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Trade War: An Infinitesimal View

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In the post Cold War era, the US changed its policies, shifted its priorities and viewing China’s economic emergence as a great threat to its interests in coming decades. With a rapid economic growth, technological advancement and development of its armed forces, China became a future competitor of the US. Due to Chinese rapid economic growth, modernization of its armed forces as well as mounting position in Asian region and sea lanes of transportation, many American analysts take China as its future contestant. As a result, China remained a factor in the US all grand strategies. The ‘China versus the US’ indicate that Washington is taking potent steps against its threat (China). China perceives these steps as a part of the US policy of “hedge” to contain “the mighty China”. This writing tries to examine the ongoing trade war between the US and China in miniature view and suggest the options for China.

Trade wars have finally begun between the US and the China. Before little explanation of this Trade war, let’s discuss the concepts. A trade war is when a nation imposes tariffs on imports and foreign countries retaliate with similar forms of trade protectionism. It is side effect of protectionism that occurs when one country (country A) raises tariffs on another country’s (country B) imports in retaliation for country B raising  tariffs on country’s A imports. Besides this, a tariff is a tax imposed on imported goods and services. Trade wars also commence if one country perceives another country’s trading practices to be unfair. Trade wars are also a result of a misunderstanding of the widespread benefits of free trade. In addition, a tariff is a tax or duty that the government places on a class of imported goods (tariffs on exports are very rare). In theory, this makes the foreign products more expensive and therefore less desirable to consumers-boosting domestic makers of the product, which don’t have to pay the tax. The tariff is collected by customs officials and goes to the government. In addition, Protectionism refers to government actions and policies that restricts or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition.

The United States and China have imposed a tariff of 25% on imports worth $34 billion after exchanging several threats over the last few months. This marks the official beginning of what China dubs as “the biggest trade war in economic history”. While this trade war is far from the biggest the world has seen, it has the potential to cause some significant damage to the world economy. US President Donald Trump, who began the year by imposing tariffs on imported solar panels and washing machines, has vowed to possibly tax all Chinese imports into the US, which last year added up to a little over $500 billion. President Trump’s tariffs against China will likely resonate with voters who believe in his “America First” campaign and perceive the trade deficit with China as a loss to the US economy. China, not surprisingly, has responded by targeting American exports like soybean and automobiles, a move that could cause job losses in American states that accommodate Trump’s voter base. Other major US trading partners such as the European Union, Mexico and Canada have also slapped retaliatory tariffs on various US goods. On July 06, 2018 the Chinese products $34 billion worth, including goods, flat-screen televisions, aircraft parts and medical devices have faced tariff imposed by Trump administration. .The goods marked for tariffs will now face a punishing 25 percent border tax when they are imported into the US. The Trump administration initiated these tariffs after concluding an investigation into some of China’s ‘controversial trade practices’. The main motto behind the new trade barriers is to penalize China for doing things like forcing foreign businesses to hand over their most-prized technology to Chinese companies – many of which are state-owned – in exchange for access to their market. China immediately accused the US of starting “the largest trade war in economic history to date” and responded by imposing 25 percent tariffs on $34 billion worth of US goods, including soybeans, automobiles and lobsters. According to a spokesperson for China’s ministry of commerce, after Minutes the US tariffs went into effect,

“China promised not to fire the first shot, but in order to safeguard the country’s core national interests as well as those of the people, it is forced to fight back … the US will be opening fire on the whole world and also opening fire on itself.”

Additionally, the state-run Global Times wrote,

“If what the US wants is to escalate a trade war with China, then so be it. A little fighting may be the only way the Trump administration clears its mind and allows everyone to sober up.”

The aggregate amount of trade affected is moderate relative to the US and Chinese economies, but for the US, this is the most extensive import protection since the disastrous Smoot-Hawley tariffs in the 1930s. President Trump has threatened a 10 percent tax on a further $200 billion of imports from China.

In the context of feasible effects on global economy, the trade war between the US and the China could push the world economy towards a decline and it could lead to a collapse of comprehensive as well as global trade. The deteriorate investment, disturb financial markets and sluggish global economy are the major negative outputs of this trade war. This trade warfare between the US and China could extend to worldwide in trade arena and to areas beyond trade. According to economical analysts, the trade conflict among one superpower and other rising power can create disturbance of global supply chains. In addition, the US products which are assembled in third world countries can also be affected. Without a doubt, due to the disturb supply chain, the US consumer could well end up paying higher costs for products. At the end but not least, this trade confrontation between two rivalries of 21st century could affect the world trade system and it could be trade cold war between both countries be like the cold war between USA and the USSR in 20th Century. A thoroughgoing trade war could lead to a collapse of global trade.

