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Managing COVID-19 transmissions in post-lockdown China

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Authors: Siyu Chen, Shanghai and Minh Cuong Duong, UNSW

COVID-19 emerged in Wuhan in December 2019, a few days before the Chinese Spring Festival. The three billion trips via China’s mass transit system during the Spring Festival travel rush may have contributed to its spread across the country. But in late March, China declared its COVID-19 peak over as Wuhan reported zero new cases for seven consecutive days. This was followed by the lifting of Wuhan’s lockdown on 8 April. However, a majority of China’s new cases are now imported, prompting a two-pronged strategy to control both imported cases and potential domestic transmission after lifting lockdown.

The Shanghai Stock Exchange building in the Pudong financial district in Shanghai, China 28 February, 2020 (Photo: Reuters/Aly Song).

In the effort to resume production, lifting the lockdown of Wuhan was based on risk evaluation. Local authorities continue to publish outbreak information to reduce the risk of a COVID-19 resurgence. Awareness has been increasingly raised about the ongoing spread of the pandemic and risks of regional outbreaks. There are continued efforts to uncover confirmed and asymptomatic cases. Hubei province continues to practice timely treatment of severe patients and conducts epidemiological investigations. People engaged in teaching, medical work, public services and transportation are required to undertake nucleic acid tests before leaving Wuhan, while other groups are encouraged to be tested.

To curb domestic spread, a QR-based health code was developed and integrated into a mobile phone application used by one billion Chinese citizens. This colour-coded system requires people to have a green code — indicating little chance of being infected after the quarantine — to travel domestically. A yellow code indicates a medium risk of being infected and a red code indicates high risk. People with yellow codes must undertake a 14-day quarantine at home and report their health condition daily, while those with a red code must undertake a 14-day quarantine in isolation centres.

Health codes are also used for residents to enter public areas or public transportation. Despite the effectiveness of the health code in controlling COVID-19, there are concerns about privacy. It is likely that relevant measures are in place to secure personal information in accordance with the Internet Security Law.

Mask-wearing, temperature checking and social distancing policies still remain. Factories and offices require staff to report health conditions daily, disinfect hands and shoes before entering buildings and ensure fresh air ventilation for enclosed spaces. Disinfection of public places is conducted twice daily.

Although there is serious legal punishment for non-compliance with preventative measures like ignoring compulsory quarantine and social distancing orders, many are still non-compliant. Maintaining community compliance with preventative measures requires ongoing community education and strategies to address impacts on mental health and wellbeing arising from social distancing.

Strict measures remain at international airports and unnecessary personnel flow is minimised. Prior to arriving in China, passengers must submit online their travel history and health conditions. Incoming travellers arriving in major or border cities are subject to a mandatory 14-day quarantine with free daily supplies. Two free nucleic acid tests and one serum antibody test are performed and those who test positive are immediately transferred to treatment centres.

Non-infected people are also required to undertake a 14-day self-isolation at home after leaving the isolation centres. Foreign entry was suspended on 28 March to curb imported cases. Medical experts continue to be dispatched to border provinces to support disease control. Harsh punishments are also applied for non-qualified production and price gouging of preventative equipment to ensure adequate supply and quality of essential medical supplies.

Despite efforts, the city of Suifenhe on the China–Russia border has experienced a spike in imported cases. This led to the closing of China’s border with Russia and implementing a lockdown in Suifenhe. Lifting lockdowns does not mean entirely lifting containment measures. Ensuring community compliance remains crucial but challenging.

It is also important to mitigate fear and discrimination directed toward persons affected by COVID-19 — a lesson learned from the previous SARS outbreak. China also acknowledges the importance of support being given to Wuhan graduates and minimising discrimination among job hunters within hard-hit areas.

Communities can also be protected against COVID-19 through herd immunity induced by either widespread vaccination, which is unavailable at this stage, or individuals recovering from COVID-19 developing natural immunity against the virus. But this option seems unreliable as the numbers of COVID-19 cases and deaths in Sweden — a country that aimed to achieve herd immunity — are much higher than neighbouring Norway and Denmark, where stringent approaches are being taken.

Given China’s effective response to the pandemic, it is likely that healthcare will become a new strength in China. This includes healthcare human resources, infrastructure, training, big data, research and technology development required to meet future health crises.

Siyu Chen is a clinical doctor based in Shanghai and graduate of the School of Public Health and Community Medicine, The University of New South Wales, Sydney.

Minh Cuong Duong, a physician and epidemiologist based in Sydney, is an Associate Lecturer at the School of Public Health and Community Medicine, The University of New South Wales, Sydney.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.



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ASIAN (H)

India’s pivot to the United States

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Author: C Raja Mohan, NUS

At a time when much of Asia is reconciling itself to the regional dominance of China and increasing political distance from the United States, India is going the other way — moving into an ever-closer partnership with the United States and making a more intensive effort to balance China in the Indo-Pacific.

India's Prime Minister Narendra Modi waves next to U.S. President Donald Trump as they attend the "Namaste Trump" event at Sardar Patel Gujarat Stadium, in Ahmedabad, India, 24 February 2020 (Reuters/Francis Mascarenhas).

The reorientation of India’s great-power relations is driven by two factors. One is the rise of China and Delhi’s growing power imbalance with Beijing. The other is Prime Minister Narendra Modi’s success in overcoming the entrenched anti-US sentiment in the Indian political and bureaucratic establishment.

The rise of China has become the single most important challenge facing India. Although India has a long record of befriending China, it has found Beijing largely unresponsive to Indian concerns. And as the gap in comprehensive national power widens in favour of Beijing, the traditional perception in Delhi of a broad parity with China has become unsustainable.

It is being replaced by the recognition that China is bound to expand its influence in India’s near and extended neighbourhood at Delhi’s expense. Meanwhile, the wider the gap, the less the incentive for China to settle the dispute over the long and contested frontier between the two nations in Tibet and Xinjiang.

