The novel coronavirus does not respect borders, but they loom large for heads of state and CEOs responding to the global health crisis. Geopolitics as much as public health will determine how the pandemic proceeds and its lasting effects on people and business. Ian Bremmer, president and founder of political risk consultancy Eurasia Group, says the crisis is exposing the world’s divisions, and could force the US and China into a more hostile and economically independent relationship. Bremmer recently met with a group of WIRED reporters and editors. An edited transcript follows.
Coronavirus is the largest global crisis since the 2008 financial crisis. How are the world’s largest powers handling it?
I think this is a turning point. The political response to 2008 was really strong inside the US, between Bush and Obama and the bailouts of Wall Street and Detroit, but also at the G7 and G20. We’re not doing any of that right now. Instead it’s massive mutual recrimination. There was an emergency G7 meeting but no communique or coordination.
We are in what I would call a geopolitical recession. Political institutions inside advanced industrial democracies are becoming more delegitimized, and so we see the rise of populism and polarization and nationalism in their politics. Internationally, you have the Americans and Europeans further apart on national security, the Russians in decline and blaming and trying to undermine the United States, and the Chinese building competitors to our institutions.
WIRED once said technology was going to make the world a richer and better place.
Everyone in the foreign policy establishment believed that if China got wealthier they would align with us and be a responsible stakeholder. That was completely wrong. The second thing we got wrong was this belief that technology was empowering liberal democracies and would completely undermine authoritarian regimes.
There’s an idea that the surveillance state is somehow going to give you better data and response to big shocks like coronavirus. Maybe in Singapore, which is a wealthy democracy that people trust. But in China the surveillance state got you the opposite. Mistrust prevented accurate information from being shared and encouraged patriotic posting on social media.
President Trump’s trade war with China has pressured US companies like Apple that rely on Chinese parts and manufacturing. Now China has shut down factories and cities to contain the virus. How will they respond?
Three months ago, my view was that we weren’t going to see significant movement of supply chains or labor out of China, but I have changed that view. The incredibly poor handling of coronavirus in China in the early weeks, and the vulnerabilities it exposed in just-in-time supply chains, are going to get a lot of companies to say, “I just don’t want to have that level of exposure to China and I’m going to move closer to where the customers are.” That means the US and Mexico.
That would be very costly. Won’t companies just make temporary changes and then return to China later?
One of the most interesting things in US politics is that everyone is beating the crap out of China except Trump, who continues to say Xi Jinping’s a good guy. But if the coronavirus gets to the point that it’s starting to affect Trump’s reelection possibilities, he’s not going to be outflanked by the Democrats on being soft on China. He’s going to flip immediately and in a very hard way, pulling out of the phase one trade deal and snapping those tariffs back. The coronavirus and this election, simultaneous with a geopolitical recession, makes a real cold war a plausible risk in the next three to six months.
What does a cold war look like in the 21st century?
It looks like every area where the Americans and Chinese are interacting is more competitive and combative. Hong Kong and South Korea and the South China Sea look much more tense; there’s a lot less coordinated trade between the two countries and tariffs go up; fewer students and technology being exchanged. In that kind of environment, it becomes patriotic for American corporations to leave China.