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Niall Ferguson "Cold War II of U.S. and China Starts in COVID-19"




Niall Ferguson, Senior Fellow at the Hoover Institution, Stanford University, said that the U.S.-China conflict aggravated by COVID-19 is the real start of Cold War II.


The historian who had a telephone interview with Maeil Business Newspaper, organizer of the World Knowledge Forum (WKF), expected that the so-called G2 war will likely put the whole world in danger as the battle spreads into a political, diplomatic and ideological sphere.


He described the cold war between the U.S. and the Soviet Union in the 1940s as Cold War I, and the G2 War as Cold War II.


Ferguson, who often joined the WKF, noted that there is a difference between Cold War I and Cold War II since it is much more difficult for the rest of the world to choose one of the two powers.


For example, the U.K and South Korea will avoid selecting the U.S. or China as the interests are complicatedly mixed.


He predicted the COVID-19 situation will last at least for two years as it will take that much time to see vaccines against it. Followings are questions and answers.


Q: Okay, when the news of the COVID-19 first broke, did you expect it to become such a pandemic leading to grow global economic crisis?

A: Yes.


Q: And how so? 

A: By the time I got to the World Economic Forum in mid-January, I was quite certain that a very serious pandemic was going to happen. And I was amazed that very few people saw it at that time. Hardly anybody at the World Economic Forum discussed it. I repeatedly pointed out to people that it was a much bigger risk than climate change in the near term. And history, which is what I study, is quite a good thing to know about because pandemics happen and they happen particularly when international trades and travels are at very high levels, which they were. They very often start in China. In fact, most of the major pandemics in history have started in China. 


Q: In China?

A: So yeah, Black Death originated in China, for example; the big 1957 Influenza pandemic originated in China; so did the 1968 pandemic. So it's actually a pattern. I actually wasn't at all surprised by what happened. I think I was surprised only by the extremely incompetent way in which Western governments responded to the crisis.


Q: Compared to the previous pandemics in the human history, what makes this one so different?

A: Well, I don't think that it's that exceptional as a "disease" COVID-19. There's no danger that it's going to kill as many people as the Black Death in the 14th century, or the plague Justinian in the year 541. It's not in that league, and it's not in the same league as the Spanish flu of 1918. So, I don't think it's an exceptional pandemic. But I think what's extraordinary is the economic damage that we've done to ourselves in our very inept responses to the pandemic. I think the economic consequences will be far greater than the pandemic itself, because we have, in effect, re-run the events of the Great Depression at a kind of accelerated speed. It's sort of Great Depression, but at 12 times the speed of what took years, in 1929 through 32, is happening in a month. We're going to have depression levels of unemployment in the U.S. The big economies of the world are contracting by much larger amounts than we've ever seen in our lifetimes. 


Q: The tensions between the U.S. and China has been quite growing, but has deteriorated for the last couple of months. And how big do you think the damage between the U.S. and China is, after the corona virus.?

A: I think the Cold War, which is what I regarded as, has been going on for some time. What happened really was that the pandemic revealed to the people, who didn't believe it last year, that the Cold War to had begun. As I argued, over a year ago, Cold War II is about much more than just tariffs. It's about a technology war. It's a strategic conflict. It's about an ideological conflict. And I think frankly, this is really going to make it worse because we've seen on the Chinese side wild fake news from the Chinese Foreign Ministry trying to argue that the pandemic somehow didn't originate in Wuhan. On the U.S. side, there are some pretty aggressive accusations that China has been negligent in its handling of the crisis. So relations have gotten worse and they show no signs of getting better. I think the phase-one trade deal that was agreed at the end of last year is likely to die because I don't think the Chinese are able to hold up their end of the bargain. I also think that the political atmosphere is becoming more and more toxic on this issue in both countries with an election in just six-month time. There is a strong incentive for President Trump to emphasize his anti-China policy because it is polling relatively strongly. Anti-Chinese sentiment is much greater today than it was two or three years ago. On the Chinese side, of course, there is the need to deflect blame away from China. And China has apparently been learning from the Russian playbook to do information warfare. So I think that's here and I feel like it's here to stay. 