China has not been responsive to India’s demands for more balanced bilateral trade (the trade deficit with China was running at around US$50 billion in 2019). More broadly, Delhi is coming to terms with the fact that it can no longer rely on Russia to balance China as it did from the 1960s to the 1990s. Delhi now sees Moscow drifting into a tighter embrace with Beijing.

That has made a closer security partnership with the United States a central theme of India’s foreign and security policies in the past few years. Along with growing volumes of bilateral trade (US$160 billion in 2019) and increasing purchases of US defence equipment (at a cumulative figure of $20 billion over the last two decades), Delhi has opened up to greater interoperability between the armed forces of the two nations, intensive counter-terror collaboration and political cooperation in the region and beyond.

That a significant expansion of India–US security cooperation took place under Narendra Modi remains an interesting political puzzle.

The Bharatiya Janata Party (BJP) was by no means enthusiastic about building a strong relationship with the United States. The BJP aligned with the Communists in opposing the civil nuclear initiative with the United States and sought to bring down the Manmohan Singh government during 2005–08. If Manmohan Singh was hobbled by opposition to a US partnership from the Communists and much of the Congress party itself, Modi had to cope with the deeply held wariness about the United States among Hindutva ideologues.

Substantive opposition to engagement with the United States came from the bureaucratic establishment. Large sections of the Ministry of External Affairs, the armed forces, the Defence and Home Affairs ministries and the science bureaucracy were sceptical of collaboration with the United States and had argued against any major change of policy that would strengthen ties with Washington. Multiple levels of opposition meant even the simplest elements of cooperation with the United States could not be advanced during the United Progressive Alliance (UPA) years (2004–14).

It is quite evident now that Modi came into power in 2014 with a determination to change this situation. From inviting a US president (Barack Obama) as the honoured guest at India’s annual Republic Day celebrations to flipping India’s position on climate change to work with the United States, Modi took steps that were previously inconceivable.

It was one thing to move forward with the United States but entirely another to publicly flaunt the bonhomie with Washington. In two large rallies — one in Houston with the Indian American community during September 2019 and one in a massive public reception for President Donald Trump in Ahmedabad in his home state, Gujarat, in February 2020 — Modi celebrated the special relationship and proclaimed the United States to be India’s most important partner.

Modi is acutely aware of the pitfalls of relying too much on the United States for India’s security. He is conscious of the current turbulence in US domestic politics and the prospect for quick shifts in US external orientation. Therefore, Modi is eager to retain the traditional security partnership with Moscow and carefully manage the difficult and increasingly asymmetric relationship with Beijing.

As the China challenge remains relentless, Delhi has no option but to compete with Beijing without locking itself into a costly confrontation. Modi is also aware that Washington and Beijing will always be tempted to arrive at some mutual accommodation that might not always be in the interests of China’s neighbours. As he copes with China’s rise and hedges against US unpredictability, the Indian Prime Minister is also eager to develop stronger ties with other middle powers like France, Japan, Vietnam, Indonesia and Australia.

Under Modi, Delhi has learned to discard its many traditional inhibitions in its dealings with Washington and instead to seize opportunities to strengthen India’s own position among the great powers.

C Raja Mohan is Director of the Institute of South Asian Studies at The National University of Singapore.

A longer version of this article appears in the most recent edition of East Asia Forum Quarterly, ‘Middle Power Game’, Vol. 12 No. 1.



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ASIAN (H)

Can China be sued for COVID-19?

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Author: Natalie Klein, UNSW

As the death toll and economic costs of the COVID-19 pandemic spread, the question about who should pay is coming to the fore. A conservative British think tank, the Henry Jackson Society, recently released a paper setting out China’s international responsibility for COVID-19 and the possible legal responses. German newspaper Bild called for China to pay trillions in damages.

A woman wearing a protective mask is seen past a portrait of Chinese President Xi Jinping on a street as the country is hit by an outbreak of the coronavirus, in Shanghai, China 12 March 2020 (Photo:Reuters/Aly Song/File Photo).The US state of Missouri commenced legal proceedings against China while a class action has been instituted in the United States. The latter claims US$6 trillion in damages and argues that China deliberately withheld information and failed to contain the virus. Other US lawsuits accuse China of hoarding medical supplies and deliberately developing the virus.

The likelihood of these cases succeeding is very small. The key barrier to their success is that governments and their officials enjoy foreign sovereign immunity before national courts. This immunity means that individuals cannot sue foreign governments for their sovereign actions. The commercial actions of a foreign government may be judged before a national court in some instances, but it is likely that China has sovereign immunity from these suits.

Residents of New York — severely affected by the virus — have instituted proceedings against the World Health Organization (WHO) in local courts. But international organisations similarly enjoy immunity from prosecution in national courts.

The United States has on occasion rolled back sovereign immunity before its courts. The notable example is the billions in damages being awarded to victims of Iran’s alleged terrorist activity. Legislative changes allowed lawsuits against Iran and its central bank to proceed. Iran has since challenged these decisions before the International Court of Justice (ICJ).

Countries may wish to consider whether an international case could be brought against China. Unlike national courts, China would not be protected by sovereign immunity before an international court. Litigation before international courts such as the ICJ, however, require state consent. That consent may be previously agreed to in an international treaty or may occur on an ad hoc basis for the purposes of resolving a specific dispute.

China is accused of violating its international legal obligations as set out in WHO International Health Regulations in its handling of the initial stages of the COVID-19 pandemic. Those regulations contain a dispute settlement clause but do not allow for litigation in the absence of China’s consent. It is unlikely that China would agree to litigation, so only negotiations can be pursued.

One possible avenue to proceed before the ICJ would be based on the WHO Constitution. This would allow cases concerning the interpretation or application of that constitution to be referred to the court. But linking a claim about China’s conduct in relation to the COVID-19 pandemic and a treaty that primarily addresses the structure and membership of the organisation is tenuous and unlikely to prevail.

There are two other instances where China has agreed to an international court’s jurisdiction.