Additionally, this trade war could also effects Chinese economy, With the Dawn of 21st century, People’s Republic of China is in a very fair position in the context of Economy to face any economic tornado because in general, its economy is less dependent on exports, and exports to the US in particular. The value added in its exports to the US is less than 3 percent of its economy. In addition, China is at the end of many global value chains, which include inputs from the US, Japan, South Korea and Taiwan. The Shanghai stock market is in main territory, down 23 percent from a high in January 2018. Still, the trade war comes at a bad moment in China’s cycle. The establishment have been tightening financial conditions and trying to restraint in financial risks, so that the economy is slowing, even before it takes a hit from trade. The Chinese currency has depreciated round about 4.3 percent against the dollar for the last past few months.

This is a natural market reaction to the US protectionism. Over the same period, the dollar has appreciated about 5 percent against a basket of major currencies. This is one of the ironies of the US which is trying to use trade taxes. They create uncertainty in the world and one result is that capital flows out of other economies to the US. In the short run, this raises the value of the dollar and largely undoes the protection. Historically, when the US introduces protection, it has typically not led to an improvement in the trade balance, rather the opposite. In the case of US-China trade, 25 percent tax means that about $50 billion of imports will be more expensive, and the US is likely to import less. But the other $500 billion that the US imports will be modestly cheaper because of depreciation and the US will import more. History suggests that the net effect on the trade balance will be minor. This is one reason that the direct effect on the Chinese economy is likely to be minor.

In addition, the effect of this trade war could be on the US economy. The US economy is humming along because of fiscal stimulus from tax cuts plus expenditure increases. Net job gains in June, 2018 were above 200,000, the pattern of recent months. In general, the trade war will destroy some jobs in export sectors and create some jobs in import-competing ones. This is a bad tradeoff because export jobs are generally of higher productivity and pay. The job churning is also disruptive — the lost jobs are likely to be in agricultural states and southern states with auto plants, whereas job gains are probably elsewhere. The Trump White House is betting that, given the overall strength of the economy, some localized pain will be tolerable and the get-tough policy toward China will be a political winner for the midterms. Economically, both the United States and China would lose from a trade war. Punitive tariffs would push up import prices, dent exports, cost jobs and crimp economic growth, so both sides would do best to avoid an outbreak of hostilities.

Here some options for China to retaliate this trade war. In this trade war with China, President Donald Trump wields one seeming advantage: the US could ultimately slap tariffs on more than $500 billion in imported Chinese goods. Beijing has much less to tax: It imported just $130 billion in US goods last year. Yet that hardly means China would be powerless to fight back once it ran out of US goods to penalize. It possesses a range of other weapons with which to inflict pain on the US economy. Here is a look at some of the options China has in this war:

The Chinese government should do trade in local currency. The visit of Pakistan’s Prime Minister Mr. Imran khan Niazi to China give very valuable and authentic suggestion to Chinese government to do trade with Pakistan in Yuan rather than the US dollar $. It will be a direct and indirect hit to the US, her fellows and dollar $ currency. After the successful agreement with Pakistan, China could do trade with other countries in Yuan. Be remembered that China is a chief exporter country of the world with 2263 trillion dollar $. In addition, recently China gives defeat to the US in the context of purchasing oil and makes herself as chief and main oil importer and customer of the world. China could do trade with KSA, KUWAIT, IRAQ, IRAN, QATAR and other oil producing countries in Yuan but the US don’t want this. If the China would successful to do trade with oil producing countries in Yuan than the dollar will decrease its worth and market value at least. The US impose sanctions on European companies to do trade with Iran and other oil producing countries but reciprocally the European countries give intimidation to boycott the US  dollar. In addition, Russia would play vital role as recreationist and would give Red carpet to all. This downfall of dollar will make crash in World Bank and IMF also. Chinese government this step would create a greatest tension for the US and dollar.

