If China Catches Cold the Whole World Catches a Fever
Be careful what you wish for. That is my advice for anyone hoping that the current protests in China will lead to some sort of popular revolt, that overthrows the established order. We have seen with conflict elsewhere, that a cornered regime may lash out against its own people, or start a war to distract from problems at home. As we have seen in Iran, popular rebellions often lead to death and injury of innocent protestors and their families, rather than the reforms one might wish to see.
When Prime Minister Harold Macmillan was asked, what was the greatest challenge for a statesman, he famously replied:
“Events, dear boy, events.”
In these days of a global economy, any problems in China will rapidly create economic headwinds for all of us. Long supply lines connect a huge proportion of Western consumer goods to the Far East. The practice of “just in time” deliveries makes companies less resilient to any disruption. One of the reasons that China appears to have some of the highest national greenhouse gas emissions, is that much of the West has “off-shored” our production there, due to cheaper labour costs. We have just exported our emissions.
Already Apple are reported to be losing millions of pounds daily due to lockdowns affecting their production in China. If revolt in China spreads and grows, it could freeze the whole global economy, and make already rampant inflation many times worse. We may think we are in control, but that is illusory. The global economy is delicately balanced at the moment, with many nations just recovering from Covid, and impacted by higher energy costs arising from the war in Ukraine, which has also led to rampant inflation in some food pricing. Forecasts for some nations, such as benighted Brexit Britain, predict a couple of years of recession followed by a return to growth. However that may be wildly optimistic if there is a third crisis.
At the moment the only thing that is predictable is unpredictability. Five years ago, who would have dreamt that we would have a global pandemic with millions of deaths, followed by the return of war in Europe after 70 years of peace?
So to those tempted to stir the pot of unrest in China, tread carefully, and be very careful what you wish for.