the quarter.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘It’s worth remembering too</strong> that a reading of 52 after such a dismal month is hardly spectacular.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘It just means</strong> that activity for some fortunate firms is on the mend.'&nbsp;</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘As FT</strong> Alphaville’s close friend Frances Coppola explained&nbsp;<a href="https://twitter.com/Frances_Coppola/status/1244901334970781697?s=20" rel="nofollow" style="color: #001544;text-decoration: none;border-bottom: 1px solid #008dc8;">on Twitter</a>, think of it like the speed of a car.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘If you’re travelling</strong> at 100 miles per hour and brake to a pace of 70 miles per hour, that’s a huge relative drop.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Think of that</strong> like China’s PMI crashing to 35.7 in February from 50 in January.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘However, you then gently tap</strong> the accelerator and your speed increases by 2 miles per hour.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Now, that is faster relative</strong> to the slower speed you were just travelling at, but it’s nowhere near the speed-limit busting 100mph you were flying along at just a few moments ago.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘That’s effectively</strong> what this Chinese PMI print is saying.’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Things are better relative</strong> to last month, but last month was awful. So things are still not great.’</li><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">‘Which tallies</strong> with what we know about the Chinese economy, right? Factories, cinemas and restaurants have tentatively reopened, but the country is still nowhere near running at full tilt.’</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"><strong style="font-weight: bold">‘So let’s just call this PMI</strong> print what it is — what we should have expected. As China’s National Bureau of Statistics said:’</p><ul style="margin-top: 0px;margin-bottom: 0.5;"><li style="margin-top: 0.5em;margin-bottom: 0em;"><strong style="font-weight: bold">“...[the PMI reading] reflects</strong> that more than half of the surveyed enterprises have resumed work and resumed production, better than last month, but it does not mean that China's economic operation has returned to normal.”</li></ul><p style="display: block;margin-top: 0.5em;margin-bottom: 0.5em;margin-left: 0;margin-right: 0;font-size: 1em;font-weight: normal;letter-spacing: -0.1px;line-height: 1.5em;color: #001544;font-family: gorditamedium, sans-serif;"></p></td></tr><tr><td style="height:10px; font-size:0; border-bottom:10px solid #fff;">&nbsp;</td></tr></tbody></table></div></td></tr></tbody></table>