China and COVID-19 – An Inconvenient Truth (November 2019 – November 2020)

Background Facts: The COVID-19 virus originated in China in a lab. It escaped that lab in Q4 2019. China hid the facts surrounding the virus from the world until January 2020. As a result, the COVID-19 virus subsequently spread around the world with catastrophic consequences. The virus still persists everywhere in the world today and is reported to be surging again – except in China (where they have somehow stabilized without viable treatments or vaccines).

Economic Facts: Projected economic growth for 2020 and 2021 is as follows.

US – (4.0%) and 3.5%

Europe – (7.5%) and 4.0%

UK – (10.0%) and 3.5%

Japan – (5.5%) and 2.5%

China – 2.0% and 8.0%

China’s economic growth in 2019 was 6% and they are the only country in the world with positive  economic growth projected for 2020.

Economic Facts: Projected official interest rates for 2020 and 2021 are as follows.

US – 0.15% and 0.15%

Europe – (0.50%) and (0.50%)

UK – 0.10% and 0.10%

Japan – (0.10%) and (0.10%)

China – 4.35% and 4.10%

Emerging market countries (China is considered an emerging market) typically benefit when developed market countries lower their interest rates. Lower rates normally contribute to a weaker US dollar and they can make other countries bonds more attractive on a relative basis. China bonds conveniently began to be included in the Bloomberg Barclays Global Aggregate Index starting in 2019 (phased in over 20-months) – perfect timing.

China’s trade surplus soared to a record $75.4 billion in November 2020 as exports surged 21.1% compared with a year ago, highlighting how the global plague that started in China has enriched their economy.  

Chinese Communist President Xi Jinping suggested all countries adopt a global QR code system to help determine traveler health status and travel “permissions” in a post-coronavirus pandemic world. During the recent virtual G20 summit, Xi called for a coronavirus “global mechanism” which involves international recognition of health certificates in the form of QR codes to allow people to travel freely, according to state media. Xi says the system can be based on “nucleic acid testing results in the form of internationally accepted QR codes” reported state news agency Xinhua. “We need to further harmonize policies and standards and establish fast tracks to facilitate the orderly flow of people” he is quoted saying. “We hope more countries will participate.” QR codes are bar codes that can be read by mobile phones that are a common tool for tracking and control inside Communist China.

I encourage you to examine all the data, information and statistics surrounding Covid-19 on your own and draw your own conclusions.

(Economic data provided courtesy of Alliance Bernstein)

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