Category: COVID-19

Can Taiwan’s COVID-19 Diplomacy Help It Make Permanent Friends?

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Sanjana Krishnan, Research Intern, ICS

The world today is full of uncertainty due to the outbreak of COVID-19. While the rest of the world is still in the grip of COVID-19, one small island, namely Taiwan has been successful in flattening the curve. This was made possible by the proactive measures it took immediately after the first news of  the outbreak emerged from China. In a way, Taiwan was already in a state of readiness after the outbreak of SARS in 2003.  It was able to respond quickly by integrating the working of various ministries and employing advanced technologies to achieve good results. It implemented measures such as on-board quarantine, 14-day home quarantine, health declarations, fever screening and so on. The travel details of people are stored in their National Health Insurance cards to alert the concerned authority about any spread of the virus by using the GPS technology. This has helped in curbing individual and community spread.

Taiwan, a self-ruled island that has been denied entry into the World Health Organisation (WHO), is not only setting an example to the world by the way it has handled its internal situation but also through its help to other states by exporting medical equipment, especially medical grade masks. The territory is now the second largest producer of masks after China. According to its Economic Affairs Minister, Sheng Jong-chin (沈榮津), Taiwan produces 15 million masks every day. In March, it had relaxed the ban on export of face masks  and in April, shipped PPE and masks to its diplomatic allies and the worst hit countries in Europe. Taiwan  also announced that it would donate 10  million masks to the most needy countries and 100,000 masks per week to the United States. It has also promised to share its electronic quarantine system that employs big data analytics.

These measures helped raise considerably the profile of this self-governed island but, in turn, has attracted Beijing’s anger. Even as Taiwan received praise from various parts of the world for its effective measures and the help extended, China termed these a political game played by Taiwan to gain admission into the W.H.O and the acceptance of the world community. This accusation was made while also pointing out that Taiwan had banned its mask export when China was in its most vulnerable state with respect to the Corona virus outbreak.

China considers Taiwan a part of its sovereign territory, awaiting reunification even by force, if necessary. Today, there are only a handful of nations in Central America and the Oceanic region, that recognise Taiwan. Taiwan has even been kept out of most of the international organisations such as the United Nations, W.H.O and so on. The island is in a geo-political absurdity owing to the fact that even its most important ally, the US does not recognise its status as an independent state, its territory is under constant threat as it is claimed by a powerful state such as China and its sovereign status slowly erodes with both states and MNCs withdrawing their engagement with it due to the threat of upsetting China. In this context, the latest engagement of Taiwan holds significance.

The world is now forced to recognise the advanced healthcare and technological capability of Taiwan. The helping hand extended by the island definitely aids the improvement of its image globally. It has made Canadian Prime Minister Justin Trudeau, Japanese Prime Minister Shinzo Abe and U.S Secretary of State, Mike Pompeo call for greater inclusion of Taiwan in the work of the W.H.O. This move however, is sure to be blocked by China even though it marks a departure in spirit from the 2009 arrangement that China had agreed to for Taiwan’s participation at the annual World Health Assembly from 2009 to 2016 as an Observer. There has been a change since then. Taiwan has rejected China’s main condition for the former to be a part of the W.H.O, i.e, to accept that it is a part of Mainland China in May this year.

Taiwan today faces an opportunity to strengthen ties with other states and improve its international standing. Beijing has sought to strengthen its relations with Europe by sending them medical equipment. However, this has not meant necessarily that member countries of the E.U. have succumbed to Chinese pressure on Taiwan. Many of these states have accepted help from the island and openly acknowledged this help through Twitter.

Both China and Taiwan have been able to curb the first wave of the virus. But what brings praise to Taiwan is the fact that they did it without any support from W.H.O. Taiwan also shared COVID-19 related data with W.H.O. Although China is trying to bring in a narrative of it being helpful to the world, reports of suppression of news of its early outbreak from the media as well as export of faulty equipment has adversely affected these efforts. This has in turn been a supplementary factor in improving Taiwan’s image. While both China and Taiwan engaged in mask diplomacy, Taiwan has had more apparent and immediate success. Thus, exporting medical equipment, especially masks, has also become a tool of political expression.

Taiwan’s mask diplomacy has chances of increasing the support it gets from other states. The important question here is, how long this support will last and how far it will extend. Supporting Taiwan means directly going against Chinese interests. While such support may appear today as a necessity, this cannot last for long. States often behave differently under normal conditions and under emergencies. The common determinant here is national interest. While it might be in the national interest to accept Taiwan’s help and show acceptance towards it, it might not appear so in the future when such a policy will mean locking horns with a formidable power such as China. As the world gathers more knowledge and experience in handling the pandemic, its dependence on Taiwan will decrease. In international relations, there are no permanent friends or permanent enemies. There are only permanent national interests. Some alliances last only as long as some issues do. Therefore, the effect of ‘mask diplomacy’ by Taiwan may last only as long as the pandemic lasts.

