MacroPolis

As the coronavirus in China leads to ever more expansive measures by the authorities in Beijing and governments as well as corporate entities across the globe, two aspects of this dramatic development are starting to come into greater focus: The management of information involved in this fast-moving public health emergency, and secondly the urgent need for Chinese authorities to manage their resources when dealing with this epidemic. While both are linked in various respects, they also illustrate distinct features worth exploring in greater detail.

The scale of the challenge in mainland China is enormous. The spread of the virus, how long it will last and how deeply it will impact Chinese society, affecting its slowing economy and influencing international relations can hardly be predicted. At the time of writing (end-January 2020) more than 60 million people across cities in China had been prevented from travelling and are essentially quarantined. Repeat, 60 million citizens and counting! That number corresponds roughly to the size of an entire country in the neighbourhood of China, namely South Korea. The social consequences of preventing millions of one’s own citizens to move, travel, or simply return to work leads the Chinese authorities into unchartered territory. How long this state of emergency will last is equally unknown political terrain.

Many analysts and observers have turned overnight into virologists. They try to access the consequences of this crisis on sectors such as consumer spending, tourism and manufacturing. In doing so they risk losing sight of a much more immediate challenge for the Chinese authorities, which over time will impact on the political economy. The developing coronavirus is testing the authorities’ institutional capacity and availability of various resources necessary to deal with the magnitude of the challenge. Just focus on the health sector for a moment. Are there enough hospitals, doctors, nurses, pharmaceutical products, testing kits and face masks to meet the rising demand? Furthermore, how fast can the race to identify and produce a coronavirus vaccine become operational and an effective treatment (hopefully without side-effects)? How do you organise food supplies for millions of citizens in cities that are affected by travel and transport restrictions?

These questions address critical elements of the structure of the healthcare system. China has a centralised, top-down system. In this emergent global health crisis, the fault lines of such a centralised structure become apparent e.g. the presence of a GP is not a mandatory characteristic across the country. Instead, as the past weeks have shown, the default option for most citizens is to rush to overwhelmed hospitals. Judging by past virus outbreaks in China, notably the SARS virus, which lasted from November 2002 to July 2003, the current crisis has multiplied much faster and is leading to measures and restrictions that affect millions of citizens even if they are not infected or are taking precautions.

Against this background, the operational capacity of municipal authorities, health clinics and food suppliers is stretched to their limits. The consequence of this dire situation will have to be a root and branch evaluation of the country’s capacity to respond to a fast-moving emergency. This entails a reconsideration of the immediate priorities for public investment. Instead of building further bridges and highways in large-scale infrastructure development projects, a fundamental process of rethinking resource allocation in the public and private health sectors is critical.

But there is another dimension to this evolving situation. It concerns the prestige and authority of the Communist Party of China (CPC). Its crisis management is being closely scrutinised domestically and abroad. Decision making authority and crisis management capacity are closely intertwined with legitimacy for the CPC. This critical aspect is most clearly visible in the evolving information management of the coronavirus.

As a point of departure, the current crisis cannot be redirected by blaming foreign influence, as happened with regard to Hong Kong and Taiwan-related developments during the past months. This health crisis emerged on China’s home turf and is now spreading at an alarming rate across the country, neighbouring states and as far as the US, Germany and the UK. Seen in this light, the authorities in Wuhan, where the virus is said to have originated, but more importantly the government in Beijing are faced with a major challenge of managing the information that reaches their own citizens and equally, albeit at another level of interaction with international health organisations, embassies in Beijing and corporate representatives from international firms operating in China.

At the heart of this information management challenge rests the question of censorship. What do you tell your citizens and when do you inform them? How much do you share with foreign representatives? There is a popular view held by analysts outside China that the authorities will – similarly to recent events in Hong Kong - react with strict control mechanisms regarding the flow of information. In short, message discipline through a top-down information management system which may include cover-ups, misleading data and outright denials of the magnitude of risks emerging.

I beg to differ on this observation. Given the scale of the challenge, censorship is a futile attempt to delay the inevitable. If more than 60 million citizens are currently affected from travel bans to and from cities during the busiest holiday week in China’s Lunar New Year, then it is not only impossible, but equally irresponsible to assume that censorship is the tool of choice in this crisis. We are already witnessing how citizens – concerned about their own health or that of their relatives and friends – are going to hospitals, taking pictures and posting these on social media. Moreover, the level of digital connectivity and online communication that exists in today’s China – take the most popular platform WeChat – provides a platform for interaction that could only be curtailed by adopting the nuclear option, namely shutting down (but for how long?) internet access for millions of Chinese citizens.

Seen from this perspective, information management through censorship during the coronavirus crisis would prove counter-productive and risks intensifying the simmering anxiety, even dissent, among many citizens to a dangerous boiling point. Such a scenario is the last thing the political authorities would want to have to deal with simultaneously: a health crisis turning into an epidemic and the visibility of political dissent on the streets across China. Therefore, China’s ruling party can revert to acknowledging, even reluctantly, the political sensitivities inherent in this evolving crisis: let citizens articulate their concerns, even anger on social media instead of trying to subvert their anxieties and risk turning them into angry critics against those at the top.

While the coronavirus outbreak is real and multiplying with alarming speed, the urgency of appropriate treatment is paramount inside and outside China. The past two weeks have shown that this epidemic challenges the crisis management capacities of the ruling party in China. How the authorities in Beijing deal with the evolving situation will inform its citizens and us outside observers about the potential for another, but far-less malignant virus that is also spreading across the country: namely the demand for transparency and the need to address it across all government levels. The Chinese authorities are fighting a war on two fronts at home and vis-à-vis their international credibility. Never has health policy had such an impact on the future political legitimacy of the ruling party in China. There are critical lessons to be learned from this challenge, most importantly in the interaction between citizens and their government in Beijing.

*Jens Bastian is an independent economic analyst and financial sector consultant, based in Athens, Greece