First, China consented to jurisdiction before international courts for issues concerning the UN Convention on the Law of the Sea (UNCLOS). Though claims about the pandemic do not fit readily under this treaty. Compensation is not often awarded as a remedy in these disputes either. The Philippines instituted proceedings against China for its activities in the South China Sea under UNCLOS. Although China was subject to the tribunal’s jurisdiction, it refused to participate in the proceedings and denounced the award as null and invalid.

Second, China consented to resolving international trade disputes under the WTO Dispute Settlement Understanding. China participates in these proceedings but they relate to claims where trade benefits have been nullified or impaired.

Where states, including China, have taken trade measures to respond to the economic consequences of the pandemic, questions may arise as to whether they are consistent with international trade rules. Yet the outcome of these proceedings is not typically compensation but the discontinuation of the unlawful trade measures.

While litigation may not be feasible either nationally or internationally, international law offers other means of dispute settlement. The inquiry supported by Australian Foreign Minister Marise Payne reflects another avenue of dispute resolution. Shedding light on what actually happened may inform the changes needed to ensure the current crisis is not repeated. But it does not make it more likely that China will pay compensation.

Efforts at litigation or less confrontational methods of inquiry might put enough political pressure on China to consider some form of payment. This might take the form of an ex gratia payment, where China denies international responsibility but still makes a payment to resolve the dispute. Australia followed this course of action in relation to Nauru and its claims of economic and environmental devastation from phosphate mining.

Another option might be the establishment of a mass claims commission. This sort of mechanism was established to pay compensation for Iraq’s invasion of Kuwait. It was established by the UN Security Council and compensation was paid from the sale of Iraqi oil. Though since China is a permanent member of the UN Security Council, it could block any comparable initiative.

Essentially, without China’s cooperation, it is extremely unlikely that it will be forced to pay any compensation for the COVID-19 pandemic. Ultimately, focusing on efforts to blame China risks detracting attention and efforts that are otherwise urgently needed to respond to the crisis.

Natalie Klein is Professor of Law at The University of New South Wales, Sydney.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.



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COVID-19 highlights the plight of Malaysia’s refugees

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Author: Thomas Daniel, ISIS Malaysia

Malaysia’s COVID-19-induced Movement Control Order (MCO) has caused severe hardships for refugees and asylum seekers in the country. Most work informally and earn daily or weekly wages, with no job protection. Many were made redundant and are now highly reliant on aid from NGOs and well-wishers.

Rohingya refugees wearing protective masks keep a social distance while waiting to receive goods from volunteers, during the movement control order due to the outbreak of the coronavirus disease (COVID-19), in Kuala Lumpur, Malaysia 7 April, 2020 (Photo: Reuters/Lim Huey Teng).

Malaysian law lumps refugees and asylum seekers together under a broad definition of ‘illegal immigrants’, a group that has little legal protection. There were 179,520 refugees and asylum seekers registered with the UNHCR at the end of March 2020, but the number of those unregistered is said to be at least half a million.

The pandemic, difficulties brought by the MCO, the prospect of more refugee boats arriving and longstanding local grievances have led to an explosion of xenophobic sentiment towards refugees. The Rohingya are a prime target for most of the hate. These developments underscore the longstanding need for a comprehensive and transparent policy to regularise and manage refugees and asylum seekers in Malaysia.

The challenges are neither new nor directly caused by the pandemic. They are the result of years of systemic policy gaps that allowed precipitating underlying issues to fester. The problem is further aggravated by stakeholders — the government, international organisations, NGOs, the private sector and refugee associations — working in silos, rather than with each other. In some cases, the relationship between these stakeholders is hamstrung due to a lack of trust.

In examining the management of refugees in Malaysia, Ariane Jeffrey aptly described it as a ‘policy of not having a policy’. There are several reasons for this. Policymakers are dead set against ratifying the 1951 Convention on the Status of Refugees and its 1967 Protocol, as ratification is seen as compromising Malaysia’s sovereign right to formulate policies on refugees and asylum seekers. There is no desire to tie Malaysia to international obligations, although Malaysia is happy to do what it can on a humanitarian basis.

Policymakers also subscribe to the floodgate theory. Any perceived softening of Malaysia’s stance on refugees and asylum seekers, it is thought, will attract more to Malaysia’s shores. There is also concern of a political backlash from voters, who worry they will have to compete with refugees for jobs and limited government resources, and that refugees will demand rights such as naturalisation in the future.

Policymakers are also aware that Malaysia is no longer just a transit point for refugees and asylum seekers but a final destination for some — especially the Rohingya.

It is in Malaysia’s interests to have a comprehensive policy in place to manage its refugees. Having a large number of unregistered foreigners in a country, with little information about their demographics, background, movement and jobs is a real security and social challenge. Some in the Rohingya community, for example, are prime recruits for extremist groups. Others have brought their communal feuds with them.

Managing the impact of the pandemic on a vulnerable, dispersed group like refugees and asylum seekers also poses a challenge. Their living conditions are less than ideal due to hygiene issues and overcrowding. A majority of those that have yet to be screened from Malaysia’s single biggest COVID-19 cluster, a religious gathering on 28 February, are Rohingya asylum seekers. They also make up a large majority of the 16,000 people in an area of Selayang, a northern municipality in Kuala Lumpur which has been put under an enhanced MCO.

Despite the efforts of refugee associations and NGOs, many were afraid to come forward and consequently were not screened for the virus. A history of neglect and abuse means that most live off the grid and are averse to authorities. This makes contact tracing difficult. The May Day arrest of several hundred undocumented migrants in an area under an enhanced MCO further complicates this task.

So, what should a refugee policy for Malaysia entail?

First, it needs to incentivise all refugees and asylum seekers to be registered in a biometric database that includes health and security checks. This can be done in collaboration with the UNHCR, which has a comprehensive Refugee Status Determination process for their cardholders.

Second, there should be limited permission for refugees to work legally with some protections. Unlike previous failed efforts, this needs to be done in consultation with the private sector and refugee associations.

Third, stakeholders must put their differences aside to develop and implement a sustainable refugee policy. It is unrealistic to expect the Malaysian government — and by extension taxpayers — to pick up the tab. The cost must be shared with international organisations and the private sector.