China should do check and balance regarding the US companies in China. China’s state-dominated and heavily regulated authorities could disrupt the US companies by withholding licenses or launching tax, anti-monopoly or other investigations. Chinese controlled media should play vital role. The state-controlled media have encouraged consumer boycotts against Japanese, South Korean and other international products Last year, Beijing destroyed Korean retailer Lotte’s business in China after the company sold land in South Korea to the Seoul government for an anti-missile system opposed by Chinese leaders. Beijing closed most of Lotte’s 99 supermarkets and other outlets in China. Seoul and Beijing later mended their relations but Lotte gave up and sold its China operations.

To counter Trump’s “America First” approach, Beijing can appeal for support to US allies and other countries. Trump’s unilateral actions have allowed China to position itself as a defender of free trade despite its status as the most-closed major economy. That could help Beijing win over governments that have criticized Trump for acting outside the World Trade Organization. Chinese leaders have tried – so far without a major success – to recruit European and other governments as allies. More broadly, Chinese commentators have suggested Beijing also could disrupt diplomatic work over North Korea’s nuclear and missile programmes or other initiatives. But political analysts say that would risk setting back work Chinese leaders see as a priority.

In concluding remarks, No country can hope to impose tariffs without affecting its own trade and industry as well as economic interests in this contemporary world. Apart from disadvantage, countries that rely on foreign imports can be disturbed due to higher prices for goods, tariffs and supply chain of producers. So both the competitors of this globalized world, the US and China, are doing no good to their own economic fortunes by engaging in this tit-for-tat tariff battle after blamed each other for the ongoing trade warfare. According to the US Federal Reserve meeting the economic uncertainty, decline of private investment and delay of investment plans have been happened due to this trade war. Besides this, the economic giant China will also be equally affected. This current trade confrontation between the US and China also threatens the rules-based global trade order. It could also isolate the US, which has refused to settle differences through serious mediations, negotiations. If global trade tensions continue to simmer, it may not be too long before countries resort to other destructive measures such as devaluing their currencies to support domestic exporters. The world economy, which is on a slow path to recovery, can do without such unnecessary shocks.

PhD Student of the School of Politics and International Studies, Central China Normal University 152, Luoyu Road, Wuhan, Hubei, People’s Republic of China 430079

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East Asia

From China, A Plan For The Future

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On October 26, the fifth plenary session of the 19th Central Committee of the Communist Party of China opened in Beijing, with the ambitious goal of defining – after months of preparation and four days of debate behind closed doors – the strategic policy lines of the 14th five-year plan of the country, which – unlike the rest of the world -went practically unscathed by the Covid-19 pandemic.

 The plan – designed to cover the 2021-2025 five-year period – has the meaningful title of “Vision 2035”, aimed at underlining its potential medium-term impact on China’s economy and its international relations. The US economic agency Bloomberg called the plan a “Warning Shot”, a “five-year warning shot to the United States”.

 In fact, as Chinese President Xi Jinping pointed out, “Vision 2035” aims at making China a “moderately prosperous country” and redefining its economic (and hence geopolitical) relations on a global level.

Before examining the broad policy lines of the 14th Five-Year Plan, as announced by the Chinese media in recent months, it should be stressed that the Chinese leadership of the third millennium is profoundly different from the Maoist one. In the days of the “Great Helmsman”, five-year plans were dictated by the most integralist ideology and often did irreparable damage to China’s economy and society.

In 1958, the second five-year plan, defined by Mao Zedong as “The Great Leap Forward”, tried to transform the Chinese economic and production system from rural into industrial with an attempt at a huge forced reconversion that wanted to turn farmers into workers and cultivated fields into manufacturing industries by decree.

 The attempt failed miserably and the famine that followed due to the abandonment of the rural areas caused over 20 million deaths.

Post-Maoist China learned from previous mistakes and it shifted from rigid and obtuse ideological beliefs to scientific pragmatism, with the result that today China is on the way to gaining the leadership of the world economy.

The last five-year plan, i.e. the 13thone for the 2016-2020 period, aimed at “replacing unbalanced, uncoordinated and unsustainable growth” with innovative, coordinated and environmentally-sensitive measures for inclusive growth capable of establishing a new “moderately prosperous society from all viewpoints”(which remains the same objective as the new plan).

The basic goal was to make GDP grow by up to 6.5% per year, an objective that has almost been achieved despite the Covid-19 epidemic, thanks to the results reached in the first three years, a period in which the growth of Western economies -ranging from the United States to Germany -recorded levels three times lower than China’s. Once overcome the pandemic crisis last March, in the third quarter of 2020 China’s GDP reached 4.9% compared to the previous year and all economists, not only the Chinese ones, are convinced that it is destined to grow further by the end of the year.