China’s waning export-led growth: COVID-19 to accelerate the trend?

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Karthik Satheesh, Research Intern, ICS

Since the late 1970s, China had started to shift from a centrally-planned system towards a market-oriented economy. One of the most notable features of the post-1980s China’s economic development was its increasing participation in international trade. Chinese exports rose on average 5.7% in the 1980s, 12.4% in the 1990s, and 20.3% between 2000 and 2003. By 2003, China’s export growth rate was seven times higher than the export growth rate recorded by the world as a whole. By 2006, the year when China recorded the highest trade (exports and imports), trade constituted 64% of China’s GDP.

Many countries have followed the export-led path to growth in the past and have achieved rapid growth in GDP. However, the threat of facing a global demand crunch always looms large for these economies. During 2008-09 (global financial crisis) period, China faced the same situation- its export as a percentage to GDP (see graph below) fell to 24% in 2009 (as opposed to 36 % in 2006) and its GDP growth rate fell from 14% in 2007 to 9% in 2008. This is indicative of the fact that exports were imperative to China’s growth, and when faced with a global demand slump it fumbled. Even though China managed to have a relatively high growth rate in that period, such a situation is a nightmare to an export-led economy.

Since then there has been a steady decline in exports’ percentage in GDP for China. In 2018, this figure stood close to 19%- similar to that of countries like Egypt and Uganda. Meanwhile, GDP growth more than halved during this period from 14% to around 6% growth rate (in 2019).

Source: World Bank

The steady decline in exports and imports points to the fact that China is gradually reducing its dependence on exports. This can be further coloured by the fact that both exports’ and imports’ share in GDP have fallen massively, in this decade. This means that the consumers in China have been absorbing what otherwise would have been exported and as private demands are increasingly being met domestically the imports have also slumped (from 28% in 2006 to 18% in 2018).

China now seems to be focussing on boosting domestic consumption after decades of export-led growth strategy. According to the Economist Intelligence Unit, private consumption will soon constitute nearly half of China’s GDP. But is such a shift possible and if so, how? These are a few factors that have significantly boosted domestic consumption:

  • China’s per-capita income has more than doubled in the last decade thanks to its rapid growth. This means that an average Chinese have more than double the means to consume than he had a decade ago.
  • Another factor is the high adaptability and competitiveness of the Chinese retail market which ensures that home-grown retailers are always on the front line to extend goods and services to the booming consumer demand. Chinese retail market has shown extreme resilience and creativity and for the same reason, it is soon expected to emerge as the largest retail market in the world, surpassing the US.
  • Additionally, the fast-moving consumer goods market has shown excellent growth with around 4.3% growth rate in 2017 and it is expected to account for more than half of the whole economy by 2030 according to the Economist Intelligence Unit.
  • Consumer behaviour in China has been changing from conservative high savers to potential spenders. This fact is highlighted by tourism spending in the year 2018: Chinese tourists spent around $277 Billion which accounts to nearly 18% of global tourism spending which is higher than any other country.
  • Moreover, as of 2018, nearly 60% of China’s population lived in cities which indicated a high rate of urbanisation (urban population growth is around 2.4% annually). This bridges the gap between the middle-class buyers and the booming retail market in the country, which in turn helps in boosting private consumption.

All these aspects, combinedly, have bolstered the shift of Chinese economy’s dependence towards domestic consumption.

A similar trend could be seen in the shift from an industry-based economy to a service-based economy; in 2006 industry contributed 13% more to China’s GDP than services while in 2016 it was the other way round. A service-based economy is a salient feature of most of the developed countries.

If we observe these trends, China seemed to have been making a steady transition from an export-led industry-oriented economy to a domestic-consumption-led service-oriented economy. However, the novel Coronavirus pandemic has left its economy hanging in uncertainty. According to World Economic Outlook, China’s growth rate is expected to shrink by more than 5% this year; the GDP growth rate is expected to be 1.2% in the year 2020 while this figure was 6.1% in 2019. The great lockdown has affected the Chinese economy very much- retail market, tourism, export declining due to global demand crunch- all of which will have a negative influence on the economy. Although nations around the world are foreseeing a recovery as soon as possible, experts do not expect this to be a v-shaped recovery. The recovery period might give China, which has already lifted lockdown restrictions, an incentive to focus more on its domestic consumption and strengthening its retail market. Even though exports in China has bounced back significantly higher than expected in the month of April (though it has and will remain quite low because of the existence of lockdown in many of China’s partner countries), domestic demand appears to be resilient and increasing– a trend we have been witnessing even prior to the lockdown.

