Cooperation is needed in dealing with the economy and COVID-19
Chen Jiahe

Editor's Note: Chen Jiahe is the chief investment officer at Novem Arcae Technologies. The article reflects the author's opinions, and not necessarily the views of CGTN.

Affected by COVID-19, the world economy has seen one of its worst years in history. The development of the economies of countries are now closely connected with their degree of curing the pandemic. To bring the global economy out of the trough, it is now necessary to do two things: the containing of the COVID-19 and the cooperation rather than separation between economies. In fact, there are close connections between these two things.

When we look at the global economy, it is easy to find that, for those countries where the COVID-19 has been better contained, economic development speeds usually turn out to be more optimistic.

For example, in South Korea, where the newly affected cases are contained within a few hundred a day, the economic growth rate for the third quarter is -1.3 percent, making the economy staying at roughly the same place compared with one year ago.

In China, where there are almost no local affected cases discovered, the GDP grew by 6.2 percent in the 3rd quarter of 2020, making the country the most promising economy in the world.

In countries where COVID-19 seems out of control, the GDP growth rate has become disappointing. In Brazil, the GDP growth rate went down by 11.4 percent in the second quarter of the year, where tens of thousands of people are catching the disease every day.

However, we can not make a simple conclusion that as long as a country is able to contain COVID-19 within its own borders, it can have a good GDP growth rate and can leave the rest of the world alone. The world is now a connected place and every economy depends on each other to thrive.

For example, although New Zealand has been one of the world's safest places regarding the spreading of the virus, its GDP growth rate still reached -10.1 percent in the second quarter. The reason is that New Zealand is heavily reliant upon its tourism industry. The slowing down of the global economy, as well the cooling of the global tourism industry, has hit the country's economy considerably hard.

The disconnect between economies can have a devastating effect to the well-beings of countries. The diversification of production and the global trading system that is relying upon this diversification will be destroyed. The productivity of economies will be reduced.

Vaccine for diphtheria, tetanus and whooping cough may be giving kids protection against COVID-19. /Getty

Vaccine for diphtheria, tetanus and whooping cough may be giving kids protection against COVID-19. /Getty

In a hypothetical case where countries are totally separated from each other and no more trade is conducted, every country will have to produce everything that it needs, rather than concentrating on the products that the country has the best comparative productivity. The production efficiency for the global economy as a whole will decrease and the economic development level of every country will eventually fall, with or without the containing of COVID-19.

Furthermore, the task of containing COVID-19 also needs close international cooperation rather than separation.

For example, China can obtain a lot of benefit by cooperating with economies such as Western Europe and North America regarding the task of developing a vaccine. Furthermore, if the virus is completely wiped out of the world, China will be much safer as it no longer has to worry about the effect of the virus in any aspect.

On the other hand, the cooperation between economies shall not be only be considered as the trading of goods. The exchanging of technology is also important.

Without an exchanging system for technology, for example a fair and efficient market where everything can be priced and exchanged, every country will still have to isolate its own development of technologies and will then be forced to develop every technology by itself. This means a great deduction of efficiency and the best technologies that can be achieved with a cooperation system will no longer be available.

In fact, when there is no trading or cooperation between economies, some of the most leading technologies that we are having today might not even exist.

Leading technologies don't just come out of nothing. They are discovered or created because there is enough demand. With enough demand from a large market, say a market that contains every country in it, there will be enough investment, therefore the leading technologies will be created. If there is no market, or if there is only a small and fragmented market rather than a global market, many of the leading technologies we see today might not even exist.

While the global economy and the countries on this planet need cooperation rather than separation and isolation, international organisations and meetings such as APEC, G20 and BRICS meeting shall be the ones that spread out the right ideas for countries. Only with cooperation and free trading can we develop our economies and defeat our common enemy, i.e., the COVID-19 disease, and finally restore prosperity to the global economy.

(If you want to contribute and have specific expertise, please contact us at