Blain’s Morning Porridge – May 26th 2021: BatPoop Crazy Stories May Herald a New Trade War
“When you have eliminated the impossible, whatever remains, however improbable must be the truth…..”
This morning: Everyone loves a conspiracy theory, but what if the stories Covid escaped from a China virus lab take hold? We will never know the truth, but as the rumours multiply, they could trigger renewed trade-war. It could unravel China’s regional hegemony and herald a dramatic reversal for the global economy -especially for China.
Who can resist a good conspiracy theory?
Dark, government influenced deeds swirling in cloaks of impenetrability of which the truth will never be known… Don’t you just love them…. The more crazy they are… they more believable they become…Let me assure you – it is most definitely not the role of the Morning Porridge to give oxygen to mad-cap conspiracy nonsense… but..
But.. there may be times when a conspiracy theory has the potential to unravel markets. In which case they can’t be ignored. I am hoping it’s not the case, but the rising tide of stories about how Covid 19 may well have leaked from a Chinese Lab in Wuhan could create global trade mayhem…
So, indulge me while I describe the tale of the China Virus research lab, an abandoned copper mine, and bats.. lots of very well-fed bats. The deep dank mine is the hole from which the Covid-19 virus crawled out. In 2012 Chinese miners entered the mine to clear out bat-shit (I told you this is crazy) and ….. Half of the miners died. (3 out of 6 according to the WSJ)
At which point we introduce the Wuhan Institute of Virology. It took samples from the mine (nearly 1500 miles from the copper mine), and identified a number of new coronaviruses..
7 years later, in 2019, the same Coronavirus is apparently the one killing people in … Wuhan. Three researchers from the Lab were admitted to hospital, apparently with the disease in Nov 2019, and it may have been infecting workers even earlier than that.
Crashing minor chords…. Dah Dah DADADA..
The fact the Laboratory and the Chinese in general aren’t being particularly forthcoming about the virus and let us believe it emerged in live food market isn’t helping. China has responded to requests for information by sponsoring confabulations that US servicemen competing in a sports competition brought the illness to Wuhan, and are demanding the WHO investigates how the disease was exported into China, rather than the other way round. Deflection and repeating the big lie often enough can achieve spectacular outcomes.
Even writing this is bound to earn me a slap from my chums at the Bank of China. I might even be zero-platformed – as happened to a chum of mine when he complained about gangs of “Chinese” pickers hoovering up Oysters from the Southampton Water foreshore at low tide.. His crime? Calling them Chinese. Why didn’t he just call them people….
Labs in Carolina and Wuhan are world leaders in SARS and Covid research. We’ve known since 2002 that bats are a natural reservoir for coronaviruses. They have been actively studied and the viruses manipulated and tested on humanised mice – tech the US has shared with China. It’s possible to construct the viruses from the genetic code very quickly. It seems unlikely a new novel coronavirus discovered 1500 miles from Wuhan then suddenly jumps from animal host to humans in Wuhan… where there just happens to be a world leading virus lab studying the same virus…. Just saying….
In 2018 the US state department reported the Wuhan lab suffered from “a serious shortage of trained technicians and investigators needed to safely operate a high-containment laboratory.” In the US coronavirus spike protein research on humanised mice is done wearing full haz-mat suits and helmets. In Wuhan, they protect themselves with masks and glasses.
As the conspiracy theory deepens it then emerges the virus just seems a might too well adapted to humans… which doesn’t make sense when it’s evolved in bat-shit and was plucked out of a deep dark mine no one had visited for decades.
If you want a more in-depth scientific explanation of the virus structure and why its so suspicious, then try David Murrins: The Unnatural Origins of the Wuhan Pandemic. Its subscription only.. but if you ask him nicely, I am sure he will share it.
At this point my grasp of the science gets tenuous. Fortunately, David was able to sort of explain it.. According to an unnamed virus researcher favoured by conspiracy theorists, the likelihood of the all the “nucleotides” being aligned the way they were was less than 3%, and the virus peptides – which causes the acute autoimmune response – are frighteningly similar to humans. Someone has worked out the virus sequencing has a 0.09% probability of emerging naturally, leading to a suspicion a human genome was used a “gene-jockey” to insert amino coding.
That all sounds a bit virus-babble, but is apparently “a smoking gun” according to Nobel prize winner Professor David Baltimore of CIT – a chap who most definitely does understand the science.
The fact China seems to have suffered so mildly and hasn’t suffered recurrent waves of the virus… well its sets the West’s legions of conspiracy theorists a wondering… Even the esteemed Dr Anthony Fauci, one Trump’s and now Biden’s medical advisor now says “the possibility exists, and I am totally in favour of a full investigation of whether that could have happened.”
At this point – enough of the story… What if its true?
Of course, we will never know.
The Chinese will never admit a mistake – especially one that would open them to enormous damages claims. Even if the US has firm evidence it occurred, they would be unlikely to release it, knowing it would cause trade mayhem. But as the evidence continues to mount, and there is nothing else showing it was animal to human transfer, this has the capacity to evolve into something of a showdown between China and the rest of the world. Increasingly, in the absence of a zoonotic transfer from animal to human, an accidental leak of a genetically modified virus looks a possible, even likely, cause of the virus.
What will be the outcomes. No one is likely to be happy. Regionally, the Indians will be particularly vexed. The co-prosperity sphere of Belt and Road client states may see it as time to unburden themselves of the economic shackles of China’s debt diplomacy – especially if the west prioritises them for vaccines.
Economically, China could struggle. We really don’t know how the virus affected China – the official line is the Party’s genius and antiviral procedures limited the pandemic, and enabled it to successfully avoid the second and third waves that have swamped the rest of the world. But, there are clear signs the economy is hurting.
China does not exist in a vacuum. It needs the rest of the world to buy the goods it produces. As the pandemic showed, growth depends on the rest of the world being open to buy. The government has now battened down on commodities speculation, as many analysts believe Chinese companies have created their own crisis by over-ordering iron, steel, copper and coal in the expectation of recovery. Now, soaring materials inflation in China is hampering their ability to export – even as the rest of the world is now spending freely again.
Moreover, the ongoing problems in housing, bureaucracy and jobs keeping the economy on hook remain. Reining back regional government spending is a priority – but its effect is going to be felt in a string of defaults. There is a brewing debt crisis as Chinese companies – including state-owned firms – struggle to repay their highly levered loans. Rising inflation may force the PBOC (People’s Bank of China) to raise rates – exacerbating the economic slowdown.
Unless a crisis occurs, China is not about to suffer any kind of economic cataclysm, but just like the economies of the west it’s got a whole heap of its own financial issues to solve.
And that is going to get much, much more difficult if Western and other Asian economies increasingly take the line China can’t be trusted because of its obstification over the genesis of Covid. It’s a game China can’t win – if its not true, then how to do they persuade the world. If it is true – the time for apologising is long past. No one ever wins in a trade war, but China has more to lose than most if its conversion from export led to domestic consumption driven economy stalls due to unanswered Covid questions…
Five Things to Read This Morning:
Out of time, and since it’s the first sunny day in weeks, I’m taking puppy for a walk!