2020年1月24日 星期五

The Interpreter: China's tragic flaw, explained

Understanding the coronavirus outbreak

Welcome to The Interpreter newsletter, by Max Fisher and Amanda Taub, who write a column by the same name.

On our minds: The coronavirus outbreak in China and what it says about the flaws and contradictions in the country’s political system.

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The Anecdote We Use Over and Over to Explain China

Workers spraying disinfectant in a train in Seoul, South Korea, in an effort to prevent the spread of the coronavirus.Hong Yoon-Gi/Agence France-Presse — Getty Images

One of Max’s more Thomas Friedman-ish habits (something we say with nothing but respect for our opinion columnist colleague) is telling the same anecdote about China’s political system over and over, every time the subject comes up, to try to give people a useful way to think about it.

China’s political system is again the focus of global attention as the world waits to see whether the country can manage the worsening outbreak of a disease called coronavirus, and Max is once more trotting out his decade-old anecdote. But we think you’ll find it’s actually pretty helpful for understanding today’s crisis.

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Ten years ago, China announced it would slash the steel exports that it had been pumping into the global economy for decades. Max, new to the beat, called up an expert and asked whether he was right to see this as a sign of something important: that China was finally transitioning from an export-driven economy, which relies on cheap labor and a cheap renminbi, to a middle-income economy based on domestic consumption.

Economists had always said that China would have to make that transition; it was getting too wealthy to keep its currency and labor so cheap. Political scientists had said it would be essential for the country’s long-term political stability, bringing higher wages and standards of living. But it would also require downgrading the export-driven industries, like steel, that had long fueled growth. And it would mean taking on the politically powerful people who benefited from those industries.

And now it was happening! What great news — right?

The expert laughed at Max’s question (that happens when you’re new to a beat). China had been announcing cuts to its steel production for years, the expert said. And, every year, steel production went up.

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China’s central leadership could demand steel cuts until their faces were blue. Out in the provinces, the officials who actually oversaw steel production were going to do no such thing. Pumping out steel was how they grew their provincial economies.

And while it’s true that their bosses had demanded steel cuts, they had also always made economic growth the top priority. Rising G.D.P. figures would be rewarded, but stalls would be punished. Better to take a small hit for overproducing.

And there was also a collective action problem. All of China might be better off if steel production dropped, sure. But officials in individual provinces could only control their little corner of the economy. And if they believed that every other province was going to continue overproducing steel, then cutting back would change nothing.

That expert, of course, was right. The announcement changed nothing: China’s steel production continued to rise.

We’re thinking about that story today as China struggles to contain the coronavirus outbreak, which has killed 26 people as of this writing.

It’s still not clear what precisely caused the outbreak. But there are already indications that China’s built-in disconnect between the interests of local leaders and their central party bosses may have slowed the response.

“When you look at a coronavirus, it looks a lot like what happened with SARS, it involves a very similar template,” John Yasuda, who studies Chinese governance at Indiana University, said, referring to the 2002 outbreak of SARS in China.

SARS was initially allowed to spread, it eventually emerged, because local officials suppressed information about early infections rather than alerting their bosses.

That has long been an issue in China: Local officials know they will be punished for complications, so they hide or downplay them.

“That’s why you never really hear about problems emerging on a local scale in China,” Mr. Yasuda said. “By the time that we hear about it, and that the problem reaches the central government, it’s because it’s become a huge problem.”

The flip side is that, once a problem becomes a national crisis, the central government can divert vast resources and order swift action, as we’re already seeing with the quarantines of several Chinese cities.

But a late response can be especially dangerous with diseases. By the time one has spread widely enough to be deemed a national crisis, it can be much harder to slow.

“Once a clear problem has emerged, it’s very good at diverting resources,” Mr. Yasuda said of China’s political system. “But it’s not good at dealing with emerging problems. So it’s built to be reactive instead of proactive.”

And then there are the so-called wet markets — food markets stuffed with livestock that are living and dead, domesticated and wild — that have long been considered a public health risk, and are already considered a possible source of the coronavirus outbreak.

This, like China’s overproducing steel manufacturers, is a problem of both coordination and crisscrossing priorities.

Local officials would probably love to replace the wet markets with modernized food markets, Mr. Yasuda said. But this would be politically costly, inviting blowback from local citizens who prefer the traditional version, and from the economic interests tied up in them. Why invite the risk, especially when central leadership has not made reforming food markets a priority and so might punish officials who cause trouble?

Food safety issues are especially difficult for China’s system to handle, Mr. Yasuda said, because the country’s fragmented institutions and local governments are not really built to cooperate. They’re operate as quasi-independent fiefs, loyal only to the central leaders who control their fates.

“It’s an extraordinarily complex system and it’s very difficult to optimize,” he said, particularly for regulatory issues like food safety and environmental protection. For any regulatory system to work, he added, “you want it to be standardized, you want it to be transparent, you want it to be accountable.” China’s are none of the above. That doesn’t mean that food safety is poor everywhere, but that standards are never uniform across the board. All it takes is a handful of poorly regulated food markets for a disease to transmit from animals to humans.

But conflicting political incentives have been causing food safety problems in China for some time. Maybe most famously, in the mid-2000s, Beijing’s central leaders made a big deal about getting consumers to drink more milk, which would theoretically make them healthier. It pushed that out to state-run industries, which couldn’t meet the ambitious production targets. Instead, it started recruiting huge numbers of small-town farmers to switch to dairy production. But many of them were new to dairy were also unable to meet their quotas. Too much of their milk was rejected for its poor quality. So a number of the farmers started putting an industrial chemical, known as melamine, into the milk. This tricked the quality sensors into thinking that the milk was up to standard. That milk got pulled into vast, national distribution chains and poisoned an estimated 54,000 babies, six of whom died.

This is a recurring story in the struggle to govern the most populous country in human history, all while transitioning from near-medieval agrarianism to superpower-level wealth and maintaining Communist Party rule. Super-ambitious development goals and strict policy directives are issued from the political center, but implemented by local officials whose interests and incentives might be very different. Sometimes everyone’s interests line up with the public good. Sometimes they don’t.

The causes of the coronavirus crisis may turn out to have little to do with the flaws and contradictions of the Chinese political system. Scientists are still unsure what animal likely transmitted the disease to humans, for instance.

But the fact that many experts already suspect that those flaws and contradictions are playing a role — and that many past crises did turn out to originate in political incentives that went against the public good — goes to show that the system remains very much a work in progress.

How are we doing?

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