SINGAPORE (Apr 17): Amid the Covid-19 pandemic, more than a thousand people are dying day after day, unemployment is nine times greater than in 2008, and yet the US stock market continues to rally. This is an apparent disconnect between economic reality and the market. Surely, at some stage, the American market will wake up with a genuine shock and reconnect with reality.

When it does, the impact on regional markets, on investment flows and supply chains, and on China’s recovery will be as rapid and substantial because blowing down the deserted canyons of Wall Street is the idea that the US must disconnect from China and punish China.

With all the adverse economic impact, this idea is reminiscent of the Vietnam War period and the infamous American claim: “We must destroy the village to save it.” This American momentum to isolate, disconnect and punish appears to have dire consequences, not just for China, but also the US economy and for countries that wish to continue to do business with China.

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