Q: Does Cold War II mean that you think the tension between China and the U.S. is escalating in the west in general or even in the rest of the world? So it's like China versus the rest of the world, maybe?

A: I think China's been rather unwise in trying to engage in a rather crude propaganda effort. Particularly towards Europe, but elsewhere too - people aren't stupid and they can see what the Chinese government is trying to achieve. On the other hand, there are significant number of people in Europe who are quite anti-American, and who are, in fact, open to the Chinese argument that this is somehow all Donald Trump's fault. If you look at a recent opinion poll that was just published this week by the Korber-Stiftung, it's really rather remarkable to find that, when they're asked what is more important for Germany, 36% of Germans say having close relations with China and only 37% say having close relations with the U.S. In other words, they're about the same. That's a pretty remarkable change because in 2019, 50% said having close relations with the U.S. is more important, while 24% said China. So the Chinese aren't entirely failing. There's, a good deal of European receptiveness to Chinese arguments. And, unfortunately, many young Europeans are open to the argument that democracy can't address problems like climate change, or COVID-19 and authoritarian governments can. A recent poll showed that more than half of young Europeans think that only an authoritarian government can deal with the problem of climate change. So I think the Chinese haven't entirely united the world against them. On the contrary, I think quite a lot of people are receptive to Chinese arguments and disbelieving our arguments even when those arguments seem, well, quite grounded. 


Q: Is it the time to take sides at the moment. Do you think countries will put their economy first at the end of the COVID-19 crisis?

A: What I think of the desires in the minds of many Europeans and Asian countries is that they will try to avoid taking sides, if there's going to be a second Cold War. And they would rather be non-aligned. One hears this from all kinds of different sides. Relatively few countries see this as being a simple choice as it was in the First World War when you really didn't have to think too hard about whether you prefer Joseph Stalin to Harry Truman. It was only when the Soviet used force that people ended up on Stalin's side. This is different because people don't feel so strongly attracted to the United States as they used to. And they also find China in some ways attractive in a way that the Soviet Union really wasn't unless you were a committed communist. So I think what's going on here is that people say, "why can't we just have it both ways?", and avoid having to choose because we don't want to have to make that choice. What I hear when I visited Australia is the argument that, actually we do have to choose when it comes to the "crunch". There has to be only one choice, which is the U.S. because ultimately, China is a one-party state without any respect for individual freedoms or rights. We can't really look forward, at all, confidently to a world in which China is dominant in the Asia Pacific region. So, my sense is that gradually, people will realize that a Chinese-dominated world order would be a pretty unpleasant one in which there would not be much protection of individual rights or privacy. So yeah, I think things are shifting and I think that the pandemic has at least shown some Europeans the real sides - the real faces - of the Chinese Communist Party. 


Q: Based on historical lessons, what advice do you give to the global society to restore the economy after COVID-19?

A: I would begin by saying the sooner the lockdowns are ended the better, because they are an incredibly crude and disruptive tool and not a very effective one when it comes to containing a pandemic. I think the urgent priority must be to get as many people back to work as possible and to get much of the economy open as possible. I think that's perfectly durable, if you have a decent system of testing and contact-catching in place. If you don't have that in place, then it will be a lot harder. That would be step one. Step two, I think you have to recognize that the most important thing, when it comes to public health is clear communication to people of the "right thing to do". I think public communication in the Western world has been very poor in that there's been constant confusion about how best to handle the disease. The third thing that I think is really crucial is to realize that there can't be rapid recovery as long as many people are afraid. Franklin Roosevelt famously said at the beginning of his presidency, the only thing we have to fear is fear itself. That wasn't quite true but it's a good line. We have a fear problem now in the U.S. - people are afraid to go back to work; afraid to go out. We need to correct that because you can't have economic recovery when people are afraid to spend their money and afraid to leave their homes. So it's urgent we explained to people the nature of the disease and the correct ways in which to mitigate and minimize your risk of infection. We can't carry on with large parts of the economy simply shut down. The cost of doing that will just be far too high and we'll probably have more negative effects than any public health benefit.