Global merchandise trade is expected to decline 13-32% due to COVID-19 and the WTO has commented that the decline in world trade due to this pandemic will likely exceed the one accompanied by the global financial crisis of 2008-09. The post-pandemic period most likely will witness an accelerating trend of declining dependence on export-led growth for China for various reasons:

  • Deglobalisation: Even before the pandemic struck, deglobalisation was increasingly spreading around the globe, fuelled by the Sino-US trade war and the financial crisis. The pandemic has further instilled a feeling of self-reliance and accelerated this phenomenon- politicising travel and migration, cross accusations and exposure of anarchy in global governance in the recent crisis has contributed to the promotion of deglobalisation.
  • Global Value Chain (GVC) under pressure: By becoming a hub for cheap and efficient manufacturing, China was an integral part of the supply and value chain of many goods. However, after the COVID crisis, major economic players are planning to shift their manufacturing and production facilities back to their own countries, away from China, foregoing the manufacturing efficiency and cost minimisation that globalisation has offered them in the past. This increasing pressure on GVCs means that China’s exports and manufacture sector will be affected in the coming years.
  • Lockdown in partner countries: During the height of the coronavirus outbreak in China (January-February period) exports plummeted 17.2% and in April there was a surprising 3.5% jump in exports. However, even though China came out of lockdown successfully its trade partners are still in lockdown and fighting the virus. Hence, global demand is expected to remain low for the months that follow.
  • Trade war: Even before the pandemic, the US-China trade war shook China’s trade with its largest trade partner, US. A small relief in the trade war came in January, in the “phase-one” deal, when both sides agreed to give concessions on heavy tariffs imposed before. Recently, the cross accusations and mutual blame have further threatened the progress that lies ahead of “phase-one” negotiations and could even aggravate the problem further. A trade-war at this point will be heavy on China’s side and will affect its trade drastically.  
  • Direct interventions: The Chinese government has adopted policies to boost domestic consumption in the country to mitigate the heavy losses in exports that accompanies the slump in global demand. These policies are aimed at brand promotion of Chinese owned brands and on the same hand reducing the market for imported goods. Additionally, there are efforts to establish domestic duty-free shops, encourage domestic tourism and also to attract foreign tourists which could boost domestic demand and result in increased domestic consumption.

The COVID crisis could accelerate the Chinese economy’s dependence on domestic-consumption, owing to the various factors discussed above, that are currently at play. Therefore, the trend that we can expect is a “reducing dependence” on exports in the coming years and an increasing dependence on domestic consumption, accelerated by the COVID-19 pandemic.

Strangers in the City: Migrant Workers in Indian and Chinese Cities

While political systems, level of State capacity and trajectory of development may vary, cities in China and India have retained many common threads of socio-spatial exclusion of migrant workers

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P.K. Anand, Research Associate, ICS

The ‘visibility’ of the migrant workers is the biggest urban predicament that is being witnessed during the nation-wide lockdown, which has now crossed 50 days. The images of their ‘reverse migration’ — whether entirely by foot, or through modes of transportation that are heart-wrenching — lay bare the desperations and anxieties emerging from the loss of livelihood and security.

Not that many of these journeys have happy endings — deaths due to exhaustion, or accidents leave behind more than just a trail of dead bodies. It is equally significant that since the lockdown started on March 25, there also exists a long list of casualties that cannot be pinned on the virus per se — including those related to mental health, often left at the periphery.

The brutal social experiment that is the pandemic has only reinforced and exacerbated the systemic exclusion and dispossession of circular/seasonal migrant workers/footloose workers, who inhabit Indian cities. A report titled Unlocking the Urban, released by Aajeevika Bureau —a non-profit organisation working among seasonal migrants in western India — released on May 1, highlighted the longstanding vulnerabilities of rural-urban migrants in cities. They often receive less than minimum wages, are engaged in manual work which last for long hours, which, are often even dangerous.

They remain unaccounted for by national statistics and are invisible to city-level administrations; precarity undergirds their working and living spaces, rendering them ineligible for social schemes and welfare programmes. These further lead to them being denied access to urban residence and governance; their survival in the cities is dependent on daily negotiations with informal actors, ranging from petty contractors to security guards, and even landlords.

