The Orange County Register (California): China will pay for SARS debacle

Sunday, April 27, 2003

By BATES GILL
China studies expert at the Center for Strategic and International Studies in Washington, D.C.

WASHINGTON - The repercussions for China of the outbreak of severe acute respiratory syndrome will resonate well beyond the tragic - and growing - loss of life. Beijing's evasive and tardy response to the challenge of the SARS virus reflects very poorly on China's international standing, undermines its economic prospects and bodes ill for combating other infectious diseases.

The government's embarrassment was evident last week when it admitted that cases of SARS were many times higher than previously reported. At the same time, China's health minister and the mayor of Beijing were sacked. This was not the hoped-for auspicious beginning for the newly installed fourth generation of Chinese leadership and its widely touted goal of "building a well-off society."

By taking so long to reveal the real dimensions of the SARS problem, Communist Party authorities underscored their reputation as secretive and out of step with international practice. They have reminded foreign investors and the world at large of the uncertainties and contradictions in dealing with China.

News of falsified communications, deliberate misinformation, obstruction of U.N. assessment teams and reluctance to reveal the full extent of the epidemic to the World Health Organization must give pause to even the headiest optimist about real change in China. Beijing's aspirations to regional leadership have been stalled and will take time to put back on track.

The official Chinese response to SARS does not bode well for how the government might respond to other new, perhaps even more serious infectious disease threats. Beijing's reaction to SARS parallels its response to AIDS: denial, followed by reluctant acknowledgment and hesitant mobilization of resources to combat the epidemic.

And the steady spread of SARS, AIDS and other infectious diseases shows that even when authorities openly recognize a public health problem, they lack the infrastructure to fight back effectively.

Paradoxically, despite the sclerotic and old-style official response to SARS, China's society has become open.

SARS spread as rapidly as it did precisely because of China's expansive interaction domestically and with its neighbors. The international community supports this trend and wants to see China succeed in its social, political and economic transformation and its integration into the global main- stream.

Official Chinese tactics of suppression and concealment seem to work well in preventing what Beijing calls the "poisonous weeds" and "spiritual pollution" of serious political and social reform.

But Beijing's way of doing things now faces a serious challenge: to prevent infectious diseases from becoming major social, political and economic problems will demand greater openness, transparency and candor, both at home and with partners abroad.

The political system in China appears to be becoming more responsive. Yet the SARS debacle reveals a dangerous fragility beneath the surface of the country's rapidly transforming society.

Partly because it did not take steps promptly to address the public health crisis, the Chinese government will have to cope with a downturn in the economic health of greater China - consisting of the mainland, Hong Kong and Taiwan - as well as the wider East Asian region.

Singapore and Hong Kong have already trimmed official forecasts for economic growth as a result of the SARS outbreak, and private researchers see a similar SARS-related downturn in Taiwan.

Beijing is unlikely to issue figures on the economic impact of SARS.

But the decline in tourism, airline travel, trade and international confidence - in addition to the poor prospects of key economic partners in the region - will certainly be felt in China, particularly in hard-hit Guangdong Province, one of China's main engines of direct foreign investment and export-led growth.

Moreover, in an already skittish international economy teetering on the edge of recession, loss of confidence in greater China, the one area where there was some optimism, will have adverse implications for the global growth.

Morgan Stanley, for example, has lowered its estimate of East Asian economic growth, excluding Japan, from 5.1 percent to 4.5 percent for 2003.

And the SARS contagion may get worse before it gets better.

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