Charlotte Street Partners



The lazy man's guide to a new cold war

Written by Scott Reid, associate partner
Edited by David Gaffney, partner
23 April 2020

Good morning,

As far as relations with the west are concerned, it would be fair to say that China has not been having a ‘good’ crisis.

In fact, having already been accused of spreading the “Wuhan flu”, being “number one” on the death list and facing accusations of attempting to buy-off European nations through so-called “mask diplomacy”, Beijing is seen as the villain of the piece by many.  
That Donald Trump has emerged as blamer-in-chief matters. As leader of the free world (at least in theory), he treads where others undoubtedly follow. Take Missouri; the midwest state suing China for “not doing enough”, a move that China yesterday labelled “absurd” and legal experts “just not possible”.

But beyond Main Street’s halls of power, and the inevitable contest to determine who can besmirch China best come November’s US presidential election (a contest Joe Biden has also entered, by the way), the blame game has consequences. Yesterday, US secretary of state Mike Pompeo accused Beijing of wilfully destroying coronavirus samples as part of a cover-up in the early days of the outbreak while senior Tories in the UK also called for a root-and-branch “reorientation” away from the country.

But what does the evidence tell us? So far the rhetoric about China’s role has been mired in speculation and a fairly gung ho approach to facts by certain politicians. It’s certainly easier to point the finger or talk of “mass cyber surveillance” abroad than fess up to mistakes made on home turf where our current predicament is concerned.

And so, coronavirus or no, three facts remain true. China still accounts for around 20% of global GDP, is still on course to become the world’s largest economy by 2030 and, if anything, the west’s connection with China’s citizens has only become stronger since 2008 as its economies have grown accustomed to a constant supply of shiny new iPhones or middle-class students seeking a university education.

While questions must be asked, the west should ponder those realities when it starts jabbing fingers in China’s direction. We play the lazy bloc politics of a new cold war at our peril.


England’s chief medical officer has warned that the UK faces “very socially disruptive” restrictions on daily life for many months. Chris Whitty said that the chances of developing a vaccine for Covid-19 “in the next calendar year are incredibly small and I think we should be realistic about that.” The UK death toll rose to 18,100 yesterday, with the global figure more than 184,000.
Iran’s Islamic Revolution Guard Corps has claimed the successful launch of its first military satellite into orbit yesterday. Although the launch has yet to be verified independently, US secretary of state Mike Pompeo has said the act violated a UN resolution and required “accountability”.
Face masks have been made compulsory to wear in public across Germany. LINK Bremen was the last federal region to back the measures yesterday with a confirmatory vote set in its local senate for Friday. The ruling makes mask use compulsory for those travelling on public transport and  shopping.
Elsewhere in Germany, the Mainz-based biotech company BioNTech, in association with Pfizer, has become the first European business to proceed with clinical trials for a Covid-19 vaccine.

Business and economy

The governor of the Bank of England has added his voice to calls for the UK lockdown to remain in place until it is clinically safe for activity to resume in the economy. Andrew Bailey said a premature end to the lockdown increased the risk of a second wave which would “damage people’s confidence very severely”.
Severin Schwan, the chief executive of the Roche pharmaceutical giant, has suggested persistent underinvestment in UK healthcare is hampering its response to Covid-19. Schwan said that “partnership with the government is excellent, but you can’t fix the infrastructure in a couple of weeks”. Roche is currently a key partner to UK government and Public Health England in increasing testing for coronavirus.

Columns of note

Today’s big read in the Financial Times looks at the changing role of call centres under Covid-19. The article looks at the increasing use of AI-powered voice technology under rising call centre demand, and offers a novel viewpoint that human-to-human interaction will increasingly constitute skilled labour.
And in The Atlantic, Joe Pinsker takes a light-hearted look at the seemingly innocent fibs we are  telling one another to avoid endless social interaction on camera during the lockdown.

Cartoon source: The Telegraph


What happened yesterday?

Global oil price shocks remained the key influencer on international equity markets, with Brent crude falling to below $16 a barrel during the session and hitting its lowest level since 1999.
In London, however, the FTSE 100 ended the session up 2.3% at 5,770.63 points, regaining some of the previous day’s sharp losses. Sterling was stronger on both the dollar by 0.22% at $1.23 and by 0.51% on the euro at €1.14.

In domestic economic news, the Office for National Statistics showed UK consumer price growth fell to 1.5% in March from 1.7%, due to lower fuel and clothing prices in the run up to lockdown.

And in company news:
Ryanair’s chief executive Michael O’Leary announced that the airline would not return to flying if social distancing measures meant middle seats on its aircrafts must be empty. O’Leary suggested 40% of flights could resume flying in European air space from July, climbing to 80% by September.
US airline Delta refused further finance for Virgin Atlantic, in which it holds a 49% stake. The move left Sir Richard Branson suggesting Virgin Atlantic would collapse without at least £500 million in UK government support.

What’s happening today?

Alfa Fin
Walker Greenbnk

Trading announcements

Afc Energy
Cls Hdgs
Croda Intl
Domino’s Pizz
Jpmorgan Clav
Md Medical S
N4 Pharma Plc
Redx Pharma
Taylor Wimpey
Tullow Oil

Int. economic announcements
(13.00) Initial Jobless Claims (US)
(15.00) New Homes Sales (US)

Source: Financial Times

did you know

In early 20th century Scots, curryhaikie is a word used to describe the lifting and carrying of a tired child.

Parliamentary highlights

House of Commons

No business scheduled

House of Lords 

Oral questions
Ensuring government support for the self-employed during the COVID-19 pandemic is sufficient – virtual proceeding – The Earl of Clancarty
Impact of COVID-19 on the UK music sector and the creative economy – virtual proceeding – Lord Black of Brentwood
Plans to repeal the Vagrancy Act 1824 – virtual proceeding – Lord Young of Cookham
How many UK manufacturers are in place to ensure an adequate supply of personal protective equipment is made available to the NHS and carers in all regions of the UK; and what direct contact the government have had with manufacturers based in the North of England – virtual proceeding – Baroness McIntosh of Pickering
Private notice question
Covid-19: PPE – virtual proceeding – Baroness Smith of Basildon
Short-term and long-term impact of the Government’s approach to the COVID-19 pandemic on the provision and delivery of social and domiciliary care for disabled and vulnerable people, and the need to ensure the sustainability of social care services – virtual proceeding – Baroness Wheeler
Short debate
Impact of the COVID-19 epidemic on the prison population and offender rehabilitation programmes – virtual proceeding – Lord German

Scottish Parliament 

Members’ Virtual Question Time
Education and Skills

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