Thursday, 20 February 2020

China’s Facade of Stability

Recent stresses have exposed the lack of trust at the core of Beijing’s repressive model.

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Medical staff in a makeshift hospital in Wuhan, China, Feb. 14.

PHOTO: STRINGER/SHUTTERSTOCK
There exists today no vaccine for the coronavirus now engulfing China. That is a challenge for President Xi Jinping as he struggles to contain it. But the spread of the coronavirus has revealed a truth that poses a much greater risk to Mr. Xi: There is no cure for Chinese communism except the collapse of the party.
The more Mr. Xi pursues his authoritarian agenda, the more distrust he will sow at home and abroad. Far from transforming Beijing into the world’s leading superpower, his policies will instead keep China from taking its rightful place of honor in a peaceful, modern and integrated world.
This much should already be clear from how badly Chinese authorities have botched their response to a virus that each day claims more innocent Chinese lives. The first culprits were the local authorities in Wuhan. When Dr. Li Wenliang tried to alert people about a potential outbreak, the official response was to have the police pressure him to sign a letter that accused him of spreading rumors and disturbing public order.

Then, when the outbreak did happen and a seafood market was identified as the probable origin of the virus, local authorities closed it down. They hid the threat, telling the public that the market was merely being renovated. In other words, as the outbreak was already under way the local government did what Communist governments always do: cover up.
Deception is China’s true rule of law. Now the world must start asking something that Chinese people living under communism ask themselves every day: How reliable can China’s political, social and economic institutions be when its local government leaders routinely lie to their citizens and superiors alike?
Mr. Xi has no understanding of this. He talks of a “people’s war” on the coronavirus and has mobilized vast resources to combat it. Communist governments excel at mobilizing resources because they are command economies, and these big actions—quarantining entire cities, deploying the military, building hospitals overnight—can look impressive.
But their efficacy is hobbled by the lack of free communication. That’s what prevented Dr. Li—who himself succumbed to the virus Feb. 7—from getting his findings out in a way that might have avoided much of this pain, and the same problem makes it so that no one in China can ever trust what anyone else says.
That goes for Mr. Xi himself. China’s president cannot trust the information he is getting. The lack of trust means he must make decisions in the dark. No institution can function effectively this way.
This same lack of trust was behind the recent trade war between China and the U.S. The Americans are eager to trade with China. But they don’t trust China to play by the rules. Their fear, shared by many other nations outside China, is that once the door is open China will use its enormous economic heft to introduce its dishonest practices into the global trading system.
To allow institutions devoid of trust to distort the norms of global free trade means, at a minimum, higher costs of doing business. When there’s no trust, law doesn’t rule—it imposes or cheats. The whole market becomes the Wild West.
In contrast, the free and open institutions of the Western world create and encourage spontaneous interactions among knowledge, ideas, goods, services and money, mainly through price signals. This is how the rule of law encourages a self-regulating market system that draws out human initiative, even in the absence of any overall human plan.
Nobody designed the free institutions of the rule of law and private property rights. They evolved with Western civilization. But the market cannot function properly without them. China itself could never have grown into a superpower in the past 40 years had it not adopted free-market practices and institutions from the West.
Mr. Xi and his associates think China has now grown big enough to challenge the West. But with what? Economic power? Yes, China is enormous, but if Chinese trade and investment stop working for the West, China’s economic might will diminish. Outside its own borders, China must compete and cooperate according to Western rules and values. Mr. Xi’s ways of doing things can survive only within his police state.
This is the problem now before the world: the rise of a Goliath-like China no one trusts. The spread of the coronavirus simply drives home the costs of this distrust.
Ask yourself, if you were worried about how the coronavirus might affect you or your family, which would you trust more for the latest updates and best advice: a press conference by Chinese medical authorities in Beijing, or one given by officials at either the Geneva-based World Health Organization or the Atlanta-based Centers for Disease Control and Prevention?
The Communist Party sees things differently. Its leaders are betting that projects such as the Belt and Road Initiative, Huawei’s advanced 5G wireless networks, and the Made in China 2025 industrial policy will ensure China’s global supremacy in the decades ahead.
Let’s assume all these initiatives bear fruit. Even then, China won’t dominate because Western domination isn’t based on its projects or technology. These things come from a way of life built around trust. Without institutions and a culture of trust, the “China Dream” will prove empty.
Meanwhile, the Chinese Communist Party continues to rule using deception and fear. But as the coronavirus evolves into a global pandemic, it undermines the case for authoritarian competence. Even worse for party leaders is the potential for public unrest when the fear of death seems more menacing and immediate than the fear of dictatorship.
On popular Chinese social media such as WeChat and Weibo, Chinese people are already venting their dissatisfaction. There was a strong reaction when Dr. Li died, and the government had to suppress remarks and close accounts. The longer the coronavirus lingers, the more combustible the atmosphere.
The devil’s bargain Mr. Xi has always offered the people of China is this: Surrender your freedom, and in exchange you will enjoy continuing material improvement in your day-to-day lives. But if the consequence of surrendering your freedom may be losing your life, that becomes a much harder sell.
Today Mr. Xi is seeking still more control as a means to stop the coronavirus. But control does not mean stability—especially when it helps create and feed a health epidemic. If the coronavirus does nothing more than expose this single truth, it may prove as revolutionary as any event in China’s history.
Mr. Lai is founder and chairman of Next Digital, owner of Apple Daily.

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