The socio-spatial exclusion of migrants from Indian cities, and their statelessness in some ways, mirrors the nongmin gong (peasant workers) in China’s urban spaces, pejoratively called ‘floating population’; though the Chinese state has changed the terminology to xin shimin (new city residents) in order to fully ‘integrate’ them into urban centres, the desired results have not followed.

China’s Rural-Urban Dichotomy

The demarcation of citizenship in China into rural and urban is a legacy of socialist planning. In 1958, the hukou(registered residence permits), was introduced to regulate the flow of resources, especially labour, and sustain an agrarian countryside, while the State subsidised urban living. The economic reforms of the 1980s led to easing of rural-to-urban mobility, which, in turn, kick-started the long journey of labourers from the rural areas to the industries and companies in coastal provinces. The migrant workers have been crucial in the growth of many megacities in China today.

However, this infrastructural and economic growth of Chinese cities happened even as the migrant workers remained peripheral in China’s urbanity. The urban hukou — the foundation for a well-entrenched city life with access to public services, healthcare and education — is highly stratified and segregated, with eligibility based on the level of education, skills and status. The hukoucreates a division between privileged and entitled urban residents and the migrant workers. Though the migrant workers are tagged as ‘essential’, in reality they are ‘placeless’ and unable to make claims for a ‘right to the city’. The constant fear of eviction from their informal neighbourhoods and being at the receiving end of law enforcement’s brutal high-handedness, mirror the story of their Indian counterparts. Furthermore, the marginalisation of migrants in city spaces has also impacted the lives of their children in claiming access to healthcare and education.

Urban Citizenship

While the high level of decentralisation in China’s political-administrative system give the local governments significant decision-making powers, city governments — especially those in the megacities — remain intransigent in reforming the hukousystem. Beijing has repeatedly mentioned the need to reform the system but it more or less remains on paper. While small and medium sized cities have experimented with various models and pilot programmes, there remains reluctance from the big cities. It highlights the skewed nature of China’s tax and revenue systems favouring the central government, while the local governments bear the fiscal responsibilities. Thus, the big cities are resistant to reforms that add to their burden.

By the same count, with laws and regulations largely divided between the Union government and the state governments in India, local bodies (such as municipalities) are rendered powerless, without significant responsibilities. Such disempowerment of cities create constraints in developing specific and contextual regulations (for instance, in many cities migrant workers are not even enumerated).

Clearly, while political systems, level of State capacity and trajectory of development may vary, cities in China and India have retained many common threads of socio-spatial exclusion of migrant workers.

Originally Published as ‘Urban Spaces | Migrant workers remains invisible in India and China’ in Moneycontrol.com, 21 May 2020

Amid the Covid-19 Pandemic: Assessing US-China Relations

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Mohd. Adnan, Research Intern, ICS

Before the outbreak of Covid-19 pandemic in the United States, Sino-US relations were seemed to be heading towards achieving a bit of normalcy through agreeing the ‘phase one’ trade deal in mid-January 2020. The trade deal was achieved after a round of heated negotiations lasting over a year, when the US formally announced the imposition of tariffs on Chinese imports, in March 2018. This partial trade deal was considered to be a beginning of the US-China collaboration and normalisation of their strained bilateral relations. However, the outbreak of COVID-19 in the US has prompted many in the US administration, specifically US President, to question the Chinese intentions and its handling of Covid-19 pandemic. In response, China questioned United States’ handling of the Covid-19 pandemic. A war of words has taken place from the both sides over the origin and handling of Covid-19 outbreak since early March. Amid the accusations and blame game from both sides, the relations between these two countries significantly deteriorated in the last two months. Amid the unfolding of COVID-19, this blog post explores whether the United States’ belligerent approach towards China in last two months is mere a tactic to gain domestic support regarding the upcoming election or Sino-US relations are, indeed, moving towards a new height of confrontations.

In late January-early February 2020, amid the backdrop of crucial signing of ‘phase-one’ trade deal, it seemed US-China bilateral relations were heading towards normalcy. While China was struggling to contain the Covid-19 outbreak, US President, Donald Trump, on multiple occasions, had praised China’s professionalism and transparency in handling the Covid-19 outbreak. However, in early March, all these changed, when the cases of Covid-19 started to increase in the US. The Trump administration started to question China’s handling of pandemic. There is little doubt that the pandemic had its origins in China and initially, there was cover up by Party-state at the level of Wuhan. But the criticisms on China’s non-transparency, which did cost the world, shouldn’t be seen as a free pass to the US. Even though the World Health Organisation (WHO) declared the outbreak a ‘Public Health Emergency of International Concern’ on 30 January, many countries including the US did not give the virus outbreak serious attention, delaying formulation of effective measures to contain it.