A concrete goal achieved was to reduce carbon dioxide emissions by 12%.According to the Chinese leadership, this augurs well for achieving zero emissions by 2030, thanks to the total abandonment of the use of fossil fuels in energy production.

In China the “green shift” – so dreamt of by the European institutions – has been started concretely while results have been significant also in the fight against poverty: the 56 million “absolute poor” (people with an annual income of 335 dollars) surveyed in 2015 rose to 5.5 million in 2019. In the same period, the housing crisis was tackled with the building of 10 million social housing units that replaced thousands of slums.

It is on the basis of these results that President Xi Jinping has dictated the guidelines of the new five-year plan on which, in these days, the discussion of the Party’s Central Committee is focused.

The central focus of the 14th Plan is “dual circulation”, a strategy that aims at making both domestic demand and foreign investment in consumer goods and technology grow, with a “dual” and coordinated approach of great potential impact on the living conditions of the Chinese population and China’ international relations.

 Morgan Stanley’s economists estimate that China’s GDP will grow by 5.5% per year until 2025, a conservative estimate which, however, is considered sufficient to significantly increase people’s income and domestic demand, to attract significant foreign investment and increase China’s ability to invest abroad, both in financial markets and in industrial and technological markets.

According to Liu Peiqian, a Chinese economist working in Singapore (interviewed by Bloomberg), “in view of 2025, China’s policy is becoming increasingly focused on long-term goals, while investors can expect more continuity and certainty from China’s economic policy over the next 15 years”.

The Economist‘s financial analyst Yue Sue, interviewed by CNBC, said that “she expects the five-year plan to focus strongly on supporting technology and energy security based on diversification of energy sources, rather than relying on increased oil imports, while food security will be looked at carefully in view of possible tensions in relations with food exporting countries (first and foremost, the United States).

The decisions taken at the end of the four days of discussions on the 14th Five-Year Plan will only be made public in March next year, but economists are certain that, all things considered and given President Xi Jinping firm and authoritarian leadership, all what anticipated so far by the State media will be implemented to the letter.

Whatever the final decisions may be, it is certain that the “warning shot” to the United States, about which the Financial Times has talked, will influence – probably in a further negative way – US-China relations in the coming years.

In fact, despite the huge differences existing in domestic policy between Donald Trump and Joe Biden, both candidates in the next US presidential elections are quite in agreement with specific reference to relations with China, as they are both oriented to continue the policy of ongoing confrontation-clash between the two countries.

 For this reason, it is easy to predict that whoever wins the race for the White House, Sino-American relations on the political and economic levels are not bound to improve in the short and medium-term.

Considering the undeniable success of the previous one, the 14th five-year plan will mark a further step forward for the Chinese economy and, if it does not produce positive effects on relations with the United States, it will produce positive effects both on the domestic front and on the global arena.

China has emerged in good condition from the coronavirus epidemic, whose effects, instead, are being felt heavily in Western societies and economies. However, faced with the guidelines dictated by the new Chinese five-year plan, this reality opens up an extraordinary “window of opportunity” for the European and Italian production sector. The “dual circulation” envisaged by the plan opens up huge opportunities for European and Italian companies that want to take advantage of the opportunities offered by China’s economic growth and its increasing financial resources.

Working in effective synergy with Chinese partners is not difficult if you have good professionals, skilful technicians and workers, as well as innovative ideas based on sound scientific foundations.

I can give the example of a reality I know personally: TRAFOMEC, an Italian company established in 1981 by a brave group of engineers, which over the years has become a leader in the production of current transformers and alternators, for industrial and domestic use, as well as in the manufacturing of electrical panels for trains and ships and in technology linked to the development of alternative energies.

After building its production plants in Italy and Poland and setting up joint ventures in India, Poland and China, Trafomec merged with its Chinese subsidiary Indu-Tek in 2016, thus creating a production reality with a dual centre of gravity: in Europe (Italy and Poland) and in China – a reality that has been further enriched thanks to the collaboration recently started with Eldor Corporation, a leading multinational company in the automotive sector and partner of the world’s leading car manufacturers, present in Italy and China.

