Summary Bullets:
- As China’s IT industry returns to work, new geopolitical tensions compound economic uncertainties which, if not addressed, could threaten public health and economic recovery.
- Global IT companies can help to find collaborative solutions that encourage a change of attitude and which emphasize international cooperation and resource sharing.
In recent days, the world has watched optimistically as travel and other restrictions in China’s Hubei province, where the global COVID-19 pandemic started, have been slowly relaxed and as manufacturing in China progressively returns to normal. This optimism also extends to China’s IT manufacturing sector, with Inspur, Lenovo, Huawei, and other IT vendors all reporting a return to normal production.
China accounts for more than 50% of global technology supply chain exports, so a rapid return to production is widely seen as essential to avoid greater knock-on effects on the IT industry later this year. However, the future of the IT industry is also linked to the fate of both the Chinese and the global economy, both of which are expected to experience a slowdown in the wake of the COVID-19 crisis. Although further economic stimulus measures from the Chinese government could be forthcoming, these are not expected to be on the scale of its response to the 2008 economic crisis.
Meanwhile, new geopolitical tensions compound economic uncertainties which, if not addressed, could threaten public health and economic recovery. Prior to the crisis, U.S. sanctions against China were the primary challenge for many IT companies, which had been forced to reorganize trade and procurement policies. Now with COVID-19, already strained U.S.-China relations have the potential to deteriorate further, spurred by a new political rhetoric that is characterized by blame and accusations about the way the crisis was handled, the manner in which COVID-19 case numbers and deaths were reported, and official support for conspiracy theories relating to the origin of the crisis.
Internationally, governments, businesses, and societies will need to ask questions about how this crisis happened, the way they responded to it, and how to ensure that future pandemics can be avoided and/or managed. However, these questions need to be addressed in a constructive and collaborative way in order to ensure that future dangers to public health can be avoided and unnecessary damage to an already fragile global economy can be prevented. The IT industry illustrates the extent of global interdependencies, and it is neither in the U.S. nor China’s interests to allow spats concerning the origin and management of the crisis to jeopardize global economic recovery.
Collaborative solutions are therefore needed that encourage a change of attitude and emphasize international cooperation and resource sharing. Global IT companies have already demonstrated tremendous initiative and leadership in their response to the crisis, working with governments as part of a coordinated response that includes offering cloud, AI, and other IT resources to help fast-track the search for a COVID-19 cure and vaccine. A further response should focus on helping to shape the geopolitical agenda, working alongside political leaders in ways that encourage and foster international collaboration.
For more insight into GlobalData’s ongoing coverage of the COVID-19 crisis and its implications for the technology sector, see the COVID-19 dashboard on our homepage.
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