Elizabeth Elliott: The Necessity for Reconciliation to Save the Global Economy

The relationship between China and the global economy is changing daily. Before spring break, I was examining how the novel coronavirus was affecting China’s position as the largest economy in the world. Now, headlines have shifted as the U.S. has more cases of the virus than any country in the world and it is becoming increasingly imperative that the U.S. and China work together to combat the virus and the collapse of the global economy. Trump and Chinese President Xi Jinping spoke on the phone about the virus this week – the first time they’ve communicated on the topic since early February. There has been significant animosity between the leaders as Trump has referred to the virus as a ‘Chinese virus.’ The Wall Street Jounral writes “as the global economy lurches toward recession, the world’s two largest economies are taking potshots at each other and ignoring chances for coordination” (Davis). China has shown that it is far more inclined to work with and support Covid-19 ridden Europe, as Xi Jinping has maintained open communication France, Italy, Spain and Germany, offering masks and other medical equipment to the countries. Although members of the Group of 20 large economies have pledged to spend $5 trillion to help the global economy, these efforts will fall short if the two largest economies in the world cannot reconcile and work together in pursuit of saving the economy and battling the virus. The global economy is currently speeding toward recession, and the effects of this are already easy to see in the U.S. Non-essential workers are filing for unemployment, pushing thousands of people into a market that does not have the capacity for hiring new employees. While economic peril seems to be the main headlines, hope continues to remain around the world, like in India, where the virus has given the nation an opportunity to boost its share of global trade. In South Africa, the central bank has announced measures to invest into local markets, making the stock index rise, to prevent economic peril in the country due to coronavirus. Different markets around the world are handling the situation differently, but one thing is for certain: the global economy is standing on the weak, contested relationship between the U.S. and China, and the leaders of these nations must find common ground in order to prevent an economic disaster that will likely be felt in every corner of the world.

 

Chavez, Nicole, et. al. “US has more known cases of coronavirus than any other country,” CNN Health, CNN, 27 March 2020, https://www.cnn.com/2020/03/26/health/coronavirus-thousand-deaths-thursday/index.html

 

Davis, Bob, and Wei, Lingling, “U.S., China Trade Blame for Coronavirus, Hampering Global Economy Rescue,” The Wall Street Journal, 27 March 2020, https://www.wsj.com/articles/u-s-china-trade-blame-for-coronavirus-hampering-global-economy-rescue-11585248616

 

Srivastava, Shruti, “Virus Outbreak Gives India Chance to Boost Share of Global Trade,” Bloomberg, 20 March 2020, https://www.bloomberg.com/news/articles/2020-03-20/virus-outbreak-gives-india-chance-to-boost-share-of-global-trade

 

Wessels, Vernon, and Goko, Colleen, “South African Markets Cheer as Central Bank Injects Liquidity,” Bloomberg, 20 March 2020, https://www.bloomberg.com/news/articles/2020-03-20/south-africa-steps-in-to-help-its-banks-to-keep-money-flowing

 

  1 comment for “Elizabeth Elliott: The Necessity for Reconciliation to Save the Global Economy

  1. Davion Zeno
    March 28, 2020 at 6:40 pm

    Hey Elizabeth,
    I believe that you made some great points and forced me to think about the situation regarding the Corona Virus in a plethora of viewpoints. Countries have been enacting shutdowns and isolating when there can be a lot done to combat the pandemic if these countries worked in collaboration. China and the United States undoubtedly exist as world leaders and have not been leading the world in effectively combating issues. The social climate seems very depressing so I have not considered what countries could walk away from this better but to see the increase in investing in local markets. I believe that is important to look for positives in a difficult situation. I also believe the stimulus packages that countries are implementing may not have the effects that we want them to. I believe it is just appetizers to fulfill the economy for the moment but what will happens if the pandemic outlasts the financial resources given. Only time can tell.

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