I have given this example to demonstrate the huge growth potential for Italian companies that will develop forms of collaboration with similar Chinese companies or that will decide, thanks to the opportunities offered also by the 14th five-year plan, to enter the huge Chinese market. Trafomec has grown and will grow also thanks to this challenge that – possibly with the intelligent support of the Italian government and the European authorities- can be taken up also by other Italian and European companies, thus contributing – thanks to the opening of a “new Silk Road” – to the economic recovery of our country, debilitated by the pandemic, in an optimistic vision of the future taking into account an historical fact: after the plague of 1300, Renaissance blossomed in Italy.

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What prevents Japan from ratifying the recently assented Nuclear Ban Treaty?

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With the ratification of Honduras, a Central American country, on 24 October 2020, the Treaty on the Prohibition of Nuclear Weapons (TPNW), adopted in 2017 by the UN General Assembly, crosses the ’50 ratifications’ mark required for its entry-into-force, and is set to become effective on 22 January 2021. But, interestingly, how come Japan, the world’s only nuclear-attacked country, not among the 50 ratified states?

History remembers Japan as the only country in the world falling victim to a nuclear attack that happened 75 years ago, when the Japanese cities of Hiroshima and Nagasaki were attacked using air-dropped atom bombs by the United States with the aim of forcing a surrender from the then Empire of Japan in World War-II.

The U.S. factor in Japan’s security policy

Post-war era saw Japan evolving as a strong U.S. ally, including getting security protection under U.S. nuclear umbrella, a hard fact that prevents the Asian economic powerhouse to ratify the Nuclear Ban Treaty, often abbreviated as TPNW, recently assented for entering into force in January, next year.

Despite calls from anti-nuclear activists and Hiroshima-Nagasaki survivors, both living within the country and around the world, Japan’s ruling establishment faces a big conundrum, but limited in decisional autonomy with regard to a matter involving the United States.

A politician representing the ruling Liberal Democratic Party (LDP) said that even though his party share the idea behind the treaty, it would be too unrealistic to move in the direction of ratification, hinting at Japan’s difficulty to handle how US would perceive such a move that can translate into an open disregard for US-led security arrangements in the region.

Moreover, the perceived threat from across the Sea of Japan, arising from a dictator-ruled, nuclear-armed Pyongyang and a recently more assertive Beijing looms over the island state, something that naturally brings Japan closer to the US.

Moreover, for decades, the security alliance with Japan has been a significant factor in US foreign and defence policies in East Asia, and the wider Asia-Pacific region.

Japan’s post-war security arrangements with the United States

Signed in 1951, the early ‘US-Japan Mutual Security Treaty’ was a ten-year, renewable pact that envisaged how Japan would allow U.S. forces to remain on Japanese soil after the country regained its sovereignty, in light of a new pacifist constitution.

This pact combined with the ‘Yoshida Doctrine’, a postwar policy attributed to Shigeru Yoshida, former Prime Minister of Japan, which stipulated Japan’s reliance on the US for its security needs so the government could focus on economic re-building.

The 1951 agreement was revised in 1960, granting US the right to establish military bases on Japanese islands in exchange for a renewed commitment to defend Japan in the event of an attack. These bases gave the US its first permanent military foothold in Asia.

In 1967, PM Eisaku Sato unveiled the ‘Three Non-Nuclear Principles’ (no possession, no production, and no introduction)to cool down tensions surrounding nuclear arms on US bases in Japanese soil. Since then, Japan has relied on the US nuclear umbrella for deterrence capabilities.

Today, according to a US-based think tank Council on Foreign Relations, there are more than 80 US military facilities in Japan, including key ones in Okinawa and Yokosuka. More U.S. service members are permanently stationed in Japan than in any other foreign country.

The aforementioned close security ties of Japan with the United States act as a barrier for the island state to ratify the Nuclear Ban Treaty.

What does the TPNW entail?

The treaty is going to be the first legally-binding international pact to comprehensively ban nuclear weapons, with the ultimate goal of total elimination.

As it was agreed upon, in 2017, when at least 50 countries ratify the treaty, it will qualify for entering into force within the next 90 days i.e. 22 January, next year.

Many international security analysts, however, questions the efficacy of the treaty as an instrument of war-prevention and disarmament as it does not involve any of the strongest, five permanent members of the United Nations Security Council (P-5), namely, the United States, Russia, France, the United Kingdom, and China, all of them nuclear states along with India, Pakistan, North Korea, and sometimes ambiguously, Israel too.

However, over a quarter of local assemblies across Japan have adopted a written statement demanding that the national government should sign and ratify the TPNW, a difficult choice for Tokyo.

