Guest Post by Kissinger Oryem: – Yes, it is a global world and one village. Few weeks into this pandemic, I could hear the US president calling it China Virus and that is a reference deeper than the words coming out of his mouth.
When Dr. Charles Lieber was arrested on allegations of manufacturing and selling virus to China, we shall question how much intellectual properties of such nature was dug out by China I’d in 2018, alone 368,073 Chinese went to USA on student VISA to various colleges and universities. 1,301 went to Harvard University.
Chinese approach to education and studying in foreign country was a more aggressive approach especially when the west was consumed with cold war. During that time too, they ventured into Africa with more options than the capitalist West. Everything in Africa became “Chinanized” from plates plated, plastic shoes, phones, touch etc. Phones with very many lines and also with multiple use became a household items and every African took it as a privilege and a huge kindness by Chinese. “If you want Chinese to make for you another Jesus, just give them the sample and they will produce in all quality and quantity”.
Through a historic observation, while China empire remained intact, Europe, Africa separated into nations and ethnic lines. The latest divisionism can be illustrated by the Brexit quest by Britain. While Napoleon was for a quest to conquer the world over, he noticed China had remained intact in her dynastic rule, language and traditional leadership kept China United. When he captured Belgium which was the most industrialized country in continental Europe, Napoleon began to understand the needs of resources (Coal and Iron) to fuel industries this is something big empire like China had no problem with and that means, the emperor would decide in future to adopt industrialization or revolution and China would advance faster than European countries. This is what made the man with a dream to rule the world called China a sleeping giant.
Through the Ming Dynasty of the 1800s and the Qing Dynasty, China was not so powerful to counter foreign influence but they kept their culture and instilled the spirits of hard work in everyone. It is of no doubt that today in 2020 China has miraculously gain from Maosim to challenge the world strongest economic power. Of the largest 500 companies in the world today, 129 has its headquarter in China. Today China has the world largest foreign reserves worth $3.1Trilion.
It should be noted that, Dean George Q Deley of Harvard University of Medical School announced plan to collaborate with Guangzhou institute of respiratory health and pulmonologist and epidemiologist Zhong Nanshan, the expert who was heading Chinese 2019n-Cov taskforce. So, if all this plans were underway and Dr. Charles Lieber took the collaboration to personal level to manufacture and sell virus to China as alleged, how was this working to the benefit of china the world second largest economy?
World economic forum is already predicting the US economy would take three years to recover from Covid-19, this was through a research report by McKinsey and company. Commercial aerospace, travels and insurance, automotive industries among others were disrupted. Manufacturing plants reducing capacity as other shutdown have all created huge unemployment that shall only be felt when lockdown is uplifted.
As the economy seems to slip between hands of the “most powerful nations”, energy sectors OPEC and major oil producers failed to agree on additional cut of 1.5 million barrels per day. Saudi Arabia had to cut price and lifted output to harm Russia who didn’t want to agree to production cut and Brent crude fell by more than 20% the sharpest since 1991.
The Saudi- Russia price war is sending unsettled signal to market and we shall have not to forget the role of Saudi Arabia as G20 President. In response to price shock, large oil producers including US firms could pare back investment and production with heavily indebted forms layoffs, consolidations and even bankruptcy. Remember energy company account for 11% of US high yield market.
Whereas it was a common “believe” that capitalist fight their war in another country or cause chaos through support to rebel groups and join to support them with intentions of extracting raw materials, the common discussions today is, the communist ideology and the Maoism left the Chinese more aggressive and unpredictable.
It is the reason the majority of people on social media refer to the Pandemic as “world War three” and that it is an economic war that shall make the capitalist have a chill bum once the lockdown is uplifted since China seems more prepared and have huge economic strength to take off immediately after the virus comes to pass.
In this “economic war”, Africa is the orphan who is enjoying the love of the Foster family. Whereas Africa through her leadership opted for capitalism and rushed to liberalized her economy, North Korea has a different believe and still think that, if African were to stand by their culture and traditions, she would be great. This same believe could be what killed Gaddafi, for his dream was a United Africa with one currency and huge gold reserve.
