FREEMAN REPORT

Freeman Chair in Studies

Volume 1, Issue 2 QUOTES OF THE MONTH “There is a need for us to recognize the fact that the SARS epidemic is going to be a long-term, a complex, and relapsing epidemic.” - Premier Wen Jiabao of China at the special ASEAN meeting to discuss SARS in Bangkok.

“SARS has done what HIV/AIDS, tuberculosis, and hepatitis have failed to do in the past 30 years: galvanize the top leadership of the country and mobilize not only the public healthcare sector, but the entire government, making infectious disease prevention a top priority.” Andrew Thompson in “The health of China matters to Taiwan and the world,” featured below as this month’s special essay.

TRIVIA QUESTION Not Healthier” published in the May 1 Owing to the rise of Yao Ming, on edition of the Far Eastern Economic average how many viewers in China Review, Bates Gill recommends steps now tune in to watch NBA basketball, for China and the international both live and taped for later broadcast? community to contain the spread of (answer at the end of the newsletter) infectious diseases in China.

RECENT PUBLICATIONS For a list of all past publications, Over the past month, the Freeman please click here. Chair has published a number of articles about the outbreak of SARS. FREEMAN CHAIR IN THE NEWS In “Why China's Health Matters to the On April 22, Bates Gill appeared on the World” published in the South China Diane Rehm show to discuss the Morning Post on April 16, Bates Gill political and economic implications of and Andrew Thompson discuss the the SARS threat. He was joined by impact of SARS on the world. In Bob Kapp, president of the U.S. – “China Will Pay Dearly for the SARS China Business Council, and Cheng Li Debacle” published in the International of Hamilton College. To listen to the Herald Tribune on April 22, Bates Gill broadcast, please click here. explains how Beijing’s reaction to SARS reflects poorly on the Chinese On May 12, Bates Gill testified before government, hurts its economic the Congressional-Executive prospects, and bodes poorly for Commission on China with remarks on China’s reaction to other infectious “China And Sars: Lessons, diseases. And, in “China: Richer, But Implications, And Future Steps.” To

read the testimony, please click here. Foundation on International and Cross-Strait Studies (formerly the CONFERENCES AND EVENTS Chinese Eurasian Foundation) and CNA On April 22, the Freeman Chair held its Project Asia, the Freeman Chair will third roundtable on “China’s hold a conference on China's Strategic Emergence in Central Asia: Security, Future Under New Leadership: Political Diplomatic, and Economic Interests” Transition, Socioeconomic Challenges, with a forum entitled Energy and Regional Stability, and U.S.-China Trade in China-Central Asia Relations. Relations. This full-day conference will The forum featured presentations by detail and analyze Chinese party, Charles Maynes, president of the state, and military leadership/portfolio Eurasia Foundation; Ambassador turnover and its impact on the Steve Mann; Robert Ebel of CSIS; Dr. strategic choices and directions of Kang Wu of the East-West Center; and China's economic, political, and Martha Blaxall of SAIS. The event security related developments, at both summary will be available shortly on the domestic and regional levels. the Freeman Chair website. On June 5, the Freeman Chair will hold On April 29, The Freeman Chair held a its fourth and concluding roundtable seminar featuring Dr. Alexander Lukin on “China’s Emergence in Central Asia: of the Moscow State Institute of Security, Diplomatic, and Economic International Relations. Dr. Lukin Interests” with a forum entitled The offered remarks on "Russian Role of Xinjiang in China-Central Asia Perceptions of China" based on his Relations. The forum will feature new book entitled, The Bear Watches presentations by Dru Gladney of the the Dragon: Russia’s Perceptions of University of Hawaii; Justin Rudelson, China and the Evolution of Russian- author of Oasis Identity: Uyghur Chinese Relations since the Eighteenth Nationalism Along China’s Silk Road; Century. and Paul Fujimura from the Office of the Coordinator for Counterterrorism COMING ATTRACTIONS at the State Department. On May 21, in cooperation with the

FREEMAN FACTSHEET NEW ECONOMIC DATA FOR CHINA:

