The Slow Death of Liberal Capitalism


Investors, seeking shelter from the coronavirus-linked sell-off, have piled into Chinese government bonds on an unprecedented scale.

These purchases have increased the total foreign ownership of Beijing’s bonds to record highs, even as much of the country is still emerging from lockdown after the viral outbreak. In an ironic twist, the country where the pandemic originated has become an unlikely safe haven for investors – a shift that one prominent trader has described as “the single largest change in capital markets in anybody’s lifetime.”

But it is not only investors that are looking to China. Last month the European Commission president, Ursula von der Leyen, thanked Beijing for delivering more than 2 million masks and 50,000 coronavirus testing kits to European countries including France, Italy, the Netherlands and Poland. Europe is not alone: after successfully bringing the spread of the virus under control domestically (for the time being at least) China has embarked on a high-profile campaign of health diplomacy, winning applause around the world for providing support to countries in need.

Chinese civil society is playing its part too. The Jack Ma Foundation, a charitable organisation led by China’s wealthiest individual, has pledged to provide each African nation with 20,000 testing kits, 100,000 masks and 1,000 protective suits.

In the US, things look rather different. President Trump’s mishandling of the crisis has put the US on track to experience the most deadly outbreak of any major country. After initially denying the gravity of the pandemic, President Trump quickly turned his fire on Beijing, referring to the disease as the ‘Chinese virus’. Meanwhile, the President’s allies on both sides of the Atlantic have demanded that China pay reparations for allegedly causing the outbreak.

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