Coronavirus: institutional advantage of China
The last three months have been very stressfulfor China and put it throughan enormous amount of pressure. Coronavirus has impacted all spheres of life, including the economy. The first two months were more worrisome due to the rising number of affected people. China was struggling to combat the coronavirus and it needed moral and technical support. Unfortunately, many countries, including leading Western countries preferredspreading malignant propaganda. USA looked at this as an opportunity to yield economic benefits. USA administration did not miss any occasion to criticize China on one or other account.
China did not pay heed to the noise and kept its focus on its fight against coronavirus. Theirefforts started to pay off, the number of new cases has dropped to 18+. The drop is marvelous, as the count for new cases was in thousands only few days ago. This is happening at a time when the coronavirus is spreading across the world. The total number of cases on 13th March was 134, 918. The reported deaths were 4,949 but the recoveries surpassed the death toll. It was 70,395 on 13th March. The spread is now more concentrated in European countries and Iran. Italy is the new epicenter of the Corona outbreak. It is spreading at an alarming pace in Europe and has shakenentire Europe. USA is also witnessing a rise in the number of effected people.
The testimony of Mr. Robert Redfield from US Center for Disease Control and Prevention to congress opened a new debate. He highlighted that few deaths, which were early considered due to influenza, later on proved to be due to COVID-19. It is very alarming because it shows that USA was either unaware or intentionally contained the information. Both situations are very dangerous, if USA was unaware, it put question mark on the ability of USA’s medical system. The other possibility is even more dangerous, if US intentionallykept the information, and let it spread through it has put millions of people at stake. China is now openly criticizing USA and showing concerns. China also pointed fingers toward the US army and suspected its role in spread of COVID-19 in China. It is asking for a clarification from USA.
The COVID-19 provided an opportunity for cooperation. If countries refuse to cooperate, the world need to be ready for another economic recession
Despite, the fact China that faced harsh treatment from USA and the West, it is still ready to help the world in the fight against COVID-19. China is aware thatthe world is looking towardsit to help them, especially to the strategy which China applied to counter the virus. China has already started responding to the world positively and it has started assisting the world. It has dispatched medical kits, medicines and experts to different countries. It is distributing masks and sharing its experience. On 12th March it sent a team of experts to Italy to assist the national teams. Although China is generous in sharing its experience and providing medical supplies, the effectiveness of the measures would depend on local systems of governance and institutions.
The world needs to understand and realize that one of the major factors of success was its institutional arrangements and governance system. China has a unique system and it has an institutional advantage in combating crises and uncertain events. The chain of command is very clear, effective and every institution and person fall inline quickly to perform their duty. It does not require so many approvals or procedures to start working. President Xi Jinping ordered to work and theentire system took over the job ina mechanical manner. There were no hurdles, like coordination among provinces or institutions.
The finest example of this can be seen in the building of a new hospital in 10 days. Everything was available on time and there were no loopholes in coordination or execution. Second best available example is the execution of orders to control the movement of people. It was implemented in letter and spirit. The entire country observed the orders. Although US and other countries were criticizing the measures China implemented it. It helped China in controlling the spread of the virus. However, the government made sure that there should be no disruption in the supply chain which was gigantic task, keeping in mind the population size but China accomplished it. It is again a good example of institutional advantage.
Another major factor was that government of China had financial resources and it did not have to wait for help. Moreover, resources were owned by State not by private individuals. Therefore, state had the control to decide on spending. China did not lay off staff or create any uncertainty in the job market. All institutions performed their jobs and made sure that financial resources are as and when required.
Fear is grappling the countries. Fear factor is evident among all sections of societies. Private sector is pulling back money. Wall Street is in a free fall and federal government allocated US$ 1.5 trillion to sustain the market. Wall Street will have negative implications across the world. Iran is desperately looking for help. It has requested IMF for US$ 5 billion to face the challenge of COVID-19. Owing to sanctions,the situation is more complicated than elsewhere. Airlines across the world are halting its operation for weeks. It is leading towards laying off the staff.
Another question after the lock down is, will countries be able to keep their supply chains un-interrupted? It seems difficult, as major supply chains are dependent on private sector. Private sector is already laying off staff. The equation will become more complicated with time. It is expected that there would be major disruptions in supply chains which will aggravate the situation. This is high time to learn from China, on how China maintained its supply chain. What role institutions and governance played? Lastly, there is one lesson for the world specificallyUS and the West,they need to come out of the China fear and shall learn to cooperate. They should also learn from the role Chinese institutions played in combating the epidemic. The COVID-19 provided an opportunityfor cooperation. If countries refuse to cooperate, the world need to be ready for another economic recession. This recession would be more complicated and graver, may be more than 1930’s recession, which will be beyond capacity of world to face. The theory of “Systematic Rivals” needs to divorced and look for strengths from China Model, which can be easily emulated to combat COVID-19.
The writer is Director at China Study Center, SDPI
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The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.