Political and Economic Aspects of SARS

The dangerous epidemic has its certain advantages for China

This article is neither political nor scientific. As it is well known, science unveils the laws of nature, society and thinking. Politics is connected with state and military secrets; science does not unveil secrets - intelligence does. Let's try to analyze the situation with the SARS epidemic in the world. The initial stage of the viral epidemic in February-March of the current year was pushed far into the background with America's strike on the top of the "axis of evil" - Iraq. The peak of the epidemic in April and May attracted the attention of the whole world right around the time, when the economic situation in the US did not get better at all, despite the victory in Iraq. Oil prices remained on the same level - $23-26 per barrel, while the dollar dropped by 15 percent against the euro.

The situation with the SARS virus was kicked off in the middle of March, when media outlets reported a strange death of a businessman at a Hanoi hospital, who had come to Vietnam from Hong Kong. Several Hong Kong-based Chinese nationals fell ill with a strange disease soon after that, and the authorities of the Chinese province of Guangdong finally acknowledged a large number of unusual respiratory ailments.

On March 16th, the media exposed the name of the disease - the "Chinese pneumonia." Doctor Carlo Urbani from the World Health Organization died on March 31 - this doctor was the first to diagnose the illness for a businessman, who had come from Hong Kong.

World media came to conclusion that Chinese officials deliberately concealed the danger, the consequences of which might have been a lot worse in comparison with the Chernobyl disaster. In return, Chinese authorities launched a campaign to provide as much information as possible about the epidemic. Healthcare minister and other officials of the Chinese government have been dismissed from their positions. After that China started providing scary information and news reports about the number of sick people, disinfecting measures, quarantines, and so on.

As the World Health Organization reported, the SARS epidemic had penetrated into 33 countries of the globe as of May 12th, 2003. The number of infected people is 7,447, 552 people have already died of the virus. It is worth mentioning that the number of ethnic Chinese is the largest in this statistics - 95 percent. In addition to that, the integrity of the Chinese nation is determined with blood too, besides the language and the culture. More than 70 percent of ethnic Chinese have the same blood group (the second group) and they are Rh-positive.

Now let's try to estimate the political aspect of the situation, comparing official statements from the American and the Chinese government. George W. Bush's republican administration had to face the economic recession problem. Economic levels failed to bring any result, so Americans went along the traditional military and political way to improve the situation. After terrorist attacks on the WTC and the Pentagon in 2001, the US administration announced a crusade against the international terrorism. The coalition of the forces of good defeated the refuge of the forces of evil at first in Afghanistan in 2002 and then in Iraq in March-April of 2003.

The Chinese administration changed in November of 2002. The new Chinese leadership with Hu Jintao at the head had a goal to launch the new stage of the economic growth. All of a sudden, the Chinese nation had to face a dangerous virus against the background of the economic growth of 9,9 percent of the first quarter of 2003 (compared to zero percent in Japan and in the European Union). Chinese media started talking about the struggle of the Chinese nation with the epidemic, while Hu Jintao set a goal to defeat SARS and provide the economic development. A positive piece of news was reported all over the world on May 7th: an anti-SARS remedy had been found. On May 14th, the official Xinhua News Agency reported that the SARS epidemic had been taken under control. A bit later it was said that the epidemic had been liquidated in Canada and in Vietnam. Someone even said that the viral epidemic would be over with already in July.

Now let's deal with the economic aspect of China's struggle with the epidemic. There have been a lot of things said about the losses of such industries as tourism, hotel business, passenger transportation, retail sales, and so on. However, other industrial branches have been given an impulse to grow. The contribution of services in the growth of the whole Chinese economy is insignificant. Industry is the driving force of the Chinese economy. The SARS epidemic resulted in the development of such industries as pharmaceutics, textile industry, information science, the car and bicycle industry, and so on and so forth. As a result, China's foreign trade turnover gained 33,8 percent in April of 2003, having surpassed the level of $70 billion a month. The Asian Bank for Development gave loans to the territories, which had suffered from SARS, whereas the Chinese government converted them into targeted investments for the construction of infrastructure objects to "improve public and sanitary conditions." The economic growth in April made up 8,9 percent, investments in basic industrial funds increased by 29 percent, the added industrial value gained 14,9 percent, while the number of criminal cases dropped by 18,9 percent.

Having closed its borders on account of the epidemic, China isolated itself temporarily from the rules of the World Trade Organization. Moreover, the WTO, the IMF and OPEC were surprised with China's decision to reduce domestic wholesale prices on petrol and diesel fuel (approximately by seven percent) in May under the pretext of negative consequences compensation. The costs of all productions in China have been reduced, whereas the competitive ability of all Chinese goods has been increased on all markets.

China is not intended to conceal that the struggle with SARS is aimed at the increase of the internal demand. The virus has already become an incentive to increase the GDP of the Chinese economy.

Here is a moral aspect of the story. People are psychologically depressed in Beijing, Guangzhou, Hong Kong. The majority of Chinese people prefer to stay indoors even on holidays. Crowded places (shopping malls, discobars) are not crowded anymore. The tough sanitary control, high fines for spitting in streets, death penalty threats for the deliberate distribution of the epidemic scare people, of course. However, this fear also unites people around the wise government, providing the unity of the party, the army and the people.

On May 5th the official Xinhua news agency reported that China would be able to exceed the goal of the economic growth by not less than seven percent in 2003. Yet, it is not known, if the European Union is capable of achieving at least one percent of this growth. Japan will not be able to do that - no one doubts about it.

Andrey Devyatov

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Author`s name Olga Savka