This chapter draws from Masahiro Miyazaki and Tetsuya Watanabe’s The Corona Great Depression: The World Excludes China, discussing how the true nature of globalism was the world economy’s dependence on China. It explains how the Wuhan coronavirus halted the movement of people, goods, and money, exposed the cost of China-centered globalization, and accelerated a paradigm shift toward anti-globalism and domestic-demand-driven economies.

June 18, 2020

The world was forced to sink.
But that is the price of globalization that deepened dependence on China.
From now on, a paradigm shift will occur.

The following is from Masahiro Miyazaki vs. Tetsuya Watanabe’s “The Corona Great Depression: The World Excludes China,” published on May 1.
Chapter 4
The True Nature of Globalism Is the World Economy’s Dependence on China
Miyazaki:
In this chapter, let us look at the impact that the downfall of the Chinese economy will have on the world economy.
It is just like the fall of Icarus, is it not?（笑）
What became clear through the explosive spread of the Wuhan coronavirus is that, when reduced to its essence, globalism was nothing more than the world economy’s dependence on China.
At least in the eastern half of the Eurasian continent and in the Pacific.
In 2003, China’s economy accounted for only 4 percent of global GDP, but now it accounts for 20 percent.
Whether America, Europe, or GAFA, they sought to profit from using China as a “factory” and from China as a “market.”
China, for its part, also used Europe, America, and global corporations in order to scheme for the “Sinicization” of the world.
From both directions, the world economy’s dependence on China increased, and along with that, Western society tacitly accepted the Sinicization of politics.
The structure of exploitation of China versus Sinicization became increasingly serious and sharpened in the “war for hegemony” that began with the U.S.-China trade war.
The American government shifted course toward excluding China and demanded that the rest of the world do the same, but countries around the world that had already been built into China came to recognize once again that decoupling from China was not easy in any respect: people, goods, or money.
Even when American pressure exposed the harmful nature of pro-China factions inside their own countries, they could not take the step of excluding Huawei because of technological dependence.
If even Britain is like that, there is no need even to mention the EU countries, Asia, or Africa.
While they were hesitating amid the collision between the United States and China, the Wuhan coronavirus suddenly attacked, and they had no choice but to exclude people.
If people do not come, goods and money naturally stop as well.
The world was forced to sink.
But that is the price of globalization that deepened dependence on China.
From now on, a paradigm shift will occur.
Watanabe:
I agree.
We had entrusted too much to other countries, from daily necessities to infrastructure.
This problem has occurred not only in Japan but also in the United States, and the medical field, especially masks and the like, has become a major issue.
Also, in Europe, while the production and distribution of daily necessities had become shared across countries, each country began to adopt a policy of putting itself first, and this division has begun to appear.
Germany, France, and others have banned exports of medical-related supplies, and as a result, those supplies are increasingly failing to reach other countries.
Rather than short-term panic over indicators such as stock prices, this is in fact the larger problem, and it is highly likely to bring about major changes in the world’s social structure.
As for the world economy, as long as the problem is structural, the Wuhan coronavirus merely accelerated the crisis, and the fact remains that we are entering an adjustment phase.
Until now, under globalism, the world economy achieved growth through global corporations investing in the “industrialization” of emerging countries represented by China.
It was America that bought huge quantities of cheap products from China, which had become the “factory of the world.”
In a sense, the structure was one in which China and America, or rather the Chinese Communist Party and global corporations, received the greatest benefits, while the demand supporting that structure came from the American people.
However, it is a well-known fact that China’s industrialization brought about the hollowing-out of manufacturing in advanced countries and took away jobs.
As a reaction to that, President Trump appeared, advocating America First, and the United States moved from a U.S.-China honeymoon into U.S.-China confrontation.
Since then, the world has been turning backward toward anti-globalism, raising national borders higher and creating an economic structure that restricts the movement of people, goods, and money.
In short, the world can no longer rely on American consumption, and must shift to an economic structure led by domestic demand, raising consumption within each country.
The Wuhan coronavirus has accelerated that rotation.
As a result, what we are now facing is not the expansion of domestic demand, but a “demand shock.”
Here lies the difference from the Lehman Shock, which was a financial crisis.
Miyazaki:
The American consumption that supported the world economy was created by debt, such as credit cards and subprime loans, and by asset prices such as stocks and bonds.
There are also reports that the real wages of 80 percent of Americans have not risen since the 1970s.
Therefore, household debt has swollen, and the outstanding balance of student loans is astronomical.
When stock prices fall, consumption will decline.
For better or worse, it is only natural that Trump is particular about stock prices.
Remainder omitted.