The CCP Coronavirus could be a “Regime Ender”
for the Chinese Communist Party.
Find Out How Economic Turmoil
Might bring down the regime
Welcome back to China Uncensored.
I’m Chris Chappell.
The deadly coronavirus outbreak.
I’m calling it the “CCP coronavirus”,
or just “CCP Virus” for short—
since the Chinese Communist Party is to blame
for letting it spread in the first place.
Of course, nowhere has the CCP Virus had
a more devastating impact than inside China.
And the Chinese Communist Party is concerned—
not so much about all the people that have died from it,
but about the economic downturn it’s led to.
It could be a fatal blow to their rule.
I sat down over Skype—
you know, because of the quarantine—
with China expert Gordon Chang to discuss
what might be next for the Chinese Communist Party.
Thanks for joining me today.
Thank you so much, Chris.
Yeah, how's a life under the Coronavirus?
I see you're holed up at home?
We're under a mandatory lockdown in New Jersey,
and we're surviving fine.
Ah, glad to hear that.
Well, so Gordon, the Coronavirus basically
shut down the Chinese economy for two months.
What impact do you think that had?
I'm sure that the first quarter is going to be
negative gross domestic product growth.
I'm sure China is going to report something positive.
But nonetheless, when you start to look at the underlying numbers,
it shows an economy deep in the red.
So for instance, oil demand was down 20% year on year.
The exports for the combined January/February period, down 17.2%.
Imports, a crucial measure of domestic demand, down 4.0%.
The purchasing managers indices for February
were historically negative,
both for manufacturing, but especially for services.
So March, there might be a recovery of some sort.
But even so, Chris, you have for instance only about an average
of maybe 70% of the workers back at the job sites.
So March probably is negative as well.
So, the first quarter is, I think,
a really big hole for China.
Well, I know China has a history of lying about its GDP numbers.
So these are some of the things we can look at to get
a better sense of how the Chinese economy is actually doing.
And, now I know China has required people to go back to work.
Is trying to get the economy going again.
Do you think that will work ?
Well, I'm sure that they will have some sort of recovery
in this month, March,
and we're going to see it continue through April.
But we've got to remember the issue here is that the virus
has not completely subsided in China.
There are many unreported cases from all that we can tell,
which means that as workers get back to the job site,
there's going to be re-infections.
And there's evidence of that in Dongguan,
which is the industrial heart of Guangdong Province.
When workers came back to their factory sites,
they were actually infecting each other,
so they had to go into quarantine
or into hospital as the case may be.
So, this is going to be a much slower process than Beijing
has been trying to show to the rest of the world.
Beijing wants to say, oh, China's back.
Well, it's sort of back,
but it's going to take a long time, Chris.
So what will happen if there is a second wave
of the Coronavirus in China?
Well, I think you're going to see
something like we witnessed in January and February.
It may not be as bad, but we're already starting to see,
the wave of re-infections.
Beijing's numbers for the last five or six days
show almost all the cases are, as they say,
imported.
There's only been one case of local transmission
in the last week or so.
And that case came from somebody who was imported.
But that's pretty unlikely,
because we're getting indications from Wuhan,
which is the epicenter,
that there are dozens of infections there.
And also, even in Beijing there were clusters,
which I think the government and the party
have been trying to hide.
So, this is going to be a really difficult process for China,
because they're going to have to deal with
two things at the same time.
They're going to have to deal with getting people back to work,
but they're also going to have to deal with
the virus spreading fast again.
And we know that there's a second wave of infections in Asia.
It's Taiwan, it's Hong Kong, it's to a lesser extent Singapore,
and we're going to see it in China as well.
What impact will this have on the rule
of the Chinese communist party?
I think long term, this is maybe a regime ender for the party.
We saw, for instance, in February
at the death of one of the Wuhan eight,
the eight doctors who were whistleblowers,
that created a wave of white hot anger
across social media platforms.
People were demanding fundamental political reform.
Since that time,
we have seen people in Wuhan go to their balconies,
and even disrupt a inspection tour by a vice premier.
They've been now singing,
Do You Hear The People Sing?,
that politically impactful song from Les Miserables,
which by the way is what people in Hong Kong
adopted as their anthem in protest of China.
So, it's very clear what's going on.
People in China are talking about Chernobyl.
So, I think this is going to really create a period of friction,
and especially after the virus subsides,
people are going to engage in recriminations.
They're going to start complaining.
And remember,
this is the revolutionary season in China.
It's spring.
What impact will this have on the global economy?
A lot of Western countries and businesses
are still heavily invested in China.
Yeah.
One of the things that's really bad news for China
is that it's traditional export markets have been hit heavily.
So for instance, the U.S. Large portions of the U.S. are in lockdown.
The economy is in standstill in many places.
U.S. economy is going to have a horrible first quarter.
We're going to be negative.
And that's also true, of course,
in Europe,
another big export destination for China.
You have Italy, Spain, now France, Germany.
These are places that are also coming to a halt.
So it's going to be hard for China to dig itself out
with an export dominated economy.
And that means that for China it's going to be hard.
But, of course, that means everywhere around the world
with some exceptions, I think,
are going to show some effect of a downturn.
And that means we're going to see that global recession
that people talk about.
And Chris, people in our country
are talking about Great Depression Two.
And although I don't know if that's really going to be the case,
nonetheless, more and more people have been talking about that.
Well I know a lot of Americans are invested in China
without necessarily even knowing it,
like with pension funds.
What can Americans do to avoid the China market?
Well, there's one American who can do everything.
President Trump can use his emergency powers to get,
for instance the federal pension funds,
to get their money out of China
and he can actually get other institutions
out of China as well.
And I think we really need to do that,
because this is just outrageous.
A number of these Chinese companies
are on the Commerce Department's entity list,
which means Americans can't contract with them
without getting prior approval from Commerce.
Yet, we can all invest in these Chinese companies,
which have been deemed threats
to the U.S. National security interests.
This makes no sense whatsoever,
and I think that we are going to have a pulling apart of
the U.S. and China in the financial markets,
and it won't happen too soon.
Well, thanks so much for joining me today, Gordon.
Thanks, Chris.
And for those of you watching,
be sure to check out America Uncovered
where we'll have a followup episode with Gordon
about South Korea and North Korea's changing relationships.
Check it out.