Down the road, policymakers should consider options like skills training, as this will help prepare refugees for resettlement in third countries or to return home if conditions permit. Malaysia should also redouble its efforts to engage with neighbouring countries to form a regional burden-sharing arrangement. There is a need for tighter border controls and a genuine effort to dismantle both foreign and local syndicates who smuggle in refugees and asylum seekers.

Malaysia can formulate such a policy through executive decisions and by amending existing laws even without signing up to the 1951 Convention and 1967 Protocol. In practice, Malaysia already adheres to some of its stipulations, which is more than can be said of some signatories. Any policy should also take into account Malaysia’s particular security and political concerns. Sovereignty and national interest need not and should not be a trade-off.

With a well-thought-out policy in place, Malaysia can finally make real progress on addressing not just the plight of refugees and asylum seekers, but also the significant security and social implications of hosting large numbers of unregistered migrants. Perhaps this will go some way to nipping emerging xenophobia towards one of the most vulnerable groups in Malaysian society.

Thomas Daniel is a Senior Analyst in the Foreign Policy and Security Studies Programme at the Institute of Strategic and International Studies (ISIS) Malaysia.

This article is published in a series partnership with The Singapore Institute of International Affairs on the novel coronavirus crisis and its impact in Southeast Asia.



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Sino–US rivalry bedevils global COVID-19 cooperation

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Author: Editorial Board, ANU

At the start of the year Donald Trump was poised to run for re-election in November on the back of a strong economy and jobs. Since then COVID-19 has crippled the US economy. The unemployment rate is expected to exceed 20 per cent, rivalling the worst period of the Great Depression. At the same time, America’s lack of accessible healthcare and epidemic preparedness has resulted in a mortality rate much higher than in other countries. Americans are losing jobs by the millions and dying by the tens of thousands.

US President Donald Trump talks about preparedness to confront the coronavirus outbreak in the Cabinet Room of the White House in Washington, 27 February 2020 (Photo: Reuters/Leah Millis).

Trump’s re-election campaign team wants to direct the blame for his country’s woes at China and cast him as a leader who saved the United States from even worse China-afflicted pain. Trump and his team have pushed a far-fetched story about the virus originating in a Wuhan lab. Administration officials including Vice President Mike Pence refer to the coronavirus as the ‘Chinese virus’. Trump has recently upped the ante, calling it the ‘Plague from China’ and saying that ‘100 trade deals wouldn’t make up for [the damage that has been done]’. The following day, on Fox News, Trump suggested that ‘we could cut off the whole relationship’.

Beijing has reacted with haste in seeking to control the coronavirus narrative. While admitting to early mistakes (blaming them on local officials), China’s leaders have sought to burnish their government’s credentials in leading an effective response to COVID-19, resulting in a lower infection and mortality rate than many richer countries, including the United States. When Trump lashed out at the World Health Organization (WHO) for incompetence and being ‘too close’ to China, subsequently halted US financial contributions, China stepped in with an additional US$30 million. Beijing has also provided aid to assist other countries, including the United States, respond to the virus.

Beijing has taken the opportunity to push its credentials as a responsible global citizen, in the process overreaching in its effort to control the narrative. It has mobilised ‘wolf warrior’ diplomats to pressure foreign governments into praising Beijing’s coronavirus response. China’s state media has attacked senior US officials by name, including US Secretary of State Mike Pompeo, and threatened sanctions against US politicians associated with anti-China litigation related to COVID-19. And, in one jaw-dropping moment, a spokesman for China’s Ministry of Foreign Affairs suggested that the virus originated not in China but was instead brought there by the US military.

As US–China relations deteriorate and the WHO becomes a football for the two countries’ rivalry, the potential for global coordination on COVID-19 is undermined. As Suisheng Zhao points out in the first of our feature essays this week, US–China rivalry prevented the United Nations Security Council (UNSC) from formulating a response. In the past, Zhao notes, the UNSC helped establish the Global Fund for AIDS, Tuberculosis, and Malaria. It also passed a resolution in 2014 declaring the Ebola epidemic in West Africa a ‘threat to international peace and security’, leading to the creation of the UN Mission for Ebola Emergency Response — the first UN mission to address a public health crisis.

In another feature essay this week Jia Qingguo worries that the current diplomatic standoff between Beijing and Washington is likely to continue for the foreseeable future. He sees no end to Trump’s anti-China stance in the year of his re-election campaign (Trump boasted on Fox News he could save America US$500 billion by cutting off the relationship with China) and no way that Beijing will back down from its equally muscular response. Even intervention by the two great helmsmen seems unlikely. Trump spoke of his ‘very good relationship’ with Xi Jinping, but said ‘right now I just don’t want to speak to him’.

The extent of the economic fallout from COVID-19 and souring US–China relations is difficult to gauge. In the third of our feature essays this week, Justin Yifu Lin examines China’s options for responding to the economic challenges, optimistic that China can still achieve GDP growth of 3-4 per cent in 2020 despite IMF forecasts that global growth will change by a similar amount in the opposite direction. Lin observes that COVID-19 has imposed both demand and supply-side economic destruction. He advocates investment in infrastructure to create jobs, but also calls for support of household consumption in the form of vouchers and cash transfers to low-income households, similar to income support that some Western countries have introduced.

According to Lin, ‘the Chinese government should take advantage of its favourable fiscal and monetary policy space to stabilise the financial system, increase credit to help enterprises, invest in new infrastructure and provide necessary support for families adversely affected by the pandemic. These measures will help to expand domestic demand, maintain social stability and eliminate the bottleneck of future economic growth’. If China can get its policies right, and achieve a reasonable rate of growth, Lin thinks there’s a chance that, just like after 2008, ‘China will drive the world’s economic growth and recovery as it emerges from the coronavirus crisis’. Lin leaves offers hope that, even if 2020 remains annus horribilis, 2021 could bring some cheer.

Yet a V-shaped economic recovery, in China or globally, is a faint hope without the invigoration of international cooperation in beating or managing COVID-19 and economic recovery policy strategies. The challenge for the rest of the world is to catalyse that in the midst of US–Chinese bickering.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.



