SARS, Politics, and the Economy

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Chapter 4
SARS, Politics, and the Economy

While people around the world were trying to deal with the treatment and containment of the disease, civic and national leaders were dealing with other aspects of SARS. Of particular concern was the way a new contagious disease affected the economy and politics of places that had suffered large outbreaks of SARS.

Nothing New

China was not honest about the SARS outbreak in providing information about the mysterious disease to the international medical community. In addition, the government was equally dishonest to its own citizens about SARS. China's history contains stories of several empires that were toppled because of uprisings by the masses. Lest they suffer the same fate, modern Chinese leaders have tried to keep frightening events such as the SARS epidemic a secret. By the government's decision not to be truthful, say experts, Chinese leaders were continuing a troubling tradition of covering up the nation's medical problems.

For example, in the late 1990s there was a large outbreak of HIV, the virus that causes AIDS, in the rural areas of central China. The disease spread among people who had sold their blood to traffickers, using needles and other equipment tainted with the virus. As a result, tens of thousands of people became infected with HIV, though the government insisted that only a handful of people in a remote village were affected by the traffickers' carelessness.

Another example of governmental secrecy occurred in early 2003, when more than three thousand schoolchildren in a northeastern province became ill—and three died—after drinking spoiled soy milk. Again, though thousands of parents were seeking medical help for their children, the government denied that any such thing had happened. As a result of instances such as these, the government suffered a lack of credibility when people eventually learned that their leaders had not been honest with them.

Angry Doctors

Similarly, many people feel that China's government may suffer because of its lack of openness with its citizens about the SARS virus. Once word of the disease began to leak out, many Chinese citizens felt that they had been duped. Many of the angriest people were health care workers.

To make the numbers of infected people seem low, government health officials decreed in March 2003 that doctors could no longer diagnose SARS; instead, for a diagnosis to be official, it must be made by a medical researcher. But because researchers were unable to see even one-fourth of the patients suspected of having the disease, many patients whom doctors suspected of having SARS went undiagnosed.

One doctor in Shanghai recalls a patient he saw whose symptoms almost certainly indicated SARS. He says that he wanted to isolate the patient and begin treating his fever and cough, but before he could begin, he was stunned to find that his patient had been transferred without his knowledge. "I never found out whether he had the disease or not," says the doctor. "We doctors are all left with a lot of questions. I think it's shameful to not let us know what's going on."58


But it is not just medical workers who are angry at the government's secrecy. It is almost certain that thousands of Chinese people became ill, some fatally, because they were not told about the seriousness of the disease. One man says that the government had assured everyone that the risk of SARS was long over, even when health officials knew that the disease was spreading out of control. As a result of the misinformation, the man says, his wife was ill and highly contagious for days with SARS—and the family was certain it must be something else.

Chinese journalists, who are largely under the control of the Communist Party, admit that they were used by the government to convince the public that SARS was not a problem. In Shanghai, for example, journalists were told that the number of people in the city with SARS was highly classified and were warned that they would be fired or jailed if they attempted to interview SARS patients or their families.

At the same time, however, health officials were worried that unless they educated the public about the symptoms of SARS, they would be unable to contain the outbreak in Shanghai, whose population is 16 million. One journalist recalls that his orders from government officials were highly contradictory. "Readers are going to be very confused," he tried to explain to the province's health minister. "On the one hand, we tell them there are almost no cases in Shanghai. On the other, we tell them that they must be very vigilant in avoiding the disease. But if Shanghai has barely any cases, why does the public have to be worried about SARS?"59

"The Government Doesn't Care"

Of course, in busy cities like Shanghai and Beijing the ballooning rate of infection from SARS was hard to keep secret. As more and more people learned of friends and coworkers who had become infected, it became clear to the public that they had been lied to. Many were furious with their government. "It's really bad," says a relative of a SARS victim, "that the government doesn't care about ordinary people's lives."60

As the disease moved into the more remote parts of China, the response was no less angry. The tiny remote villages have limited hospital facilities—a shortage which is troublesome under normal circumstances. They lack around-the-clock staff, X-ray machines, and even bed space for more than two or three patients at a time. When people infected with SARS began appearing at these rural hospitals, health workers were forced to turn many patients away. This experience showed residents the inadequacies of their health care system.

In one village, five or more SARS patients were crammed into a single ward room which had no door or even a curtain to stop the spread of germs. Since the hospital staff is minimal, family members were encouraged to stay with the patients. Because SARS was not supposed to be a problem, however, there was a shortage of face masks, and the families were constantly at risk of catching the disease. "We relatives have to stay in that room without any protective measures, all day and all night," complained one young man. "It's very dangerous, but we have no choice, if we want to take care of our family."61

"Why Didn't the Government Say Anything?"

If this situation had occurred in the United States or any other democracy, it would hardly be surprising for people's anger to be directed at the government. However, China is a nation where power is monopolized by the Communist Party. Though it is very modern in its economic policies, China's political system has a long history of being resistant to change. The system is closed and secretive, and has a dismal record regarding human rights. Protesters have been shot for criticizing the government or its actions, and as a result, people tend to keep their anger or frustration to themselves.