Q: So how can the fear be lifted then?

A: Well, I think it's difficult in countries where people have been frightened by policymakers and epidemiologists predicting millions of deaths. The most important thing now is, I think, clear communication. One very important example of a bad communication was the idiotic idea that took hold in many parts of the United States that you should shut down public parks and beaches. This was enforced in California and in ludicrous ways, when the science was making it pretty clear that these spread indoors, not outdoors, and when in fact, people are better off with fresh air and sunshine. So we actually got to really improve the guidance that we give to people and explain to them that the ways of managing this disease are in fact, quite clear. Korea and Taiwan have shown U.S. how to do it. When I argue for contact-tracing in the U.S., I hear stupid arguments like well, "what about our privacy and what about our freedom?" I say "well, you'll just be locked in your homes for weeks on end, what kind of freedom is that?" This is a rational way of managing the disease that you would want to know if you've been in contact with an infected person. And don't you want to be able to warn your friends, if that has happened? So I just find the debates about the policy response here to be very ill-informed and the public is very confused. There's a lot of fake news out there and a lot of disinformation and misinformation. It seems to me that one of the crucial roles that a government plays in a crisis like this is clear communication to its citizens about the dangers they face, how best is it to prepare for them and avoid the dangers. And we've just done a shocking job of that. 


Q: When the COVID-19 crisis is over, hopefully soon, how do you think it will be viewed and taught about in the future?

A: Well if I have anything to do with it, I think it will be taught as a classic example of a public policy failure by bureaucracies that were simultaneous too large and too poorly-trained to do their job. We had an elaborate strategy for bio defense. We had an enormous number of government officials whose job this was. We had the Department of Health and Human Services, and Assistant Secretary for Pandemic Preparedness - and none of it works. So the key thing we need to learn here is that something's very wrong with our public health bureaucracy. And not only in the U.S., it's true also in the U.K. I think we should also teach students that history is a better guide than many other disciplines, because it was by studying history that I very quickly understood the danger that we were in, in January. Whereas people whose careers have been spent in social science or economics, were far slower to understand the danger that we were in. So yeah, we need to learn from history, because if we had only understood a little bit more about the history of pandemics, we might not have been so ready to believe the other Neil Ferguson, the one at Imperial College of London, when he said - "This is 1918. And we're going to have 2 million dead in America and half a million dead in Britain if we don't shut down the economy." A well-informed political class would have said, "Well, that's very interesting. But, a) it doesn't seem consonant with what we know from China so far and, b) where's, you know, your model? Could we please see how you arrived at this conclusion?" So I think the general inability of decision-makers in our government to have the right kind of knowledge and the right analytical tools is another thing that the pandemic has revealed.


Q: If the global leaders who have asked you for the history lessons at the moment, what would you teach them? Which part of history do you want to teach them?

A: Well, I just give you one example, of course. There's a single sufficient answer to the question. In 1957, a large influenza pandemic swept the world and the administration of President Dwight Eisenhower dealt with it in a far more competent way than our government has dealt with this pandemic. I think the two cases are comparable because I think the danger posed by COVID-19 is about the same as the danger posed by the 1957 pandemic of influenza. So if you study what happened then you realize how much quicker the response of the government was in 1957 and how much more rationally, they thought about the problem. They didn't lock down the economy. They didn't really close any schools. They informed the public about the new influenza and they worked frantically hard to get a vaccine, which they were able to do within two months - two months after the first news of the influenza reaching the United States. As a result, the impact on the U.S. economy of the pandemic was very minimal. There were extra steps, but the overall impact was much, much less than the impact of today's crisis. So I think we need to learn from the experience of a more competent and efficient era of how to deal with this kind of challenge without essentially self-destruction, which is I think what we've been doing.


By Han Yea Kyung, deputy editor & Yoon Sunyoung, researcher​