Wuhan, city of the future

Wuhan is the past. The city of 11 million at the crossroads of China is where one kind of world abruptly ended when Covid-19 erupted—a reassuring place of ceaseless human interaction between families and friends, familiar colleagues as well as fleeting companions aboard buses, trains and planes.   Wuhan is also the future. Having defeated the virus for now, the city has become a model for a new, darker world. It's one that is singularly focused on keeping the pathogen at bay—a dystopia of extreme social distancing,according to a must-read account in Bloomberg Businessweek. At a Lenovo electronics factory, once communal tables at the staff canteen are now divided by high barriers to discourage conversation. Elevators are shut; workers climb stairs alone. At a Starbucks in the city, security guards remind customers not to sit too closely together, and to readjust their facemasks between sips of coffee. That's after they've had their temperatures checked, and the mandatory phone apps they carry around signal green to show the store—and the government tracking citizens around the city—they don't have the virus, and haven't been anywhere near anyone who does. The epicenter of the pandemic eventually moved on to Europe, and now resides squarely in America. As authorities debate how to emerge from shutdowns, they should be studying Wuhan. The key lesson, write Bloomberg's Sharon Chen and Matthew Campbell, "could be that the price of beating the virus is never-ending vigilance and a reordering of priorities that will be hard for many to accept." This week in the New Economy China's virus cases could have been four times the official tally. KKR-backed IndiGrid seeks almost $800 million in solar assets. Beijing looks at how it could expedite U.S. farm goods imports. South Africa must put locals first post-virus, Mboweni says. Hope turns to doubt, then gunfire, as a Saudi megacity emerges. People sit by the Han river in Wuhan, China, on April 17. Photographer: Getty Images/Getty Images It could be two or three years before the world returns to anything remotely resembling the past, which is about how long it may take to develop a vaccine, produce billions of doses and immunize the entire global population. That is if a vaccine can be found at all. In the meantime, Western economies are disintegrating; the meltdown in oil markets this week may be just a foretaste of convulsions to come. The Bank of England is watching an economic contraction that could be the worst in several centuries. Poorer countries face starvation. And we'll hear growing demands for an accounting of how Covid-19 escaped from Wuhan and triggered this catastrophe. Already, the Australian foreign minister is demanding an international inquiry. Britain's foreign secretary wants a "very, very deep dive." In the U.S., Republicans in Missouri sued China for "deceit," though it's been labeled a political stunt with almost no chance of surviving in court. A Pause in Hostilities   If U.S.-China "decoupling" was a distant threat before Covid-19, it's now a virtual certainty. In the latest installment of our Bloomberg New Economy Conversations series this week, Kevin Rudd, the former Australian Prime Minister, observed that "the best we can hope for is a tactical pause in hostilities while the strategic dimensions of the relationship continue to unravel."   China's ambassador to Washington, Cui Tiankai, wasn't ready to accept that bleak outlook, although he signaled that Beijing believes ties have reached a watershed. "I think I should be hoping for more than just a pause in tensions, but really a serious rethinking of the very foundations of this important relationship," he said.   Cui Tiankai. Photographer: Christopher Goodney/Bloomberg Susan Shirk, a former U.S. Deputy Assistant Secretary of State, lamented that "leaders on both sides are feeling politically vulnerable and therefore they're trying to deflect blame onto the other country." But don't expect a gentler China policy from former Vice President Joe Biden if he wins the U.S. presidential election in November. Though Biden was promoting his "friendship" with President Xi Jinping as recently as 2016, this is no longer the case. "This is a guy who doesn't have a democratic-with-a-small-'d' bone in his body," Biden said during a Democratic primary debate in South Carolina. "This is a guy who is a thug." So where does all of this leave Europe? China has tried to win over the continent with "medical diplomacy," but according to Mikko Huotari, the executive director of Berlin-based Mercator Institute for China Studies, the effort has backfired. A massive Chinese propaganda offensive has "created exactly the opposite of what it was intended to achieve," says Huotari. He notes that European governments are talking about self-sufficiency not just in the manufacture of medical equipment, which is now concentrated in China, but also in technologies like chips and batteries that China aspires to dominate. China Quagmire   Foreign businesses that intend to stick it out in China, despite the added risks, may have to contend with an entirely new operating environment, according to a research paper co-authored by Bloomberg New Economy Forum delegate David Hoffman, the head of the Conference Board in Asia. Hundreds of millions of Chinese people have been immobilized with a combination of digital tracking technology and physical mobility control that harks back to China's past.   "There is high plausibility that the China operating environment, post Covid-19 crisis, will see intracity mobility become more controlled and city economies become more autonomous, possibly for a prolonged period," Hoffman writes. "This is likely to produce a quagmire of differing local regulations regarding business restart, business conduct, transportation, and mobility." __________________________________________________________ Like Turning Points?  Subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close. Something new in your inbox. The Weekly Fix is an email with the latest fixed income news, charts, and insights. Sign up here to start getting it in your inbox on Fridays. 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