New York - China’s lack of transparency during the coronavirus outbreak will change the way American investors do business with it, according to an economics and financial advisor. Since the beginning of the COVID-19 outbreak, mainland China has suppressed information about the virus.
It has also started a propaganda narrative claiming that the virus originated in the United States. But as the virus spreads, the pandemic facing the world could lead to a shift in U.S.-China trade.
“If they don’t show the world that they’re under control, if they’re not more transparent, to the public, to the world, [and] keep hiding their little things, people lose trust,” said President and CEO of Blackhawk Partners Zaid Abdelnour in an interview. “Smart money wants transparency, wants openness.” He added that the outbreak has exposed how heavily the United States relies on China.
For example, the United States ran into a shortage of face masks when China stopped producing them. Medication is another example. Rosemary Gibson from the Hastings Center Research Institute testified before a Senate committee on March 12 on the potential risks to national security posed by current dynamics in two-way trade.
Her testimony states that “90 percent of the chemical ingredients for generics in the U.S. to care for people with serious coronavirus infections and [those that] are hospitalized are sourced from China.”
She said that drugs like sedatives, antibiotics, and others fall into this list. But Abdelnour said the outbreak is helping people wake up to this reliance, adding that the “U.S.-China relationship is changing already, and it’s going to change even further.”
Gibson added that heavy dependance on another country for medicine is a national security risk because it can be weaponised. She cited a threat that Xinhua, a Chinese state-owned media, published this month: “If China retaliates against the U.S. at this time, in addition to announcing a travel ban on the United States, it will also announce strategic control over medical products and ban exports to the United States.
“If China announces that its drugs are for domestic use and bans exports, the United States will fall into the hell of a new coronavirus epidemic,” it said.
In late-December 2019, US and China came to a Phase 1 deal where the Chinese agreed to buy $200 billion American products and services.
$50 billion will be used to solely purchase agricultural products. Lawmakers are hopeful for a Phase 2 deal, but the COVID-19 outbreak is making this more difficult.