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Opinion | Hong Kong’s government is sleeping on the job as the coronavirus adds to challenges facing globalisation
- Hong Kong should be alive to the coronavirus threat to globalisation, yet unlike in Singapore, another international city dependent on free trade, the government has shown no leadership, leaving medical workers to strike for better protection and domestic workers open to further abuse
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It may be too early to draw conclusions about the long-term impact of the novel coronavirus. It may prove a passing issue that caused fear and inconvenience out of all proportion to its mortality rate, whether in China or elsewhere. But it has emphasised the importance of transparency, and the need for measured and firm responses.
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It also poses an additional challenge when free trade and economic globalisation are already facing their biggest challenges in decades.
The interruption of supply chains due to the closure of factories in China and the cancellation of flights, conferences, sporting events and the like is providing a lesson for manufacturers in the potential dangers of overconcentration of production in a tiny number of locations.
US President Donald Trump’s trade wars, in particular against China, have sparked a diversification of supply. This has barely made a dent in the US trade deficit, as some production has shifted to locations such as Vietnam and Mexico, or has been brought back to Taiwan or South Korea.
Maybe some will go back to higher-cost Western countries because of real or feared tariffs. That process will now speed up, not because China is necessarily more prone to disruption due to the epidemic, but simply because its size favours concentration. Diversification is an economic cost that is, perhaps, now worth incurring.
Another push in this direction may be coming from the Extinction Rebellion movement which has taken hold among many, mostly young people, in the developed world. Pressure is building to cut the environmental costs of transport by air and sea, which could well mean increased costs for these industries as improvements in technology lag behind demands to cut pollution.
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