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China’s diplomatic response to COVID-19

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Author: Jia Qingguo, Peking University

The term ‘responsible power’ is finding its way into Chinese official lexicon more frequently — including in President Xi Jinping’s report to the 19th party congress. But being a responsible power is easier said than done. As China’s experience with the outside world since the outbreak of COVID-19 testifies, it can be difficult and even traumatic.

A man wearing a protective mask passes by a billboard depicting Chinese President Xi Jinping as the spread of the coronavirus disease (COVID-19) continues in Belgrade, Serbia, 1 April 2020. The text on the billboard reads 'Thanks, brother Xi' (Photo: Reuters/Djordje Kojadinovic).

Beijing is fighting the virus at home and fending off suspicions and criticisms overseas. Despite its success in containing the virus — following a short period of hesitation and confusion — and its unprecedented assistance to others when the epidemic became a global pandemic, China is not receiving recognition or appreciation for these efforts it thinks dues. Instead, China is receiving much ridicule and accusations of bad faith, especially from the United States — probably the largest recipient of medical supplies from China.

When infection of COVID-19 began in Wuhan in December 2019, people knew very little about the virus. The Wuhan government was caught completely unprepared and initially refrained from taking tough measures to control the virus.

The delay in taking more effective measures to address the epidemic turned out to be lethal. Soon the virus took over the city and spread beyond it. Then Beijing stepped in. It sacked Wuhan’s leaders and took unprecedented measures to contain the virus, including locking down the city of 17 million, sending more than 40,000 medical staff and huge quantities of medical supplies, quickly building two large temporary hospitals and imposing the strictest social distancing policies in history nationwide. Except for essential industries and services, the country was shut down.

As more people were infected and died in China, popular frustration mounted and complaints filled internet chatrooms. People were frustrated with the delay in an official response, the treatment of Dr Li Wenliang who warned his friends and colleagues about the virus, and the difficulty in accessing medical treatment. Against a background of soured relations between China and the United States and increasingly critical views of the West on Chinese politics and foreign policy, the Western media had a field day covering these complaints.

On 31 January, the United States led the world in imposing a travel ban on foreigners who had been in China in the previous 14 days. The United States ramped up hostile action against China, including passing the so-called Taipei Act. Promised US official assistance did not arrive.

Confronted with domestic and international pressures, Beijing took a two-pronged approach to its foreign relations.

First, it engaged in international cooperation. Soon after it realised the severity of the situation, it updated the World Health Organization (WHO) and the United States on the crisis, shared the gene sequence of COVID-19 (as soon as its scientists were able to identify it) and agreed to the WHO’s request to send investigators to China.

Second, Beijing went out of its way to fight the Western smear campaign. To counter the conspiracy stories coming from the United States about the origin of the virus, a senior diplomat tweeted openly his suspicion that the US military brought the virus to Wuhan. His allegation contributed to US President Donald Trump’s efforts to rename COVID-19 ‘the Chinese virus’. It took a Xi–Trump summit call to de-escalate the tension.

Despite the one or two months time that China bought for the rest of the world to prepare for the epidemic, European countries and the United States were still ill-prepared. As the number of confirmed cases and the death toll rocketed in these and other countries, China responded by sending medical teams and shipping large quantities of medical supplies overseas.

Beijing believed it deserved recognition both for successfully controlling the epidemic in China and for providing so much assistance to the outside world despite the limited aid it had received during its crisis. But instead of international appreciation, there was only another round of China-bashing.

Perhaps out of concern that China’s efforts would lead to greater Chinese influence and to divert attention from their own responses to the virus, the United States and some of its western allies first attacked China for allegedly politicising aid and sending medical supplies of poor quality. Then they touted the idea that China’s lack of transparency and poor handling of the epidemic was responsible for their woes.

With its popular support waning, the Trump administration decided to use the China issue to rally domestic support for the upcoming presidential election. It propagated the story that China created the virus in a Wuhan lab against the prevailing view of the Western intelligence and science communities.

Infuriated by these accusations, the Chinese government encouraged its diplomats to launch a new round of counter-China bashing campaigns. They took every opportunity to fight the accusations — speaking up at press conferences, media interviews, international meetings and in newspaper articles. Some diplomats went out of their way to be tough and became known as ‘wolf warrior diplomats’. The Chinese official TV station’s commentaries at points specifically named US Secretary of State Mike Pompeo and Trump’s former advisor Steve Bannon people with evil intent.

Despite this counteroffensive, China continued to live up to its own international responsibilities by delivering aid to other countries and endorsing multilateral cooperation to manage COVID-19 fallout. It fought against US attempts to smear and sabotage the WHO’s efforts to fight the virus. In response to US suspension of support to the WHO, China donated an additional US$30 million to the organisation.

Looking ahead, China’s diplomacy is likely to continue unchanged for the foreseeable future — fending off Western attacks and endorsing international efforts to fight the pandemic. Despite the challenges in its quest to be a responsible power, China does not believe it should give up. To many, it will appear, the search has only just begun.

Jia Qingguo is Professor of Diplomacy and International Relations at the School of International Studies, Peking University.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.



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Growth, interrupted: COVID-19 and China’s 2020 economic outlook

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Author: Justin Yifu Lin, Peking University

In order to realise its goals to double 2010 GDP and per capita GDP by 2020, China needs to achieve at least 5.6 per cent growth this year. This growth target would not have been difficult to achieve if not for the unexpected outbreak of COVID-19 in January.

"The Guangzhou Circle" stands on the bank of the Pearl River (Photo: Reuters).

China took effective measures to suppress the pandemic. The whole country was under lockdown in February. In March, control measures were relaxed and production and business started to resume. But many export-oriented enterprises encountered a sudden drop or cancellation of orders due to the impact of COVID-19 in Europe, the United States and other parts of the world. China’s GDP fell 6.8 per cent year-on-year in the first quarter of 2020.