COVID-19 pandemic has inflicted significant human and economic costs to the US -at the time of writing this, around a million people have been infected and above seventy thousand have succumbed to death. Further, US economy has taken a serious hit and the real extent of this damage will only surface once the situations started to normalise, with many equating it with the Great Depression before the World War II. Unemployment rate in US has hit record high more than 22 million people have applied for financial aid as of mid-April. According to the ‘advance’ estimate data provided by Bureau of Economic Analysis, United States’ real  gross domestic product has contracted 4.8 per cent in the first-quarter of 2020 and it is expected the things will get worse before improving in the second half of the year. The US President’s repeated statements to open economic production at the earliest, indicates the desperation of the administration in an election year.

The approval rating of President Donald Trump has declined since the outbreak of Covid-19. In an article published by CNBC on 25 April, it was noted, ‘in January, (US president) Trump planned to run for re-election on the strength of a booming economy and a pledge to keep fighting the “deep state” government bureaucracy. But that all ended as soon as the coronavirus pandemic gained a foothold in the United States’. To augment this argument, on April 17, in a leaked report obtained by Politico, the National Republican Senatorial Committee sent a 57-page written Memo to its electoral candidates advising how to counter the candidates of the Democratic Party. In the short version of this Memo, Republican candidates have been advised to follow China-centric issues; like how China caused this pandemic by ‘lying’ and ‘covering it up’ and ‘hoarding of medical equipment’. Further, it also advised to present, China as an ‘adversary’ and the Democratic candidates, as ‘soft on China’, while Republicans were ‘tough’, being capable of confronting China. Moreover, on 29 April, in an interview with Reuters news agency, Trump directly accused China of seeking his loss in his re-election bid. It seems that the delicate predicament that emerged due to the COVID-19 has prompted the Trump administration to shift the blame towards China in the run up to the Presidential election in November 2020.

Moving on, the recent blame game and deteriorating relations between the US and China is not only limited to domestic compulsions but they are, indeed, moving towards a new height of confrontations. Along with the United States’ belligerent postures, China, too, has adopted an aggressive and assertive approach, which has not been seen in recent years. In the process of blaming each other, a war of information has taken place between the US and China. While Beijing was busy to burnish its image and enhance legitimacy – tarnished by its initial mishandling of the outbreak – by sending medical teams and equipment around the world to assist the fight against COVID-19, Washington DC used every opportunity to ratchet up tensions, starting with multiple accusations on China’s non-transparency and suppression of crucial information. In mid-April, President Trump even questioned the authenticity of Chinese data on the infected cases and reported deaths.

In retaliation, China accused that the US was unable to handle the pandemic therefore it is trying to shift the blame. Theories such as ‘Corona virus was brought by the US military in Wuhan’ and ‘Chinese model of governance is better than the democracy’ were also propagated. On 28 April, amid the accusations of ‘covering up’ and not being ‘transparent’, China’s Executive Vice Foreign Minister, Le Yucheng, in an interview with NBC questioned United States’ handling of the  outbreak and denied the accusations that China has ‘covered up’ and ‘under-reported’ the Covid-19 cases and deaths. He further added, ‘unfortunately, some political figures are politicizing this Covid-19. They are using this virus to stigmatize China. This is not something we are willing to see’. In this war of information to enhance one’s legitimacy and degrade the other, questions have also been raised over the role and authenticity of WHO; the US administration has even halted their funding to the WHO, accusing them of complicity in Beijing’s initial cover-up.

The US is targeting China’s State Owned Enterprises (SOE) – earlier in April, several US executive agencies urged the Federal Communications Commission (FCC) to revoke the license of operation of China Telecom in US territory, citing risks for national security. In this regard, the FCC sent a ‘show cause’ notice to three state-controlled Chinese telecommunications operators including China Telecom. The US is also planning to impose severe restrictions on its own companies from exporting certain technological products, especially the semiconductor production equipment, to companies related with Chinese military.

Amid the devastating effect of COVID-19, world’s reliance on China for essential supply has come into spotlight. The call to bring back home or relocate major US companies’ production units away from China in the height of trade confrontation has intensified. Earlier in April, Larry Kudlow, US National Economic Council Director, advocated the same by ‘paying moving costs’. Further, several US Senators have also been voicing the same in order to reduce dependency for essential supplies.