I keep on imagining with all the resources and also the confusion in Africa, what Napoleon would call Africans! ” The empty headed giant who shall never wake up”! It is only in Africa that a person who can’t afford to pay fees of £50 have 10,000 Hectors of land. This is a unique kind of poverty and it can only be experienced in Africa.
So as the world battle Covid-19 with its vaccine “to be tested” in Africa the only powerful thing we have done was closing our borders.
Whereas we are suffering, it would also have been the most ideal moment to reflect what kind of romance we would still want to have with capitalist who are learning their lessons from communist, or what kind of relationship we shall have with ambitious communist.
The UN warn of a complete collapse of economy and livelihood of most African countries since most of them imposed lockdown, curfew, travels restrictions among others as measures to ensure the Pandemic is prevented. One thing for sure is, UN forgot that the shutdown was timely and according to Africa center for disease control and prevention out of 8000 cases there was 334 deaths and 702 recovered. This is the good side of the story UN is forgetting.
It is true Africa labour market is driven by import and export, and 50% of all projected growth jobs in Africa will be lost e.g. aviation (Uganda airlines inclusive), service industries, exports, mining, Agriculture and information sector.
Nigeria and Angola who are oil exporting nations have already lost up to £52bn in revenue as price tumble. UN also predicts sub Saharan Africa as at risk because of many heavy indebtedness as majority struggles to implement their national budget and they do under huge stress. This argument can be backed by the fact that Ethiopian Prime Minister is already seeking £120bn from G20 Nations. By the 25th March 2020 IMF had received request for emergency financing from over 20 African countries but speculations for more facing the virus related economic disruption is expected.
The closure of “world factory” China is hurting the global economy but mostly Africa given the resent courtship seeing the Afrosion projects all over. But could China bail out Africa after the virus given that most multibillion projects are being sponsored by China like Roads, dams, market constructions, building bridges etc? With about 20% of all global trade in manufacturing originates from China, yet it was only 4% twenty years ago tells you the beast we are talking about.
In 2019, China topped the list of plan investments in Uganda according to Uganda investment authority. 45% were capital infrastructure project and manufacturing. this means China has a huge foreign direct investment to the economy of Uganda and also her economic performance is influenced by her major trading partner China. China for example the major market for Uganda coffee. small scale and medium enterprises in Uganda are mainly trading in China and this contributes to 13% of Uganda economy. Almost 20% of goods trade in this sector are imported from China e.g. textiles and apparels, electronics, building and construction materials, pharmaceuticals, heavy machinery, raw materials, iron and steel and households consumer goods.
all this gives hope to both Uganda and China that their new found romance could still be going on for a long while…
with a contribution of 7.7% to the country’s GDP and employing more than 700,000 people, the young tourism sector of Uganda has been severely hit by the lockdown and social distance as a minimum measure to cube the virus. Travels and hospitably industry in Uganda i.e. hotels, travels and your agencies, bars, restaurants, international conference and summits e.g 3rd UN G77 and China summit were postponing indefinitely. over 6,000 international delegates from 135 counties were expected.
Uganda’s 42% of all tax collections come from international trade in terms of VAT, import duty, import and excise duty or importation if petroleum products. couple with reduced economic activities in the retail and trading, service, hotel, tourism and manufacturing sector there shall be reduced remittance and corporation tax payment to URA and as manufacturing industries scale down production as a way not to risk running out of raw materials, these decisions will affect all the key stakeholders like banks, suppliers, creditors, staff, customers etc. joblessness, loss
of business due to default of loans payments, rent and no supplies is what is facing businesses in Uganda.
whereas Bank of Uganda came up with 7 key measures seeking to make the cost of money for business community and commercial banks low, there are chances some businesses shall never open when the government uplift the lockdown. However, the UgaSino relationship still can be the spring board of Uganda’s economy given the importance of Uganda to Humanization of Africa.
The Capitalist west have for a while ignored threats by Head of States in Africa saying the shall withdraw from ICC. By the time a wife stands in the middle of the compound to tell you off, there is a possibility you are not worthy better still a real man has already been found. All in all, the economy of African countries shall be dearly supported by China as the west nurse the misery of the aftermath of the virus. China’s Economy seems intact and they will buy all the collapsing companies in the west or companies the west established in China to ease cost of productions.
China will be the new world economic champion when lockdown is uplifted.