Facing withering economies, US, China must unite

By Wen Sheng Source:Global Times Published: 2020/3/1 22:03:40

Illustration: Luo Xuan/GT

As China has seen a light at the end of tunnel following 40 days of arduous and painful efforts to contain a sudden assault of the novel coronavirus, the US now remains in a state of tardy preparedness. The Trump administration is still accusing the American media of exaggerating the threat of the deadly disease and purposely helping the Democrats to defeat him in this year's presidential election. 

The US needs to take immediate action by ratcheting up its alert, replenishing medical supplies, expanding hospital wards, and quarantining all the suspected cases. The world cannot afford to see another major economy kneel down to a pandemic. 

The decimating impact of the virus has been seen in China as the nation has basically hunkered down to avert its onslaught, and the country's economy was clobbered. China's February purchasing managers index of manufacturing, a gauge of economic activity, nosedived to 35.7, which is a record low. The services sector pummeled too, as eateries, entertainment, sightseeing and retailing withered. 

Facing such a merciless killer virus, the US should not take a chance betting it won't encroach on its land and devastate its people and its economy. Considering the fatality rate of COVID-19 is much higher than the seasonal influenza, an outbreak in the US on a magnitude of Iran, Italy, South Korea or China will take a very brutal toll, wreaking havoc on the world's largest economy. 

If the two predominant economic engines fizzle out or categorically break down, a worldwide economic contraction or even depression will emerge, which is the last thing this world wants to see. Last week, the US stock market did send a strong and clear-cut warning to the country's regulators and policy-makers that they must hasten and act. 

Panicking over the coronavirus eruption among investors caused a stampede of selloffs on Wall Street, which saw the Dow Jones Industrial Average fall 12.5 percent in a single week, capping off its worst month ever since the 2008-09 Great Recession. Investors spoke of a feeling of mounting apprehension throughout the week as prices of stocks across the board tumbled at a breathtaking pace. 

Provided the US government continues to drag its feet and deny the danger of the virus, American equities trade will brace for more volatility and turbulence in the coming weeks. 

The fallout of the coronavirus in China serves as a wake-up call for the US. In late January and February, economic activity was forced to a standstill as more than 90 percent of China's population was confined to their homes. As a result, the cities became empty, stopping the business of restaurants, hotels, theaters, tourism agencies, airlines and long-distance train and bus services. The manufacturing industry is severely short of workers, and the technology and drug-making companies face rising supply disruptions. 

China is likely to pose a ghastly weak GDP growth rate of 4 percent for the first three months this year. The US, increasingly clouded by the spread of coronavirus, will not fare any better and may report a growth of 1.3 percent for the first quarter. And the numbers are both optimistic predictions. 

Facing the dire outlook of a global recession, the world's two largest economies ought to join hands in overcoming their animosities, repair soured relations and align in a good-willed cooperation to fight the new coronavirus, which is ravaging humankind. 

It's time for the two countries' scientists to unite forces and develop a vaccine at the earliest possible date. China's fresh and useful experience in containing the disease could also be learned by the US and other countries in assisting their campaign against the epidemic. 

And, to help the world avert an economic swooning in the aftermath of the virus attack, the leaders of China and the US ought to have a candid and faithful chat to remove all the punitive tariffs imposed on each other's trade in 2018 and 2019, and put the unpleasant chapter of the trade war behind them. 

The author is an editor with the Global Times. bizopinion@globaltimes.com.cn


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