The risk of a possible second wave of COVID-19 infections means prevention measures need to be instilled and normalised as China embarks on the long road to economic recovery. In the second quarter, China’s economic growth is likely to experience a slow recovery. China’s growth in 2020 will depend on a rebound in the third and fourth quarters.

The World Trade Organization predicts that global merchandise trade will decline by between 13 per cent and 32 per cent this year. China’s growth will thus depend mainly on the increase of its domestic investment and consumption demands. If the growth rate can reach 10 per cent in the third and fourth quarters, the annual growth rate will be between 3 per cent and 4 per cent.

From the perspective of China’s fiscal and monetary policy space, and bearing in mind the government’s implementation capacity, it is not impossible to achieve a growth rate of 5 per cent or higher for the year by stimulating domestic investment and consumption. But to achieve this, year-on-year growth in the third and fourth quarters will need to reach about 15 per cent.

Considering the need to normalise epidemic prevention and control measures as well as the uncertainties facing the global economy, China should preserve some room for policy leeway over the coming years. According to the IMF’s World Economic Outlook released in April, the global economy will contract by 3 per cent in 2020. If China can grow 3 to 4 per cent this year, it will be a great achievement.

As long as it maintains 3 to 4 per cent growth next year, the goals of doubling its 2010 GDP and per capita GDP will be achieved by 2021. In this once-in-a-century global pandemic and economic recession, it is entirely understandable and reasonable to postpone a target set 10 years ago by one year.

In the past, the impact of financial and economic crises on the economy were generally felt on the demand side. COVID-19, on the other hand, has shocked both the demand and supply side at the same time. Previously the Chinese government mainly relied on monetary and fiscal policies to support infrastructure investment that created jobs and stabilised economic growth. This time, in addition to new infrastructure projects, China needs to support household consumption and help small- and medium-sized enterprises weather this difficult storm.

To increase consumption, China can issue vouchers to the urban poor, middle and low-income families and the unemployed, and raise the standard of minimum living insurance and assistance to low-income families in the countryside.

According to a Tsinghua University survey, 85 per cent of private enterprises in March will struggle to survive over the next three months. Bankruptcy of enterprises will lead to an increase in unemployment. Additionally, once the pandemic is over, bankrupt enterprises will face numerous difficulties as they rebuild. The protection of enterprises is therefore critical as it protects jobs and maintains the foundation of the Chinese economy. In terms of supporting enterprises, China can delay loan repayments, increase loans to enterprises and reduce their taxes and rental expenses.

Overall, the Chinese government should take advantage of its favourable fiscal and monetary policy space to stabilise the financial system, increase credits to help enterprises, invest in new infrastructure and provide necessary support for families adversely affected by the pandemic. These measures will help to expand domestic demand, maintain social stability and eliminate the bottleneck of future economic growth. China has the ability to maintain a reasonable growth rate in 2020. Like it has since 2008, China will drive the world’s economic growth and recovery as it emerges from the coronavirus crisis.

Justin Yifu Lin is Dean of the Institute of New Structural Economics and Professor of the School of National Development at Peking University.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.



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China–US blame game hampers COVID-19 response

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Author: Suisheng Zhao, University of Denver

The world is entangled in the blame game between China and the United States as it confronts the largest public health threat in a century. Each is trying to divert attention from its own missteps to the other side, hampering international cooperation and multilateral responses to the COVID-19 pandemic.

Screenshot of Donald Trump during his intervention on Fox News, 3 May 2020 (Photo: Reuters).

The Chinese government faces strong domestic criticism on their accountability and transparency after suppressing early warnings about COVID-19. Several liberal activists — like Tsinghua University Professor Xu Zhangrun, private entrepreneur Ren Zhiqiang and political activist Xu Zhiyong — publicly denounced the ‘crisis of governance’ provoked by Chinese President Xi Jinping’s concentration of power. While these criticisms were silenced, some foreign organisations and governments filed lawsuits demanding compensation for damages caused by the pandemic.

In response, the central government blamed the mishandling on local leadership and fired the party chief of Hubei province, Jiang Chaoliang, and mayor of Wuhan Ma Guoqiang, along with some health officials. After confinement measures contained the virus, Beijing became increasingly aggressive in spreading conspiracy theories and blaming foreigners. The spokesperson of China’s Foreign Ministry crudely blamed the US military for bringing the virus to China during the Military World Games in October 2019.

In the United States, President Donald Trump was unprepared, ill-equipped and overwhelmed in trying to manage the pandemic. After the World Health Organization (WHO) declared a ’Public Health Emergency of International Concern’ in January, he spent more than a month downplaying the threat and delaying diagnostic testing and stockpiling of essential equipment.

In response to criticism from Democrats and medical professionals, Trump focussed his efforts on rewriting the timeline of his response in a distorted and inaccurate manner and blamed the WHO and China for his failure to contain the pandemic. He temporarily halted funding to the WHO because they took China’s claims about the coronavirus ‘at face value’ and failed to share information about the pandemic. Blaming China for the suppression of early warnings, he is calling for an international investigation into the alleged origin of COVID-19 in a Wuhan lab.

The blame game between the United States and China is eviscerating international cooperation and preventing multilateral institutions from fighting the pandemic. Despite the threat to global security, the UN Security Council (UNSC) is not mobilising global resources against the pandemic.

The UNSC passed Resolution 1308 on HIV/AIDS in Africa in July 2000, transforming a public health concern into an international security matter by recognising the importance of a coordinated international response. The UNSC’s actions helped establish the Global Fund for AIDS, Tuberculosis, and Malaria in 2002. It also passed Resolution 2177 in September 2014, declaring the Ebola outbreak in West Africa a ‘threat to international peace and security’. The resolution empowered the UN secretary-general to create the UN Mission for Ebola Emergency Response — the first UN emergency mission directed at a public health crisis.

But the UNSC failed to issue a resolution or declaration this time. China held the rotating presidency in March and insisted that its involvement in COVID-19 was unwarranted and an intrusion into the sovereign affairs of UN member states. China’s UN envoy explained that this ‘public health’ matter did not fall within the UNSC’s ‘geopolitical’ ambit. Sovereignty became a shell for China to ward off any blame for its initial cover-up of the outbreak.