Issues such as South China Sea dispute, Hong Kong protests, Taiwan, and human rights have been flaring-up between these two states. The pandemic has not constrained China in being assertive in South China Sea – it placed the administrative jurisdictions of Spratly and Parcel Islands under the Sansha administrative unit – a city in the island of Hainan. Apart from that, China has also collided with other claimant countries in the disputed South China Sea. In early April, a Vietnamese fishing boat was drowned by a Chinese maritime vessel. Various other incidents have occurred where Chinese coastguard vessels have been seen posturing aggressively in the whole region including South China Sea. In response to this, the US has increased its maritime patrolling in the disputed area; US warships have sailed through the disputed areas on two separate occasions evoking harsh criticism from China.

The Taiwan issue has remained contentious in US-China relations. While, over the years, Beijing, has been trying to curb Taiwan’s remaining diplomatic relations. The US, on 26 March, enacted a law called as ‘The Taiwan Allies International Protection and Enhancement Initiative, which  requires the US, to assist Taiwan in acquiring memberships in international organisations where statehood is not a precondition and also proposes to take unspecified action against countries which ‘undermine the prosperity and security of Taiwan’. This move by the US, expectedly, drew severe criticism from China accusing the US of ‘interfering’ in its internal matters by ‘violating’ the principle of ‘One China’ Policy.

While it appears, to a large extent, that the recent anti-China rhetoric by the US administration is politically motivated by domestic electoral compulsions, there are factors that go beyond that. These recent developments only indicate the further deterioration of relations between both the countries. It may be surmised that the trade deal will not necessarily reduce the tensions. Until the US continues to perceive China as a challenger to its hegemony, it is unlikely that relations between them will be of mutual collaboration and cooperation.

Superpowers and spirit of International Cooperation in a Pandemic

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Anu Dhull, Research Assistant, ICS

The grip of COVID-19 pandemic across the globe has showed albeit in a brutal way the extent of global connectivity. However, the responsive measures taken by major powers to deal with the contagion have exposed the hollowness of their commitments for global cooperation, especially at a time when it is most needed. In hindsight, this has been most visible in the actions of the USA and China. These have belied all the commitments made under phase one deal in January 2020, which had been agreed by both after more than two years of tariff or ‘trade-war’. Effects of the levying tariffs and counter tariffs had not only affected the economy of USA and China but also rendered the global economy and market in a doldrums. Hence this deal came into picture reflecting the need of a fair and mutually beneficial global trade practices. Their unilateral actions and their foreign policy decisions vis-à-vis each other during this pandemic – when international cooperation is most required – have questioned their willingness of a truly globalized world with peaceful cooperation.

Talking about China where the outbreak started, it has widely been accused of containing the information. Criticisms have come in despite the containment measures being seen as effective. At this time not only did the US President failed to recognize COVID-19 as a threat by ruling out any possibility of it becoming pandemic; but also resorted to stigmatise the disease despite warning from World Health Organisation (WHO) to not do so.

The US has labeled the disease as “Wuhan Virus”, “Chinese Virus”, etc. and blamed China for the repressive measures against its own population. In March, with China recovering from the first wave, the tables were turned as China blamed the US Army for bringing COVID-19 to its territory, as a ‘bio-weapon’. Therefore, betraying its own vaunted principles of peaceful cooperation and mutual benefit, China did not extend any help to the USA. These counter accusations were given weight – and paralleled – by China’s own diplomatic overtures of ensuring medical supplies and knowledge to other parts of the world. However, President Xi Jinping’s “idea of building a community with a shared future for mankind” also proved to be rhetorical as it “sells” medical equipment rather than donating them.

This blame-game has spiralled into further accusations and counter-accusations, extending to actions against media – the US tightened rules on Chinese state media organizations including Xinhua news agency inside its territory to tackle the aggressively growing Chinese State-controlled propaganda, and by the same count, China expelling journalists working for New York Times, Washington Post and the Wall Street Journal.

While China claimed of successfully containing the virus, the USA was in the midst of rise in positive cases. In such a situation, instead of assisting US from its experiences of fighting the disease, the Chinese Party-state only sought to criticize the USA for its lack of preparedness. Despite overtures through telephone calls between Xi and Trump, where they decided to take joint actions that has not necessarily translated into meaningful action. Further, neither did USA approach China for any joint research on the virus or on measures to counter its spread, nor did China extend any helping hand to the hard hit public health system in the USA.