Meanwhile, the United States has been urging countries not to ratify the Treaty, and stated that itself and all the other NATO allies will stand unified in their opposition to the potential repercussions of the TPNW. Washington has also sent letters to the countries that have ratified the treaty, requesting their withdrawal from it.

TPNW requires that all ratifying states should never under any circumstances develop, test, produce, acquire, or possess nuclear weapons or other nuclear explosive devices. It also bans any potential transfer of nuclear materials among each other.

The other treaty to keep checks on horizontal spread

Year 2020 also marked 50 years since another pact aimed at preventing the horizontal spread of nuclear weapons entered into force, the Treaty on the Non-Proliferation of Nuclear Weapons or NPT, in 1970.

While Japan has managed to ratify the NPT in 1976, six years after signing the treaty in 1970, its decisional autonomy with regard to TPNW is much more complex.

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Do not panic, we are Chinese: China’s response to the pandemic

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In Europe, in the United States and in South America, the feared second wave of Covid-19 epidemic is spreading. It is generating not only panic among the public and the institutions, but it is beginning to put health systems and economies under stress. They were starting to recover with difficulty after the impact of the first wave of the epidemic which, between the winter and spring of this year, made the pace of industrial and manufacturing production and productivity rates in the trade, tourism and catering sectors plummet globally, with figures suggesting a decidedly dark future.

In Italy, faced with the increase in infections which, however, does not mean an increase in the number of sick people, the Government has decided to delegate to the Regions’ Governors the power to implement measures to limit individual and collective freedom in the name of a “state of emergency” which has been going on since last March and seems bound to accompany us also in the coming months. For the first time since the end of the Second World War, an ominous and worrying word, “curfew”, has reappeared in official communiqués and news reports.

Over the next few days, in the Campania and Lombardy Regions, it will be forbidden to circulate in the streets from 11pm to 5am, while the purchase of alcohol and the opening hours of shopping centres, bars and restaurants will be restricted. Just to complete an increasingly tragic scenario, on October 20 last, the Italian Health Minister, Roberto Speranza, urged Italians to “stay at home as much as possible” with a voluntary lockdown that seems to be a prelude to the adoption of measures that could bring us back to the situation of last spring with incalculable social and economic damage.

Curfews, lockdowns, targeted or generalised closures are now common practice also in France, Great Britain, Ireland and Spain which, like Italy, have suffered the devastating economic impact of the first wave and could be brought to their knees by the new pandemic emergency.

At this juncture we have to ask ourselves a question: what happened and what is happening in the country where it all began? How are things going in China that in our media, obsessively focused on domestic troubles, is mentioned only superficially and in passing?

“China is Near” was the title of a 1967 movie directed by Marco Bellocchio, that evoked the unstoppable expansion of the Maoist thinking. Today we must say that “China is far away”, encapsulated in the stereotypes developed by Western culture, which prevent us from seriously analysing its political, economic and social evolution and, above all, from drawing lessons from the political and health model that has enabled China to come out of the Covid-19 emergency with its head held high.

On September 22 last, in a blunt speech – as usual -at the United Nations General Assembly, President Trump accused China of being responsible “for spreading this plague throughout the world” and – to further underline the concept -he dismissed the coronavirus as a “Chinese virus”. In the same forum, Chinese President Xi Jinping soberly urged all countries affected by the epidemic to follow his country’s example and “to abide by the indications of science without attempting to politicise the problem”.

Figures clearly demonstrate that the Chinese model is important and worthy of attention. In China, where it all began in December 2019, out of a population of about 1.4 billion inhabitants, the Covid-19 epidemic has so far caused 4,739 deaths out of 90,604 sick people. In the United States, over the same period, out of a population that is about one fifth of China’s, 7,382,194 cases of infection were recorded that led to the death of 209,382 people (data provided by the English medical journal, The Lancet, October 8, 2020).

Great Britain, with a population twenty times smaller than the Chinese population, had to deal with five times more infections than China and ten times more deaths.

These are the figures of October 20 last, referring to the whole of China: 19 cases of illness, all imported from abroad. 24 asymptomatic infections and 403 cases testing positive kept under observation. All, except one, imported from abroad(!). Figures which, as you can see, are globally lower than those recorded since the beginning of the emergency in one single Italian region!

Faced with these figures, it seems difficult to shirk a simple, dual question: how could China fight the epidemic and keep it under control? Hence why do we not follow its example by drawing on its experience?