Washington also dragged its feet, demanding that any resolution specify the Chinese origins of the virus. Beijing blasted Washington for politicising the outbreak and blaming China.

Estonia, a rotating member of the UNSC, proposed a joint statement expressing ‘growing concern about the unprecedented extent of the COVID-19 outbreak in the world, which may constitute a threat to international peace and security’. China rejected the draft because it included a phrase that all countries show ‘full transparency’, interpreting it as a veiled attack on its handling of COVID-19.

While big power rivalry paralysed the UN response to the pandemic, the G7 meeting in March also failed to agree on a joint declaration because of US Secretary of State Mike Pompeo’s insistence on describing COVID-19 as the ‘Wuhan virus’ and the others gave up in disgust. The G20 meeting on the following day was unable to coordinate a global economic strategy to protect critical global supply chains and avoid deepening the recession. The China–US infighting prevented convening another G20 meeting in April.

The WHO remains the technical focal point for the pandemic response within the UN system, but it lacks the authority to cut through political obstacles. Turning the tide on the pandemic and dealing with its economic fallout will require unprecedented international cooperation — including prompt collective decisions on matters that are fundamentally political in nature, rather than purely technical.

The COVID-19 pandemic could be a moment for the United States and China to tackle a shared challenge. The pandemic is a non-traditional security threat that transcends rivalry and enmity, diluting the concept of a zero-sum military-led national security threat. Like an earthquake or climate change, COVID-19 is non-discriminatory and unbiased when it comes to wealth, ethnicity, nationality, ideology and systems of government.

Unfortunately, the global leadership needed for international cooperation is absent when it is required most urgently. The blame game between the two largest economies is hampering the global coordination and multilateral responses that are now urgently needed.

Suisheng Zhao is Professor and Director of the Center for China–US Cooperation at the Josef Korbel School of International Studies, The University of Denver. He is Editor of The Journal of Contemporary China.

This article is part of an EAF special feature series on the novel coronavirus crisis and its impact.



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China’s Djibouti naval base increasing its power

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Author: Jean-Pierre Cabestan, Hong Kong Baptist University

China’s decision to build a People’s Liberation Army (PLA) naval base in Djibouti was approved by Chinese President Xi Jinping in 2013. This constituted a sea change in its foreign policy and security strategy. The base opened in 2017, enhancing China’s global influence and better protecting its security interests far away from its shores, particularly in Africa and the Indian Ocean.

Djibouti's President Ismail Omar Guelleh, left, shakes hands with Chinese President Xi Jinping during the Forum on China-Africa Cooperation held at the Great Hall of the People in Beijing, 3 September 2018 (Photo: Reuters/Andy Wong).

But Beijing is moving carefully, focussing on strengthening its economic footprint in the Horn of Africa without directly challenging the United States and learning step-by-step how to become a full-fledged great power.

In 2015, Beijing preferred to classify its first overseas military base as a ‘logistical facility’, assigning it a limited number of missions. This included participation in UN peacekeeping operations (PKOs), anti-piracy escort missions in the Gulf of Aden and humanitarian relief. The Chinese government’s objective was to reassure both Africa and the world about its intentions. The PLA military posted in Djibouti is supposed to concentrate on ‘military operations other than war’ (MOOTW). This concept was adopted by China in 2009 and reasserted in the 2015 white paper on China’s Military Strategy and is described as directly contributing to international security through non-lethal means.

The number of PLA personnel deployed in Djibouti is uncertain, but it is likely small. While some speculate the number of personnel is 10,000, diplomatic sources indicate that it is at most 2000. This a bit higher than the French deployment (1450) but less than half the size of the US deployment (4500). The PLA Navy anti-piracy escort task force makes around ten port calls per year in Djibouti but the PLA contingent prefers to remain discreet. After initially publicising its training exercises, in 2018 it stopped doing so.

Some analysts have pointed out the differences between the PLA logistical facility in Djibouti and military bases from other countries. In their view, the Chinese military posted in Djibouti will not interfere in the domestic affairs of other countries — they will only operate under a UN mandate or with the UN’s endorsement.

Now, Djibouti hosts seven foreign militaries on its soil, including 180 personnel from Japan and 80 from Italy. Occasionally, tensions emerge from each military’s close observation of one another. In 2017 China reported that Japanese frogmen were inspecting the hull of a Chinese naval ship too closely. A year later the PLA used lasers to deter US planes from flying too frequently over its naval base. But by and large all the militaries present in Djibouti show restraint, underscoring a shared interest in peaceful coexistence.

More generally — despite the publicity that has surrounded China’s establishment of the PLA outpost — Beijing has tried to minimise the importance of their decision to have a military base in Djibouti.

But Chinese officials now endorse the idea that this ‘logistical facility’ is a military ‘support base’ and that Djibouti is China’s first — but probably not last — ‘overseas strategic strongpoint’. The military presence is being repositioned to protect China’s growing international security interests.

Djibouti’s PLA military base has more diverse missions than initially stated. The base includes personnel from various branches, including marines and special forces. It is equipped with a heliport which can also be used by drones. It also built a 660 metre-long pier, where large PLA ships will soon be able to moor. Underground, the base is equipped with cyber and electronic warfare facilities. The PLA’s new naval base is not limited to MOOTW or protecting strategic sea-lanes of communication. Counterterrorism and intelligence collection are also part of its missions.

Since its opening, China’s Djibouti base has not concentrated on its official missions. Piracy in the Gulf of Aden has dropped significantly and is no longer the main reason for the PLA Navy presence in Djibouti. No Chinese PKOs have transited via Djibouti, indicating the base has limited relevance for peacekeeping. The PLA Navy does conduct humanitarian escort missions for World Food Programme shipments to Somalia, but only once a year in cooperation with the European Union. The base instead is used to give Chinese naval crews rest as China enhances its presence in the Indian Ocean and improves its ‘far seas’ capacities, feeding China’s strategic competition with India.