Both the USA and China have made significant advances in technological innovations in natural sciences; however, neither of them are acting responsibly in such a time of global crisis. Instead of practicing and emphasizing on cooperating in fighting the disease, both are engulfed into diplomatic and rhetorical battles. Rather, both are more focussed on the stability of internal ‘political regime’ and the blame game adds grist to the mill. Their actions and behaviour only cripples the global efforts to harness resources and strengthen the flailing health infrastructure in many countries. Even while multilateral organizations and regional groupings are making efforts to pool resources – example being the SAARC COVID-19 Emergency Fund – and coordinate,  the actions of the two major powers goes against the grain of a globalized world, that requires everyone to pull together.

COVID-19 Crisis: Is the Communist Party of China facing a Crisis of Legitimacy?

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Mahesh Kumar Kamtam, Research Intern, ICS

Today the world is witnessing an outbreak of a pandemic ‘COVID-19’, unseen in the recent past, illustrating the fragile nature of a globalized world. As the virus outbreak continues to create global reverberations, the case of ‘COVID-19’ becomes even more relevant to the Communist Party of China (CPC). The pandemic could put the regime in a precarious position, threatening the unwritten social contract between CPC and Chinese people, since the legitimacy of the Party is driven by its ability to deliver economic prosperity to its citizens.

China is more connected to the world today than in the past. According to the World Economic Situation and Prospects Report 2020, released by the United Nations Commission on Trade and Development (UNCTAD), China alone contributed 0.75 percent out of an average 3 percent of the global growth. These indicators not only reflect a major trend in globalization, but also the extent to which China is connected in a globalized world. Global economic integration has driven China’s domestic growth in the past. But with global growth set to slow down significantly due to COVID-19, early predictions show signs of recession. As the IMF rings alarm bells on a possible recession, CPC is set for more challenging times as the world enters an era of instability driven by COVID-19.

Increasing global integration and complex challenges due to globalization have domestic repercussions. The inability to maintain economic growth and rise in inequality fuelled by low growth in future are more immediate threats that could undermine the social contract between the people and the Party causing domestic instability. The rise in ‘uncertainty’ casts a shadow of doubt on the goals set forth by the Party, particularly when China is entering into a “New Era”—where Xi Jinping targets to achieve a “moderately well-off society” (Xiaokang society) by 2021— the hundredth anniversary of the formation of CPC.

What is more worrying for the CPC at the moment is the echoing of the anger from Chinese people themselves against Xi’s rule. Xi has been facing criticism of his handling of the COVID-19 crisis and social stability threatened by a slump in production are one of the biggest challenges that CPC is set to face in the next few years. Although CPC has shown the ability to manage ‘domestic uncertainties’ by delivering economic results, mastering propaganda and controlling the flow of information in the past, these strategies are becoming increasingly ineffective for ensuring legitimacy of the Party and its leadership.

There was mounting discontent among Chinese citizens in the early stages of the outburst of COVID-19 as local officials tried to hide the truth about the outburst. The death of Li Wenliang, the doctor who alerted Chinese local officials during the early stages of the virus outbreak, became a breaking point. Li was forced into silence by local officials who hid the truth about the outburst. This event led to widespread discontent among netizens. Popular social-network sites Sina Weibo and WeChat surfaced with the lyrics of a song, Do you hear the people sing” popularized during the Hong Kong protests in 2019, denoting public anger and failure of early response to COVID-19. CPC blocked the ‘anthem of protest’ in mainland China and subsequently, launched a massive propaganda operation to regain lost legitimacy. Eventually, it was forced to sack Hubei Party chief Jiang Changling and Wuhan mayor Ma Guoqiang in an attempt to calm down public anger and channelize resentment away from the Centre while trying to alleviate growing citizen distrust of the central leadership and Xi, in particular.

The newly appointed Provincial Secretary of Wuhan launched a “gratitude education campaign” during the outbreak, to create a favourable impression of party’s image in fighting COVID-19. However, it backfired as the Party was criticized for placing itself above the hardship endured by Wuhan residents. They were enraged because of poor conditions in hospitals, lack of adequate timely care and soaring food prices. In yet another instance, real estate tycoon and princeling, Ren Zhiqiang penned a powerful article that got circulated on Weibo. He was critical of Xi’s handling of the COVID-19 crisis and called him “a clown with no clothes on who was still determined to play emperor”.

These incidents provide early indications of Xi losing control over the CPC narrative and thereby, his legitimacy to lead. However, Jude Blanchette, Director of China Studies program at the Center for Strategic International and Security Studies argues that the “CPC has reoriented itself from time to time to meet the changing demands in the society and CPC is more focused on ‘long-term threats’ than the short term disruptions like COVID-19 crisis”.

