Everyone talks about the Western order, but what if we say there is a Chinese world order in creation? What if it’s about to be ushered in, and no country knows about it?
Many countries have suffered from COVID-19, but the problems have lasted way longer than expected in China. China has put many restrictions as a precaution, but above all, the zero-COVID policy was a very bold step taken by the world’s second-largest economy, China.
In 2023, when China was opening its gates to the world, massive financial changes were about to occur that were going to reshape the entire world’s economy. China first took the bold step of locking down the entire city of Wuhan in 2019. It was nothing less than a shock for the entire world to shut down the entire city fully. More than 11 million people were forced to stay home to prevent COVID-19 from spreading. All the businesses were shut down, and the shops and the offices were closed.
At that time, it was the only thing China could do to save lives, but economically it was a devastating pause. Later, China had to impose even more restrictions and launched the Zero-COVID policy. This policy had no flexibility, allowing the Government to shut down large cities for weeks and even months.During this time, China’s connection with the world was reduced to a minimum in this decade. While its GDP was booming previously, after COVID-19, it had only expanded by 3 percent in 2022. China was progressing quickly, but this sudden misfortune slowed down the progress to some extent.
These restrictions had not only affected China but the effects can be seen beyond the borders. China contributes 18 percent of the world’s entire economy, and the world had definitely seen a gap after COVID. When huge importers like China cut their connections with the world, the effects were felt in every corner of the world.
Apart from that, the masses did not support the Chinese government in this bolder step. Many protests were witnessed against the Zero-COVID policy in China.
But as soon as China started the Zero-COVID policy, China also shut it down quickly. After the rebellious protests, the only thing that could be done was to end these restrictions and let the people come out of their houses. After spending 1016 days in lockdown, China opened its gates on 8 January 2023. It had not fought COVID-19 completely, but according to its locals, the challenges had become a new normal for them. They were ready to face and fight the challenges.
So, China reopening in 2023 was a huge historical economic event. A sudden change in the market was about to be seen. China had been in lockdown for a long time, and things have changed significantly during this time. But China’s return in the economy was about reshaping the entire world’s economy. And the question was how? How China’s return has reshaped the world’s economy? Before understanding how China has reshaped the world’s economy, a few things should be kept in mind. Number one, China is a huge importer of oil. And in 2020, this import decreased. Secondly, a huge number of tourists from China visit the world each year. But the number has decreased from 154 million in 2019 to only 20 million in 2020.
Now, let’s talk about how China’s reopening has impacted the world. The first thing that has boosted China’s economy is it’s tourism. Many countries rely on tourism. A huge number of Chinese visit many countries each year. Apart from that, many tourists also visit China as well. But after the lockdown, both China’s and the world’s tourism suffered. Nobody was either going out of China or coming into China. But the news of China’s reopening means now Chinese can go out to other countries and spend money there. And this is good news for the world. In places like Hong Kong, a big boost in GDP was shown after the Chinese were allowed to go out. It is estimated that an 8 percent increase in their GDP was noticed after the complete reopening of China.
With this, you can guess how the world’s total GDP depends on China alone. So, everyone will benefit from Chinese tourist travel, but not the west. Western countries have put restrictions on Chinese tourists. But this will only affect their own economy because if Chinese people don’t go to western countries, it simply means western countries won’t be getting China’s tourist spending. The west is trying not to depend on China’s tourists, but this will mean blocking money to their countries.
The second thing that affected the west after China’s reopening is the prices of goods. When entire China was under lockdown, the exchange between China and the world stopped. China was purchasing little to no goods. But after the reopening, the graph spiked up. China’s demand increased. And this increase has ultimately increased the price of commodities.For instance, when China started purchasing oil at a high pace, the prices of oil increased. China is a huge consumer of oil. It buys fifths of the world’s oil. While the west, which is already under an energy crisis, will have to pay more money to get oil.
The west is trying to find a better supplier than Russia, so they will have to depend heavily on imported oils. After China’s reopening, imported oil prices has increased, which has affected the west. Apart from that, it is also assumed that China’s demand for LNG will also increase, which will disturb the west’s already secured LNG deals. China’s increasing demands will flow more money to the world. But the west will be, in fact, paying more than usual.
The third and most important factor is foreign investments. China is the best market for investment. But after the Zero-COVID policy, many companies concluded that staying in China was no longer beneficial. So, they decided to move their production factories out of China. They went to countries like India. But remember, China has cheap labour and the best supply chain. The only problem was the Zero-COVID policy. So, after the reopening, it was very likely that these companies would switch back to China.
China has seen the worst 2.5 years in this decade, but after it reopened, it easily gained the trust again. According to the experts, China’s reopening is actually a joy for foreign companies. Because having production factories in China benefits more than any other country in the world.
So, once China is fully open, these companies will move back to China, bringing more money into the country. At the same time, the countries from where these companies will relocate will face a downfall.
It is obvious that China reopening has reshaped the economy of the entire world in less than a year. Once China is fully reopened, and the exchange between China and the world will continue, a rapid variation in the world’s economic graph will be seen. For many countries, it will be a time of joy, but the situation might be a bit challenging for western countries.
After the first three months of 2023, massive changes have seen. Let’s see which country got the most benefit in the year 2023. We might see some new friendships forming in this as well. Do you think China and the west might want to get into a friendly relationship with China in the future? Knowing that China has the power to influence the world’s economy, isn’t it better to shake hands with China?
Author is an independent researcher and can be reached at saramazhar390@gmail.com