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We can hope that authorities succeed in containing the epidemic and treating its victims, but the performance to date has shaken confidence in the Chinese Communist Party at home and abroad. Complaints in Beijing about the U. The likeliest economic consequence of the coronavirus epidemic, forecasters expect, will be a short and sharp fall in Chinese economic growth rates during the first quarter, recovering as the disease fades.
Add the continuing public health worries to the threat of new trade wars, and supply-chain diversification begins to look prudent.
If there were a disease as deadly as Ebola and as fast-spreading as coronavirus, how should the U. What national and international systems need to be in place to minimize the chance of catastrophe on this scale? Epidemics also lead us to think about geopolitical and economic hypotheticals.
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Given the accumulated costs of decades of state-driven lending, massive malfeasance by local officials in cahoots with local banks, a towering property bubble, and vast industrial overcapacity, China is as ripe as a country can be for a massive economic correction. Even a small initial shock could lead to a massive bonfire of the vanities as all the false values, inflated expectations and misallocated assets implode.
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Many now fear the coronavirus will become a global pandemic. The consequences of a Chinese economic meltdown would travel with the same sweeping inexorability.
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Commodity prices around the world would slump, supply chains would break down, and few financial institutions anywhere could escape the knock-on consequences. Recovery in China and elsewhere could be slow, and the social and political effects could be dramatic.
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Some would expect a return of unipolarity if the only possible great-power rival to the U. Yet in the world of American politics, isolation rather than engagement might surge to the fore. If the China challenge fades, many Americans are likely to assume that the U. So far, the 21st century has been an age of black swans.
All Rights Reserved. Some would expect a return of unipolarity if the only possible great-power rival to the U. Yet in the world of American politics, isolation rather than engagement might surge to the fore. If the China challenge fades, many Americans are likely to assume that the U. So far, the 21st century has been an age of black swans. All Rights Reserved.
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Walter Russell Mead is the Ravenel B. He is also a member of Aspen Institute Italy and board member of Aspenia. Before joining Hudson, Mr. Kissinger Senior Fellow for U. Foreign Policy.
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Walter Russell Mead. Learn more about WSJ Opinion here.
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