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Webinar: Who wins in Asia after Covid-19?

6 May 2020

On 6 May the EU-Asia Centre hosted a webinar discussion on ‘Who wins in Asia after Covid-19’ with Kishore Mahbubani (former Singapore Ambassador to the UN) and Kiki Fukushima (Senior Fellow, Tokyo Foundation for Research). The event was moderated by Fraser Cameron, Director of EU-Asia Centre.

Mahbubani was surprised by the unexpectedly large difference between the effectiveness of the Covid-19 responses in East Asia and the West. East Asian societies had coped relatively well with the crisis, partly due to their SARS experience, whereas the West and the US in particular, had reacted only belatedly and after a period of denial. The severity of the Chinsese alarm about the virus in early January, especially after the drastic lockdown measures in Wuhan, should have been loud and clear to all countries.

The success in Asia could be attributed to past decades of investments into Western- model governance and institution building. In the US and UK, the difficulties could be a legacy of the Reagan/Thatcher era with an ideological reduction of the role of the state in favour of free markets.

Fukushima agreed that the battle against Covid-19 is not finished and that balancing disease controls and ecnomic activities will be a continuing challenge. Multilateralism would remain key. It was important to guard against states such as the DPRK (missile testing) or China (SCS) taking advantage of the situation.

In the discussion, both agreed that the world needs to come together and strenghten multilateral institutions, including the WHO and WTO. The under-utilised ASEM should be re-invigorated as platform of cooperation for the Europe and Asia. Despite the recent headwinds, multilateralism and globalization will continue although with some changes.

China had learned from its history that it must stay open and connected to the world. The US allies should try and convince Washington to embrace multilateralism now at the height of its power fore the balance of the world shifts towards China. In the short term, however, anti-Chinese sentiment in the US is likely to intensify as the elections approach. It was regrettable that calls for an international inquiry into origins of the virus in China have become politicised (the blame game), explaining the Chinese reluctance to cooperate. In ASEAN, the US as the largest investor and an active power over the years, the US still has a large recervoir of goodwill.

The panelists expected there to be limited shift of supply chains away from China, but no Asian country wishes to end of globalization or become less interconnected with world. The Ricardo doctrine of comparative economic advantage remains valid. Japanese companies for example are not looking to move out of China, but to diversify their supply chain to mitigate fragilities brought by globalization. ASEAN could be one of the beneficiaries of the change, but through multilateral trade all of Asia, including China, would eventually benefit.

See the full recording of the webinar here.