2002 rate of economic growth 8% Projected 2003 rate of economic growth (as a result of SARS) 7%

Increase in real urban disposable income in 2002 13.4% Increase in real rural net income in 2002 4.8%

Official unemployment rate in 2002 (the highest in 3 years) 4.5% Unemployment in 2002 predicted by outside experts 10% in urban areas Over 20% in rural areas

Cost of a Big Mac in China $1.27 Cost of a Big Mac in the United States $2.49

Increase in automobile production for 2002 55%

Drawn from the World Bank, IMF, National Bureau of Statistics, and The Economist

Jintao, Premier Wen Jiabao and Vice SPECIAL THIS MONTH Premier were forced to take notice The health of China matters to and mobilize the entire country to Taiwan and the world prevent the spread of SARS. By Andrew Thompson Firing Minister of Health Wenkang Neither China nor the rest of the world and Beijing Mayor is a can maintain the pretense that the case of “beating the chickens to scare country is a closed society, or that its the monkeys,” and it has had the farmers, workers and soldiers are tied to intended effect. The Friday before the their production brigades or work units. sackings, only 29 provinces had China has globalized, its citizens enjoy reported back to Beijing whether or not unprecedented freedom of movement they had SARS cases; the Ministry of throughout their country, and their Health was unable to provide daily growing economy is increasingly updates to the WHO or even the State dependent upon foreign capital Council because provincial authorities investment and export markets around were not cooperating fully. The day the world. The state of China’s public after the sackings, all 31 provinces health system has been in decline since reported in, and starting in late April, 1979, with emerging infectious diseases the Ministry of Health and Xinhua, the already having major social and state news agency, have been reporting economic impacts in China with daily statistics from every province. repercussions felt far beyond China’s Minister Zhang Wenkang cannot be borders. Severe Acute Respiratory blamed for all the challenges facing Syndrome (SARS) is only the most China’s under funded healthcare sector. recent and dramatic epidemic to Minister Zhang worked hard to establish itself in China and spread to encourage international donors to other countries. contribute funds to China to help build medical capacity. Unfortunately, he had SARS has done what HIV/AIDS, trouble convincing the top leaders that tuberculosis, and hepatitis have failed to infectious diseases like HIV/AIDS were do in the past 30 years: galvanize the spreading rapidly and would cause top leadership of the country and significant economic damage to the mobilize not only the public healthcare country. The outbreak of SARS sector, but the entire government, established that China is indeed at risk making infectious disease prevention a from emerging diseases and top priority. Over one million Chinese demonstrates that the country’s public are estimated to have HIV/AIDS. Over health system lacks the capacity to 200 million have hepatitis B or C, adequately combat them. making liver cancer a leading cause of death. Four hundred million carry the SARS has spread to all corners of China, tuberculosis bacteria, from which 5 and will have a major impact in rural million fall ill and 250,000 die each year. areas where medical facilities lack Nevertheless, the World Health resources and well-trained doctors. In Organization says that China still lacks rural hospitals, doctors do not have “political commitment” to eradicate enough of the basics – such as gloves, infectious diseases. Senior officials have masks, and gowns – to prevent infection ignored and even denied the extent of from spreading from one patient to these diseases. It was not until the another in a clinical setting. We already outbreak of SARS that President Hu know that many hospitals and clinics in

