COVID-19: Implications for Chinese Investment and Economic Influence

5.06.20

How is Covid-19 affecting China's ability to use the economic levers of statecraft in its foreign policy?

This is a question UNSW Canberra Academic Dr Pichamon Yeophantong discussed at a recent Australian Institute of International Affairs webinar.

With China also seeming to be starting to recover economically from the pandemic at a faster rate does this mean recovery will foster greater economic dependence on China?

“I’ve been wondering about this myself as well, which is that there is that lag time and if China gets a head start does that mean they’re in a better position?” Dr Yeophantong said.

“I think when it comes to economic activity, you really do need more than just one actor. So even if China goes around trying to finance infrastructure projects and so forth, if the local government doesn’t have the capacity to shoulder such a project then that adds a very real limitation on China’s ability to engage in such economic activity.

“So even if China does have a head start, I think if anything, that is probably a good thing for the rest of the world, at this stage, that there is at least one economic power that is not completely constrained by COVID-19 and its effects,” she said.

Dr Yeophantong said that despite the possible positives of China having a head start on economic recovery, it could possibly create greater relationships of asymmetry.

For more on this topic and to watch the full webinar, check out the video below.

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