The Wuhan coronavirus has interrupted life to an unavoidable extent around the world. In the nation’s capital, the president and policymakers are making decisions that will have global implications for months to come.
In the midst of the growing COVID-19 pandemic, what’s next? Hudson’s experts continue their analysis unabated (albeit remotely) and are exploring the impact of the virus, from Tom Duesterberg’s analysis of the oil and gas sector’s future, to a collection of essays featuring Patrick Cronin on changing trends in China and North Korea, Peter Rough on the challenges ahead for the EU, and Mike Doran on how the coronavirus is shaping Israeli politics.
Below, find some highlights from Hudson’s ongoing coverage of the pandemic.
Dr. Patrick Cronin, Hudson’s Asia-Pacific Security Chair, predicts five major trends that’ll play out in the coming months and years as the world recovers from the pandemic.
1. Beijing will push harder to exploit free-market vulnerabilities.
As China recovers, the CCP will look for short-term stimulus to deal with a brittle public health system and aging population. The resulting demands for sustained Chinese growth will ensure that Beijing’s variant of state capitalism will further exploit free-market vulnerabilities through state-backed IP theft, subsidized national champions, and other means. China may take advantage of a distracted US to back-pedal on its agreement to purchase up to $200 billion in additional American goods, including LNG, over the next two years.
2. Techno-nationalism will increase throughout China and the world.
The virus will hasten competition for setting international technology standards and rules. In responding to the Wuhan crisis, the CCP leveraged Big Data, Artificial Intelligence, facial recognition technology, and drones. The positive results will only further accelerate Beijing's plans to advance the surveillance state. The US and other countries will accelerate plans to disentangle critical technologies and reduce strategic dependencies on China.
3. US businesses will face the “Microsoft Problem.”
One challenge might be called the "Microsoft problem." That is, how can a large US company cut itself off from Huawei, ZTE, and other Chinese national champions without reducing its market share and thereby starving itself of necessary R&D for future innovation?
4. North Korea’s Kim dynasty could be thrown into chaos.
A full-blown health crisis in North Korea could produce unpredictable outcomes for the hereditary Kim dynasty. Just as North Korea’s Sixth Army Corps reportedly mutinied amid the 1996 famine, an overwhelmed public health system could trigger a coup or, even worse, propel Kim Jong Un into initiating a conflict to unify the population behind him.
5. The threat of weaponized synthetic biology will multiply.
While the coronavirus most likely started in an illegal wet market and not a biology lab, the demonstrated impact of a dangerous new virus could encourage CCP authorities to set in motion new plans to weaponize synthetic biology. A range of future biothreats may emerge from clandestine laboratories through the use of CRISPR, DNA printing, and other synthetic biology advances.
Beyond the human toll of the pandemic, Hudson Senior Fellow Peter Rough looks at how the Wuhan coronavirus threatens the fundamental beliefs underlying the EU.
The central problem of the European Union today is that the primary allegiance of its people is to their home countries, not the EU. To overcome this shortfall, the EU essentially buys support for its agenda: In return for the free movement of people, EU members receive unfettered access to the European single market.
Into the breach steps now the coronavirus. It is wreaking havoc on an already brittle and unequal European economy while highlighting the downsides to globalization, like the accelerated transmission of disease. This will further embolden nationalist parties, especially as leaders grasp for national, rather than European, solutions.
The coronavirus may also accelerate a shift in the global political economy. In decades past, the US acted as the importer of last resort, absorbing huge European surpluses. Over time, this has created a European dependency on exports to America.
Now, Europe is equally addicted to China. If the coronavirus substantially slows global markets or leads to a Sino-American standoff, the export economies of Europe (especially, Germany) will be hit hard. The coronavirus may very well signal the beginning of the end of Europe’s export-led economic model.
As the economies of Europe suffer and the downsides of globalization become apparent, anti-establishment leaders will have an opportunity to seize the advantage. This is the setting in Europe as we barrel toward the high-point of the coronavirus pandemic.
WATCH: All the Power, All the Blame: Xi Jinping’s Risky Centralization Bet — COVID-19’s massive toll in China reveals a new risk for Xi Jinping, notes Hudson Senior Fellow John Lee for Bloomberg Daybreak. With all governmental authority centralized, members of the party are questioning Xi’s governance during the coronavirus crisis.
READ: Assessing the Coronavirus Risk from Kathmandu — From Nepal and Manilla, Hudson fellow and Portugal’s former Minister of European Affairs Bruno Maçães how different cultures are responding to the common threat of the coronavirus via his recent travels through Asia.