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Corona: A pandemic or a well-planned strategy?

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Ajeet Panigrahi
Ajeet Panigrahi
Analyst, Engineer, NITian, MovieHolic & Reviewer, Political Observer, Foodie

The year 2018 and 2019 saw the confrontation of US and China in terms of trade. US kept increasing tariffs on Chinese imports and in retaliation China also did the same. However, China being an export oriented economy, was heavily impacted. The GDP Growth rate of People’s Republic of China started to show the slump with no major effect on US. The growth rate of China went down from 7% to 6% in 10 quarters whereas the growth of US only went down from 2.2% to 2.1% in the same duration. Further when we compare the export of Chinese goods to US, we can see a slum from $ 539.6 Billion in the year 2018 to $ 452.2 Billion (Source). In terms of GDP the drop was equivalent to approx. 1% of China’s GDP. These indications were major and China could not have neglected them as there was no equivalent increase in other markets either. For instance, there was a meager increase in export to EU as EU itself was under stress due to ongoing Brexit. Further with OBOR as a distant dream and CPEC under back foot due to mismanagement of funds by Pakistan, China had to do something on its economic front.

Coronavirus (COVID19) the now turned pandemic has its roots in the Wuhan district of China. Its first official confirmation was done on 31 Dec 2019 as a case of pneumonia. In China it was Dr Li Wenliang of Wuhan District Hospital who reported it for the first time and had termed it as a deadly virus and can be transmitted from human to human. But the Chinese authorities dismissed his comments and accused him of making false statements. Later on 30th Jan the doctor himself was diagnosed with Covid19. An outrage broke out following his death on Chinese social platform Weibo which was later censored by the communist government. Following the developments, many countries put travel restrictions on China during first week of Feb 2020 which China protested. Also China accused US of causing panic and spreading fear.

On 11 March 2020, after it contracted more than 1,18,000 across 115 countries and 4000 deaths, WHO declared it a pandemic. Global infection across the world has now crossed 7 Lacs with more than 33000 deaths across 160 countries. In China alone there are more than 81,000 cases. However, one point that is to be noted is the demography wise breakup of the spread. In China, most of the spread is within the Hubei province, which is almost 84% of total cases. Further when one adds up the number of cases in business hubs of China, i.e. Beijing, Shenzhen & Shanghai, they only account for 2.6% of the total cases. In US, the number of cases are much higher and have crossed 1,30,000 now. New York alone accounts for 45% of the cases. Further the top business hubs of Unites States viz. Washington, California, New Jersey & New York account for 63% of the total cases. In Indian too the cases have gone above 1000 with Delhi, Maharashtra and Gujarat alone accounting for 29% of the total cases. In Europe too most of the cases are from Italy, Germany, France & UK. One can conclude that Covid crisis has affected most of the business hubs across the world except for China.

Further, The Global stock markets are under stress. On an average all the global markets have gone down by 25% in last three months. NASDAQ has gone from its level of 9400 in 21 Jan 2020 when its first case was discovered to 7500 on 27 March 2020, a drop of approx. 20% in just 2 months. Even the Australian Market index, S&P/ASX 200, has gone down from 7,090 on 24 Jan 2020 when its first case was detected to 4,842 on 27 March 2020, taking a beating of 32% approx. German market Index DAX has gone down from the levels of 13,577 on 26 Jan 2020 when its first covid case was identifies to 9,632 on 27 march 2020, taking a beating by 29%. Even Indian SENSEX has gone down from the levels of 41,199 on 29 Jan 2020 when its first case was identified to current level of 29,815 on 27 March 2020, a drop of 27.6%. However, Shanghai Stock Exchange Index, SSE, has gone down from 2,962 on 23 Dec 2019 levels to 2,772 on 27 March 2020 which is 9.6% only. All the markets except China have seen their biggest one-day crash during the period. This definitely raises some eyebrows. Due to drop in prices many of the big global firms now face a risk of Chinese takeover as well. (Source)

When one analyses the new cases and recovery ratios in various countries, it further sends a signal of something being fishy. Even after one month of the pandemic being declared, recovery ratio for most of the nations where infection started in the month of Jan 2020 itself also is below 20%. Italy, Spain, Germany and France where cases began surfacing in the last week of Jan 2020 also record a recovery of below 20%. Japan, where the Covid cases started in second week of Jan 2020 also reports a recovery of 24% only. However, in China where Initial cases were officially reported on 31 Dec 2019, the recovery as on date stands at whopping 93%.

Further when timeline is seen, number of cases in US has gone up by 1,00,000 in last one month. In Iran cases have gone up by 35,000, In UK by 17,000, In France by approx. 25000, In Italy by around 90,000, Spain by around 71,000 and Germany by around 56,000 in last one month. However, the numbers have gone up by only 1200 in China in last one month. Further the death rate in China is is 4% whereas the death rates in European countries where cases recorded were substantially high have death rate of average 8% with Italy recording as high as 11% as on date. This pandemic has gripped well above 300 persons per million populations across Europe & US with as high as 1500 per million in Italy and Spain but in China it has only gripped 57 persons per million. (Source)

Currently when the whole world is under lock down, with all manufacturing sector in an almost stand still situation, China has resumed its manufacturing and has also committed to make up for the PPE & medical equipment requirement across the globe, such is the opportunism. China has even started to dictate some terms. China has even offered to help US, which obviously won’t come for free. Even World Health Organization has started to talk in lines of China. WHO even appreciated the transparency of China, which was quite strange as China wasn’t even accepting a human-to-human transfer two months back.

When the world was putting a travel ban on China to their own country, China protested as it was affecting trade. And now as the cases have gone out of hands across the globe, China has put a travel ban of any foreign national into China. With manufacturing sector set to be fully functional within just a month and with whole world expected to go under recession, bigger than 2008, the question still remains- was this a disease gone out of hand or a well-planned strategy for global domination by pushing leading economies to back foot.

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Ajeet Panigrahi
Ajeet Panigrahi
Analyst, Engineer, NITian, MovieHolic & Reviewer, Political Observer, Foodie
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