US Coronavirus Conflict With China: The Hill

COVID-19, a threat to social and economic activity, requires a global solution, explain Stephen Roach and Daniel Arbess. Scapegoating is “stressing the U.S.-China relationship, inhibiting collaboration and enabling China to fill the global leadership void,” the two write. Collaborative research and ending the trade war, especially on medical supplies, could save US lives. China’s strict containment approach reduced infections and other nations try the same. Societies must be willing to undertake economic sacrifices to save lives and “any snapback – the widely hoped-for V-shaped rebound – is more dependent on COVID-19 containment than on the ‘big bazooka’ of massive monetary and fiscal stimulus that worked so effectively in dealing with the financial crisis of 2008-09.” Rapid return to normal routines before protective medical equipment is available ensures economic disaster along with employment, liquidation and solvency troubles. Distributing funds to consumers and businesses adds to the debt burden for younger generations. Foreign investors could lose interest in Treasuris as investments, and interest rates could rise, constraining US ambitions for years to come. The writers conclude, “Great powers are great when they work together — not when they attempt to belittle and blame the other.” – YaleGlobal

US Coronavirus Conflict With China: The Hill

The US coronavirus conflict with China threatens US lives and economic stability, and the global problem requires cooperation and a global targeted response
Stephen S. Roach and Daniel L. Arbess
Wednesday, March 25, 2020

Read the article from the Hill about the need for US and Chinese cooperation on COVID-19.

Stephen S. Roach is a senior fellow at Yale University’s Jackson Institute of Global Affairs. He previously was chairman of Morgan Stanley/Asia and chief economist of the New York-based investment bank. He is the author of Unbalanced: The Codependency of America and China (2014).

Daniel J. Arbess, CEO of New York-based Xerion Investments, is an investor, entrepreneur and policy analyst who has focused on geo-economic developments of the last three decades, including the market transition from communism in Eastern Europe and China, the 2008-2009 market recovery, and the social, economic and medical solutions offered by data analytics. He is a member of the Council on Foreign Relations and the Atlantic Council and a co-founder of No Labels, which promotes bipartisan solutions in American politics.

  $6.2 trillion	 Ireland	$271  Brazil	$306  UK	$323  Japan	$1,101  China	$1,110

(Source: 24/7 Wall St)

Marketable US treasuries, average monthly interest rates, percent, Jan 2018 to Feb 2020 Rate Jan 2018	2.1 	2.2 	2.2 	2.2 	2.3 	2.3 	2.3 	2.3 	2.4 	2.4 	2.4 	2.5 Jan 2019	2.5 	2.5 	2.5 	2.5 	2.5 	2.5 	2.5 	2.5 	2.4 	2.4 	2.4 	2.4 Jan 2020	2.3 	2.3

Foreign governments hold about 30 percent of US Treasuries; read about why China buys US Treasuries (Source: TreasuryDirect)

 9.4% to 14% of GDP   More government debt reduces living standards and government revenues with fewer funds for government programs.

(Source: CNBC, The Balance)