Indeed, it is true to some extent that COVID-19 may be a short-term disruption rather than a long-term threat to the stability of the Party and Xi’s leadership. The mounting discontent against the state is a sporadic outburst of anger rather than a sustained and coordinated movement challenging the ‘Party’s mandate to rule’. However, we can still expect that it could bring more democratic order in Party though not necessarily democracy, by furthering “intraparty regulations”, promoting information disclosure particularly by local party offices at the time of emergency crisis like COVID-19, thus pushing for more transparency in the Party.

This article was earlier published in The WION under the title ‘Communist Party of China and the crisis of social contract in a globalised world’ on 13 April 2020.

Eye on Labour amidst Lockdown: Taking a China lens

The images of migrants on roads across India should perhaps help us re-evaluate the often romanticised images of the massive movement of workers annually in China

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P.K. Anand, Research Associate, ICS

The nationwide 21-day lockdown announced by Prime Minister Narendra Modi to contain the spread of the COVID-19 pandemic in India has completed 10 days. Being the second-most populous country in the world, India’s lockdown has been a massive exercise involving stopping all forms of public transport, closing down educational institutions, and recreational facilities, and all other avenues of gatherings/congregations across the vast territorial swathes of the country.

The lockdown has generated considerable debate not only on its viability and necessity, but also on its implementation and the resulting effects.

The incrementalism adopted in India’s approach ever since the outbreak in China occupied news space in mid-January — from airport screenings, to visa restrictions and later tracing of contacts and travels of infected people — has also been subjected to scrutiny by public health scholars and experts. The reasons for reluctance of the government to scale up testing at a mass level, even as cases spiked across India, appears to be twin-fold — to avoid a panic and chaos on one hand, and reckoning with the reality of a creaky health infrastructure, amplified by the lack of requisite resources, personnel and equipment, on the other. Even now calls for mass testing than just mere lockdown continues to go unheeded.

Even though Italy was the first country to impose a nation-wide lockdown, the playbook has emerged from China in its complete shutdown of Hubei province (while allowing other provincial and sub-provincial administrations to calibrate measures as deemed necessary in their jurisdictional regions). However, there has been enough reams and ink spent on explaining the impossibility of replication of the Chinese model — which has been undergirded by the authoritarian one-party state system that is decentralised, possessing extensive reach and high-organisational capacity — in democratic, diverse political systems. Further, the party-state massively employed technology to ensure social and political discipline. The party-state’s efforts to ramp up testing and large-scale mobilisation of resources have acted as force multipliers in its combat against the contagion even though the initial cover up, censorship and failure to track it in the first place have come in for criticism.

Nowhere has the planning and viability of the lockdown been questioned than by the heart-wrenching images of displaced migrant workers and their families, fleeing cities to their native places in the Indian hinterland on foot, riven with fears and anxieties of lost livelihoods and absent State support. In fact, these images and stories have generated significant traction to the argument of privileging the middle classes and urban elite in India, who have the wherewithal and space to practice social distancing as well as be able to exercise the option of work from home. Unlike them, the poor and daily wage, low-paid workers who constitute the informal sector and are at the frontlines in keeping essential services thriving, have a hand-to-mouth existence.

The images of migrants on the road also engages us to perhaps re-evaluate the often romanticised images of the massive movement of workers annually in China, for Chunyun, or the 40-day period with the onset of the Lunar New Year holiday, cramping through trains and other public transport (incidentally that movement this year was termed to have accentuated the spread of the virus).

That China’s migrant workers, often termed as floating population, have to traverse great distances to work in manufacturing and services, mostly in coastal regions or bigger cities, reflects the failure to develop viable regional economies. This is line with the high level of inequality prevalent in China, both regional and income related. The obduracy and rigidity of the country’s urban registration system — or, Hukou — that excludes the low-paid migrants from accessing rights and services in Chinese cities, also finds echoes in how ‘invisible’ the migrant workers have become in Indian scenario.

While democracy versus one-party state value judgements have often tended to dominate India-China comparatives, ideally the metric to test the State has to be State capacity; the ability of the State to provide goods and services to its citizens, especially during times of crises and distress. Herein, in spite of its authoritarian State system, with censorship and restrictions on freedom, China has a higher State capacity compared to India. That in turn, means a more formalised economy, with even social protections built into employment contracts (even if the implementation on the ground has been tardy).

Rome was not built in a day, and that applies for State capacity as well. Perhaps this pandemic and the lockdown, and the stark images left in its wake, will finally activate the Indian State to unlearn and learn, and reshape itself as a provider than remain only as an enforcer.

Originally Published as ‘Labour, lockdown and the State’s predicament’ in Moneycontrol.com, 3 April 2020