It may be finally dawning on the public that making almost everything in Asia simply because we thought we could make it cheaper there⏤was not the brightest idea. In an editorial by William Galston in the Wall Street Journal on March 11, 2020, he explained how we have fallen for efficiency at the cost of resiliency. Our relentless pursuit of efficiency has caused us to follow the well-known economic concept of focusing on what we do best and letting others supply the rest.
For the past three decades that “other” became mainly China. This is precisely why a primary economic upheaval has occurred in almost everyone’s supply chain as the Chinese coronavirus shut down so many of their industries. Indeed, when the virus took off in China, nearly every manufactured product was dealt a blow by the loss of important pieces of their products puzzle.
A more resilient economy, while less efficient in the short term, can source things from multiple suppliers. Perhaps more expensive, those parts are there in a pinch when your future depends on them. The bottom line is that America must start making a lot more of the vital products it uses on its own shores. Pharmaceutical products, now made 90% in China, goes without saying. In “Time to extricate from China,” Peter Murphy, an analysts for the Committee For A Constructive Tomorrow (CFACT) writes:
“China is now the largest producer of active pharmaceutical ingredients (API) according to the U.S.-China Economic Security Review Commission, a federal agency. A recent commission report stated that the U.S. “is heavily dependent on drugs that are either sourced from China or include APIs sourced from China.” One example: the U.S. imports 90 percent of its antibiotics (including vitamin A) from China.”
In what must rank as one of the greatest gaffs in modern political history, China reminded us how vulnerable we have become in pharmaceuticals.
Fox News reports that in a recent article in Xinhua, largely considered to be the mouthpiece of the Chinese Communist Party, it was claimed that China could impose pharmaceutical export controls which would plunge America into “the mighty sea of coronavirus.”
Hmm; who manufactures most of America’s drugs? You guessed it – China. And, perhaps it is no surprise that, according to the New York Times, “China is pushing a new theory about the origins of the coronavirus: It is an American disease that might have been introduced by members of the United States Army who visited Wuhan in October,” an idea which the Times reports “there is not a shred of evidence to support.”
Richard Brock, who advises agriculture through his insightful newsletter and seminars, has watched our nation’s farmers jerked around by the vagaries of crop exports to China. He knows full well the games they play. In his March 6 Newsletter, he has pointed out that the gig may be up with them as a result of the Chinese coronavirus that is likely a result of their insipid handling of its initial outbreak, if not in fact cause. Indeed, even the New York Times stated point blank, concerning the attempt to blame the US for the outbreak: “It is most likely intended to deflect attention from China’s own missteps in the early weeks of the epidemic by sowing confusion or, at least, uncertainty at home and abroad.”
China’s economy was already soft, but is now spiraling downward. They have lost prestige as a world power that they will not likely regain any time soon. Once trust is lost it is not easily retrieved.
The outcome of this will likely be very positive for US Industry. How many companies will move low cost-manufacturing from China back to the United States? A lot. Brock states the obvious, “It does not help to make something cheap if you can’t get it”.
As you read this article the stock market has been overcome with volatile gyrations, but rest assured, long-term, it will recover leaving this episode in the dustbin of history.
The travel industry, which is taking a hit, will take time to recover but can you imagine United Airlines losing its edge for long? The oil industry is suffering, but the public and the airlines are benefiting where fuel is 25% of their costs. We had to smile when President Trump announced he was going to refill America’s Strategic Petroleum Reserve with $32 a barrel oil. The last President to refill it did so with $100 a barrel oil.
For many of us, our world has been turned upside down with the Chinese coronavirus. If you have school aged children you may be figuring how to cope with their schools closing. Your company may be asking you to work from home. Your vacation plans may be trashed. For sports fans of all types, it is a lost year. But all this is nothing in comparison with what could happen if we don’t stop relying on China for our vitally-needed products. That realization is perhaps a silver lining in today’s clouds.
It is the role of China, in America’s, and indeed the world’s future that we need to change with the same urgency as we are now attacking the virus itself.
In our September 4, 2019 article, “The Obvious Chinese Collusion in the Climate Change Delusion,” we explained how China has been promoting the climate scare to pave the way towards replacing the US as the world’s dominant power. Citing China expert Michael Pillsbury’s new book, “The Hundred-Year Marathon, China’s secret strategy to supplant the United States as the world’s dominant power,” we described how China has apparently been colluding with organizations in western democracies that advocate climate change alarmism. We wrote,
“Their goal is ending the use of fossil fuels except in their own country where they use wind and solar as a facade to distract the media’s attention away from the coal-fired power plants they build each week…. China’s drive towards ‘renewable’ energy is for the profit they derive from selling the West the materials to build a renewable energy production infrastructure that can only fail economically… Fossil fuels are cheaper, so the Chinese guide us away from them. That is the key to their long-term strategy.”
And, of course, China has established itself as a leading supplier of the wind and solar power that they are working to convince the west that we need to avert the supposed climate crisis. Indeed, as of 2015, China is the largest producer of solar panels. Also, as of 2015, which company is the largest wind turbine manufacturer in the world? You guessed it – it is a Chinese company, Goldwind.
So, as our economy and thus our influence in the world weakens, China’s grows, taking them closer to their ultimate goal of world domination.
We must remember—China is not now and never has been an honest economic player in the world market. While it is not the complete prison camp exemplified by North Korea, with facial recognition keeping track of 1.3 billion citizens with 600 million cameras, it is not far from it either.
The Chinese coronavirus has pulled the curtain away from Chairman Xi Jinping’s empire. Let’s hope the world takes advantage of it.