rural areas improperly reuse syringes, then infect other dogs that come in catheters, and other equipment that contact with the feces. As long as the already contributes to the spread of HIV trains continue to run, SARS will have a and hepatitis, and will possibly spread vehicle that spreads it. SARS as well. SARS has reached parts of China that already have a high As the SARS spreads in China and the prevalence of other diseases, such as government managed healthcare system Henan, where many rural counties have is unable to stem the epidemic, the large numbers of HIV-infected farmers. impact will be felt both socially and When people who already are infected economically in Taiwan. With more than with HIV, tuberculosis and hepatitis are three million Taiwanese visiting China co-infected with SARS, the death rate last year, and an estimated one million will exceed the current estimate of 6%. Taiwanese living in China, the “human” impact of the SARS epidemic on Taiwan Canceling the May Day week-long is already large. The four percent of holiday was a good idea in principle, but Taiwan’s total population living in China unfortunately, it seems that it will have are mostly white-collar managers, little impact on preventing the spread of entrepreneurs and their families. This SARS within China. The reaction in segment of Taiwan’s population is young Beijing to the government’s decision to and productive, so the impact of any close schools and quarantine hospitals epidemic in China will have a and the increase in reported cases since disproportionately large social and the firing of Minister Zhang and Mayor economic effect on Taiwan. Meng has caused many people to decide to leave Beijing. The result is that tens The SARS outbreak is already having an of thousands of people in Beijing will immediate adverse effect on the take trains to all parts of China in an economies of the entire region. While attempt to escape the growing epidemic the service and tourism sectors have in the capital. However, this will spread taken the first hit, electronic and textile the disease not only from Beijing to the manufacturing face an increasing impact provinces, but along major as well. Since many of the electronic transportation routes as well. Chinese components manufactured in China and trains do not have holding tanks for Taiwan are shipped by air freight from waste, so the bathrooms are little more OEM suppliers to assemblers, the than holes in the floor where feces falls reduction in regional air traffic will result to the tracks. Since a great deal of in reduced cargo space and a garbage is discarded out the windows of corresponding increase in shipping trains as they pass through the costs. As airlines flying to and from Asia countryside, local residents frequently will have fewer passengers, the airlines visit the tracks to collect garbage to sell will seek to cover more of their for scrap. While they scour the tracks, operating expenses from the cargo on they will come into contact with the each flight. Textile and other light- feces, which is believed to transmit the industrial manufacturers will likely be corona virus causing SARS. Raw impacted because quality engineers sewage is suspected as the vector that from the U.S. and Europe will not visit spread the disease to residents of Amoy production sites, possibly causing delays Gardens in Hong Kong. It is further in shipping or rejection at the known that when a corona virus infects destination. dogs, the dogs develop diarrhea, and the virus is shed in the feces, which will Taiwan has already taken many of the

necessary precautions that China and illustrates the importance of China’s Hong Kong have not taken, and for this health to the world. China’s health reason, Taiwan will be able to minimize system lacks the capacity to effectively the impact of SARS as much as possible. prevent the spread of emergent Taiwan’s efforts to screen passengers infectious diseases in the country. The as they arrive at the airport and ferry impact of HIV/AIDS, tuberculosis, and terminals, quarantine those with high hepatitis will be felt well beyond China, fevers coming from infected areas, or affecting particularly those neighbors those who have had contact with with close economic and social ties, just infected persons, will minimize the as SARS has done. As China becomes spread within Taiwan. Effective more and more integrated with the rest monitoring of suspected and probable of the world, its economic and medical cases, strong surveillance including health is becoming a central concern actively tracing all contacts that an across the globe. infected person has had will hopefully prevent SARS from becoming a major Andrew Thompson is a Research Associate problem in Taiwan. with the Freeman Chair in China Studies. This article originally appeared in Chinese in The SARS outbreak in China and the Taiwan Business Next. subsequent spread to Hong Kong, Taiwan, Singapore, Canada, and beyond

TRIVIA ANSWER: 21 million Chinese viewers with roughly 7 million watching live and 14 million watching the taped rebroadcast the next day, a 300% increase over last year. (From washingtonpost.com, “Yao Holding Court in China,” by Philip P. Pan, December 13, 2002; updated with the help of the NBA)

Established at CSIS in 1994 through the generous endowment of Houghton Freeman, the Freeman Chair in China Studies aims to advance the study of China, promote understanding between the United States, China, and the Asia-Pacific region, and provide informed public policy debate, expert briefings, and strategic policy recommendations on Greater China and East Asia to the diplomatic, policy analysis, business, academic, and government communities. The Freeman Chair is currently held by Dr. Bates Gill.

Freeman Chair in China Studies Telephone: (202) 457-8719 Fax: (202) 775-3199 Email: [email protected] http://www.csis.org/china/index.htm

 Copyright 2003