Examining China’s troop training in Djibouti also provides a better idea of its potential usage of the base. Training drills aim to enhance combat capability and prepare for counter-terrorism operations and possible evacuations of overseas Chinese nationals. The PLA’s Djibouti base contributes to securing China’s economic and security interests in Africa, the Middle East and the Red Sea.

But China’s military is still learning. While Djibouti is a useful place for PLA troops to train overseas outside of the UN banner, to date their exercises pose little security threat. More generally, China’s Djibouti-deployed contingent is not very active.

While the PLA’s naval base in Djibouti is helping China gradually become a great power, movement is slow. The PLA is probably thinking of opening another overseas naval base elsewhere, for example in Gwadar, Pakistan. But China’s government will probably digest lessons from Djibouti first. It must learn how to manage its first military outpost overseas, better adjust its purpose and test its missions before establishing another naval base in Asia or in Africa.

Jean-Pierre Cabestan is Professor in Political Science at the Department of Government and International Studies, Faculty of Social Sciences, Hong Kong Baptist University.

This article is drawn from a recent longer paper here in the Journal of Contemporary China.



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China’s ‘Erhardian Bargain’

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Author: Tristan Kenderdine, Future Risk

The English call it wacky economics, it is at odds with France’s economic philosophy of dirigisme and it has been accused of pushing the European Union into a monetary policy stalemate. Yet German ordoliberalism may have much in common with contemporary economic policy in China.

A worker uses a mobile phone in front of a poster outside a construction site in Beijing's central business area, China 4 February, 2018, (Photo: Reuters/Jason Lee).

The German Historical School of economic theory played a huge part in China’s choice of development trajectory and institutions during industrialisation. The economic logic of China’s reform era model was part Friedrich List, part Alexander Hamilton and part Ludwig Erhard. In Germany, this economic logic would evolve to become ordoliberalism.

East Asian economic development has consisted of a series of exercises attempting to emulate the German experience. These attempts include the ‘East Asian miracle’, South Korea’s ‘Miracle on the Han River’, ‘Taiwan’s Miracle’ and ‘China’s economic miracle’. These aphorisms — almost always inadvertently — refer to the original Wirtshaftwunder, the ‘Miracle on the Rhine’ of post-war German reconstruction. But both globalisation and development economics consistently ignore the contribution of the underlying ordoliberal theory to economic development policy.

The model for industrial development in East Asia requires a national economic system in the first instance. State-capitalist industrialisation drives in East Asia were all dependent on a ‘Lewis model’ of converting an unlimited supply of rural labour into labour for urban manufacturing. Under this labour-for-development model, there is generally a window of around 30 years within which states establish the initial institutions of industrialisation before moving into regional and global trading regimes. Indeed, during each of the 30-year industrialisation windows in Germany, Japan, South Korea and Taiwan, an entire generation was forced to make a sacrifice for the nation.

This national sacrifice required a willing supply of labour to be used for a greater utilitarian good. This is one of the key ingredients of the East Asian industrialisation model: a population of labour that undertook generational sacrifice for future national and generational prosperity. Compared with the early European and American industrialisers that used forced labour to achieve this, the East Asian model is better described as ‘coerced labour’.

This sacrifice is often taken as an acceptable trade-off between governments and their populations. In South Korea, for example, the working generation from 1956 to 1979 suffered immense hardships through rapid industrialisation so that the country could modernise. In East Asian economic history, the political legitimacy mechanism underlying this economic growth period could be described as an ‘Erhardian Bargain’ with rural labour.

The political legitimacy of an Erhardian Bargain is dependent on government achieving industrialisation within one generation. When industrialisation drives fail — like they have in Thailand and Kazakhstan — public discontent that the sacrifice did not result in sufficient capital accumulation necessitates a renegotiation of the bargain.

In China, labour sacrifice has been immense and coastal development astonishingly successful. But the hinterland remains poor, rural development has stalled and many parts of rural China lag behind aggregate development. For example, the seven least-developed provinces in China have per capita incomes under US$7000 a year — that is over 238 million people who are far off the OECD income range.

The legitimacy of China’s Erhardian Bargain is now being put to the test as the economic restart post-COVID-19 hits labour in China hard. Many mid-income salary workers are on half-pay or no pay, many rural migrants have returned to the countryside from urban factory work and new graduates and high-skilled workers are facing an impossible leap in 2020 to reach national science and technology industrial policy goals.

The promise of economic development after a 40-year modernisation project is the backbone of Chinese Communist Party legitimacy. But China’s central leadership may find it difficult to ask rural migrant workers to take another hit for national development, especially after rural families have already sacrificed their children into the urban industrialisation project in the hope of long-term gains that for many have not yet materialised.

The 2020s is the decade that China is due to deliver on its Erhardian Bargain: to eradicate rural poverty by 2020, to achieve a moderately prosperous society by doubling 2010 GDP by 2021 and to establish the economic growth framework to become a developed ‘modern socialist state’ by 2035. But a continuous supply of rural labour is needed to support China’s further economic growth and development. It is not as simple as turning the machines back on if structural elements of labour were to drop out.

The central leadership in Beijing already has a huge task to transform the Chinese economy into one driven by consumption, imports, outbound FDI investment and high-technology. This would have been an economic pirouette of the highest dexterity even in reasonably good economic years. To achieve it this year — given low-to-no growth, a developing labour crisis and a possible debt crisis on the horizon — appears to be a step too far.

Even before COVID-19, the contemporary debate in China’s macroeconomic policymaking circles was already between stimulus and austerity. The project to integrate China into the global economy has stalled and may need a new theoretical framework to both redefine China’s domestic economic policy and international macroeconomic guidelines. In the post-COVID-19 economic restart, there may not be another ‘miracle’. The policy uses of both Listian national economics and the ‘Erhadian Bargain’ of a generation of rapid growth have now expired. Perhaps a contemporary Chinese version of ordoliberalism could provide the policy tools to maintain economic growth.

Tristan Kenderdine is Research Director at Future Risk, based in Almaty.



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