China was accused of responding late to the first outbreak of the epidemic in December 2019 and notifying late the World Health Organization (WHO) of a new outbreak. Both accusations are completely false.

After the outbreak of the new virus in late December, Chinese scientists isolated and identified the genome sequence of Covid-19 on January 10, 2020 and a few days later, after alerting the WHO, the authorities started to take countermeasures.

China was ready for the emergency: since the SARS epidemic – a virus similar to Covid-19 – had caused just over 700 deaths in 2002, but very serious damage to the economy due to the stop of flights, tourism and exports, the government had given orders to prepare accurate contingency plans to be activated promptly in case of new epidemics. Those plans, which were not prepared and put in a drawer but updated and carefully tested, were activated immediately after the first alarm.

With its 12 million inhabitants, Wuhan – the epicentre of the first infections – was immediately imposed a total lockdown, while in the rest of the huge country the population was urged (without curfews or states of emergency) to follow the most elementary and effective prevention and self-protection measures: social distancing, use of masks and frequent hand washing. It has been said in the West that China has reacted so effectively because it is ruled by an authoritarian regime. Indeed, Confucius has counted much more than Mao for the Chinese. The Confucian social philosophy that not even 71 years of Communist rule have managed to wipe out, with its basic rules of respect for the natural hierarchical order, makes the Chinese a naturally well-behaved, orderly and obedient people. Suffice it to recall that since the beginning of the new pandemic emergency the protests in Hong Kong have decreased until disappearing, while in Europe we are witnessing massive demonstrations with diehard “no-mask” people.

It is, however, the quick response of the Chinese political and health authorities that is at the basis of the undeniable success in fighting the epidemic, at first, and later containing it.

As stated above, Wuhan was immediately isolated and subjected to total lockdown for 76 days, while targeted closures were imposed in the Hubei Province. Throughout the country, 14,000 health checkpoints were set up at the main public transport hubs and, within two weeks since the “official” outbreak of the pandemic, in the city of Wuhan alone 9 million inhabitants were tested.

As one of the main producers and exporters of health equipment, China was not caught unprepared in terms of hospital supplies and individual protection devices: in short, no mask crisis.

While in the United States and Europe, despite the lockdown, people did not seem to be inclined to wear masks (President Trump wore a mask in public only last September), the Chinese immediately followed the authorities’ guidelines with a great sense of discipline. All the municipal security cameras were “converted” to control citizens’ use of masks, while drones equipped with loudspeakers were flown over all areas of the huge country to check the inhabitants’ compliance with the rules. The Xinhua State agency released the footage taken by a drone in Inner Mongolia, showing an astonished Mongolian lady rebuked by the drone saying” Hey Auntie, you cannot go around without a mask. Put it on right away and when you go back home remember to wash your hands”. Probably media embroidered the episode a bit, but certainly in China they did not witness the summertime movida that took place in Rome, Naples or Milan, which is at the basis of the many troubles with which we are currently confronted.

On February 5, 2020 the first Fancang hospital was opened in Wuhan, a prefabricated structure dedicated to the treatment of non-severely ill people, while traditional hospitals were reserved for the treatment of severely ill people. The use of Fancang hospitals (dozens of them were built) made it possible to limit the staying at home of people with mild symptoms, but anyway sources of contagion, within their families – the opposite of what is happening in Italy where the people with mild symptoms are advised to stay at home -and prevent the quick spreading of the virus starting from families. The Fancang hospital network made 13,000 beds available and was dismantled as from May 10, 2020 when the first wave of the epidemic ended in China and was not followed by a second wave. To avert this danger, the Chinese authorities have relaxed “internal” checks and made the control measures for those coming from abroad very strict. At a time when in Spain and Italy the checks for incoming travellers are practically derisory, in China all those who enter the country, for whatever reason, are subject to tests and strictly controlled quarantine.

In essence, China has first fought and later controlled the spreading of the Covid-19 epidemic, with drastic but rational measures and above all understood and accepted by a population educated by Confucius to respect hierarchies and discipline. China can currently be an example for the rest of the world and it is there to testify that with strict, but intelligent measures even the most dangerous situations can be tackled successfully.

It is an example that should be studied and followed without the typical arrogance of the “white man”, also considering an important fact: while the economy of Italy and of its European partners is hardly growing, China’s GDP growth rate is 4.9% higher than last year.

There is much to learn from China both in terms of managing a health emergency and in terms of protecting the economic system.

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