China’s dizzying reality: Biggest bills from Covid-19 are yet to come

Thursday April 30 2020



The world is settling down in uncomfortable posture. Record numbers have been set, a million infections in the US and five million worldwide.
More people have died of the Covid-19 than the official counts from Vietnam that shocked the conscience of the West.

America lacked the appetite for another ground war that exists to this day. Vietnam produced two politicians of great
consequence whose eloquence earned them enemies inside the American establishment Senator John F. Kerry, who became a presidential candidate and Secretary of State.
Senator Kerry, injured in the war, was “swift boated” in 2004 over allegations that he was not a bona fide war hero – unfair, I must say. Senator John McCain, a third generation Navy sailor who spent years in confinement as a prisoner of war, returned to the US and was elected first to the House of Representatives before winning promotion to the Senate.

These two individuals walked everywhere with universal name recognition but the American political system denied them the ultimate accolade: President. This is a big reminder that the system would always have imperfect persons at
the top, capable of human error.
China, on the other hand, for about 30 years, has been operating on something close; a strong centralised leadership but one with a clear transition from one leader or generation of leaders to another.

Liu Yandong retired from CCPC in 2017 as one of the first two women to serve on the Standing Committee. Sun Chunlan is now the only member of CCPC. She is just 67 – 67 is 45 in Chinese years. This is a big achievement.
But along the way, the delicate Chinese political system retired several leaders at ago, and Xi Jinping added a few accolades to his shoulder becoming a supreme leader, military commander and secretary general of the Communist party.
This change has come at a time of a major rise in Chinese hegemony. Eighty per cent of the world is in some major business with China. The Chinese are major lenders of first resort, second to last resort.
China is a major player in the market for conventional arms plugged into other deals. It has signature achievements in infrastructure, telecom and energy.
Coronavirus has tested Chinese diplomacy. First, some of China’s competitors feel this event may not be handled in the framework of conventional diplomacy. The UK has filed a notice of claim of $360b.
Australia, a close UK ally, is also tagging along a move that has annoyed the Chinese who are a major player in Australia’s economy; minerals, higher education and real estate. Australia is just 30 million people in the shadow of the Chinese.

China is coming to terms that Wuhan may not just go away. China has put out some information to the effect that most resident staff (the scientists) survived are alive and well. This narrative is competing with an alternative one claiming obliteration of people in Wuhan. Neither of these narratives is conclusive.
China now has a dizzying pile of note obligations waiting to test force majeure clauses, takeover provisions, especially if borrower nations start failing to meet their escrow obligations.
It is urgent that China figures out that China II may be ending and a Chinese III with heavily discounted values is rising itself. Wary borrowers are also peeping leery across the wall curious about their rising bills.

Mr Ssemogerere is an Attorney-At-Law and an Advocate.