Covid-19 - China strangles the world

Developed countries complain about job losses, but have social policies that protect the unemployed, while third world people, living below the poverty line, desperately need jobs. It is true that systemic unemployment, resulting from automation and artificial intelligence, grows exponentially, but it demands large capital and has to compete with cheap labor from underdeveloped countries, allowing a reduction in the pace of robotization and unemployment.

Globalization is democratizing and equalizing, it distributes wealth everywhere, it raises people from extreme poverty. Globalization - understood as the free worldwide movement of people, goods, services and capital - is an ideal to be pursued for the prosperity of Man and the good of Humanity.

The Covid-19 pandemic, however, is demonstrating that such an ideal needs supranational planning and regulation, in order to avoid the monopolization of the production of certain goods, of vital need to all countries, by nations that have some intrinsic competitive advantage, such as the immensity of China's population, which makes it the largest domestic market, whose service demands and causes industrial production on an extremely high scale.

The European unified market is about a third, the North American a quarter and the Brazilian only fifteen percent of the Chinese. The first two have long been in the class of economically developed people, therefore with little leverage for growth, because the basic needs of their people are already largely satisfied. Brazil is a strong candidate for rapid development because it has many people in need of basic needs such as sanitary sewage. On the other hand, more than five hundred million Chinese are at the lower and lower middle class level, which means almost two populations of the United States as a market eager to consume and grow.

In addition, the Chinese people have been subjected - and accustomed to obeying - to dictatorial governments for thousands of years, are extremely hardworking and highly literate, offering laborious, disciplined, educated and cheap labor, everything that the industry needs, along with management, technology and capital to develop very quickly.

European and American industrialists and workers prospered and enriched in the post-war period and became fat cats and all they want is to be asleep on the sofa. It is no wonder that Europe and North America attracted millions of immigrants to take up their menial jobs and went through the third world in search of laborious, disciplined, educated and cheap labor.

When Mao Tse-Tung ascended the Marxist pantheon, he opened the way for Deng Xiaoping to carry out the “second revolution”, a mixed policy of nationalizing a few sectors considered strategic and freeing the rest for entrepreneurship and capital, both Chinese and foreign. From 1978, China started a “great march” towards prosperity that, in four decades, transformed it into the largest exporter of industrial goods on the planet, to the point that it is now almost the sole supplier of some products and threatens to monopolize, for example, the fifth generation of mobile internet.

At this moment of great affliction caused by the coronavirus, the World, in a long Indian line, begs the Chinese industrialists for pulmonary ventilators essential to the treatment of severe cases of pneumonia caused by Covid-19.

Donald Trump, considered by many as a crude unsympathetic, with his vision of a businessman accustomed to the clashes of interests in millionaire negotiations, has enough acuity to perceive the mess his country was taken by political immediacy and lack of long-term strategic vision. Trump knows that, in addition to the competitive advantages inherent in Chinese work culture, China undervalues ​​its currency, the yuan, making its production extremely attractive compared to the rest of the world.

The "America first" campaign aims to return to the United States jobs that have been taken to other nations and prevent technologies of general application, such as the G5, from escaping American control.

The fact that the rest of the world is dependent on China for equipment and supplies for medical treatment, even the simplest ones, such as surgical masks, in this Covid-19 crisis, leads us to reflect on the future of globalized trade and regarding arrangements to diversify sources of supply.

China has long invested heavily in infrastructure and encourages food production in Africa to become less dependent on its two largest protein suppliers: United States and Brazil.

This example must be emulated by other countries that, like Brazil, whose industry loses successive clashes with China, not only due to its smaller scale of production, but also due to exchange rate disadvantage. This, however, can lead to successive market closures through bureaucratic, sanitary, currency devaluation and fiscal barriers, with retrocession of globalization, which has contributed so much to the spread of wealth around the world, benefiting extremely poor nations, like Bangladesh, although, as we see now, mainly China.

The UN or WTO should study this issue and propose an international trade policy that, at the same time, promote free movement of people, goods, services and capital, and avoid the concentration of benefits and monopolies in just one country or region.

The world needs alternative sources, second suppliers, to gain independence from Chinese strangulation.

PLEASE COMMENT.