But people have been outspoken—many for the first time—about their government's mishandling of the SARS epidemic. One young woman who became infected after tending to her mother and father in the hospital when they had the disease was angry. "If we had known about this disease, we would have stayed away from the hospital," she says. "Why didn't the government say anything? I blame them for my parents' death."62

Many Chinese, fearing for the health of their families, felt that the government was less interested in preventing SARS than in keeping up the pretense that all was well in China's cities. In Beijing, for example, people were frantically trying to find transportation out of the city as shops and restaurants were closing because of the SARS threat. When officials urged people to stay home, they were ignored. "I'm very worried about getting on a train with so many people," said one young man in April 2003. "But I'll do anything to get out of Beijing. It's simply become too dangerous."63

At Beijing University, students openly rebelled against governmental orders to stay on campus during the height of the epidemic. University officials warned students that they would suffer consequences—including expulsion—if they left. Even so, many students packed their backpacks and left, hoping to avoid catching SARS. One student said that his classmates did not want to have their fate controlled by the government, explaining: "They said they'd have the control over their own legs."64

"For the Sake of the People"

Much of the anger has been directed at China's new president, Hu Jintao. Hu, whose ideas are more liberal than his predecessors, had impressed many people in his first presidential speech, for he seemed more committed to honesty and openness than other leaders had been. He vowed to remember that the well-being of China's people was his most important responsibility: "Power must be used for the sake of the people," he urged. "Material benefits must be sought in the interests of the people."65

However, in the early days of the epidemic Hu allowed government health officials free rein in handling the crisis. They chose to deal with the disease in more traditional ways—in this case, being secretive about the severity of SARS. It was only when WHO and the international media became involved that Hu realized that he and his government were rapidly losing the trust of the people—in addition to that of the international community.

On April 20, 2003, Hu abruptly fired his health minister, replacing him with a no-nonsense former trade minister, Wu Yi. Wu's job was one-dimensional—to head the anti-SARS fight in China. It seemed clear that for the first time in memory, China's government was serious about openly confronting a crisis.

The Black Box or the Sunshine

Hu's supporters were very pleased by his actions. They believed that his decision to be more open about SARS would benefit the nation. Perhaps, they said, this episode forced China to turn a corner, allowing much-needed reforms. "This is [Hu's] chance to grab the support of the people and stand up on his own," said one former party official. "China can keep living in a black box, or it can live in the sunshine. If he can't take advantage of the situation and move into the sun now, then when?"66

There is strong opposition to Hu's openness, however. Some Communist Party officials are critical of Hu's more liberal views. They predicted that his more open dealing with SARS would backfire, causing panic among the Chinese people. The former president of China, a conservative named Jiang Zemin, is one of the most adamant critics of Hu, and experts in Chinese politics predicted that if the SARS epidemic had not been controlled, Jiang might have regained power. If that had happened, say experts, it would have signaled a return to the more repressive regimes of past years.

No one doubts that the SARS issue was a political challenge for the Hu presidency. "For the Chinese government," noted one observer, "the SARS crisis presents the gravest threat since the student protests at Tiananmen Square [that resulted in more than 165 deaths of Chinese demanding democracy] fourteen years ago."67

Economic Disaster

Politics is not the only thing that has been affected by SARS. In SARS-stricken countries, the epidemic has had a great economic impact—especially in China. Having recently won the rights to host the 2008 Olympics in Beijing, as well as the World Expo 2010 in Shanghai, Chinese economists were very pleased with the prospects for higher employment rates and rising stock prices. However, on April 2, 2003, when WHO declared Guangdong Province and Hong Kong danger zones, that optimism evaporated almost overnight.

The first setback was the sharp drop in the number of tourists. China depends on tourism, for it accounts for 9 percent of the economy. In both 2000 and 2001 the tourist industry accounted for $67 billion. After word of the SARS outbreak spread, however, tourists looked elsewhere for places to visit. In April 2003, alone, there were ten thousand cancellations for flights and hotel bookings because of people's fear of becoming infected with SARS. By July 2003 it was estimated that tourism would bring in 40 percent less money for the year.

There were cancellations of business-related events, too. Many foreign business representatives canceled meetings that had been scheduled to take place in China. A survey of business travel groups found that many of the airlines that have regular business flights to China had reported drops in sales. Explained one American financial representative in Shanghai, "Anything that requires face-to-face meetings is on hold."68

Trade shows, at which various companies show off new products for foreign buyers, were canceled. The few shows that went on as planned were poorly attended. The sales manager for one communications equipment company says that he always works long hours at the Taipei International Spring Show, at which he normally gets many orders. However, in the spring 2003 show he made so few sales he expects that his business will drop by at least 20 percent. "Most of my buyers didn't come this year,"69 he says.

Trickling Down

The loss of orders for factories, as well as the loss of revenue from tourism, had what economists call a "trickle-down effect" to other areas of the Chinese economy. In other words, it was not simply the factory owners or the hotel and restaurant owners who made less money. In fact, the brunt of the hardship fell not on the owners, but on the millions of people who work in those businesses.

In China and other Asian countries affected by SARS, the huge decrease in factory orders resulted in layoffs of millions of workers. Many of the factories affected were foreign-owned assembly plants that had moved their operations to Asia to save money, for factory workers in Asia are paid only a small fraction of what such workers would earn in the United States or other nations. And several businesses that had been considering relocating to Asia were rethinking their plans, as owners wondered about the safety of a region suffering such a dangerous epidemic.

As restaurants and hotels stood empty, they, too, laid off large numbers of waiters, housekeepers, cooks, and cleaners. And without markets for their products, farmers and ranchers were affected, as the prices for produce and beef continued to drop. Experts say that the millions of new unemployed workers added a heavy strain to the already high jobless rate.

Trouble for Hong Kong

Mainland China has been hard hit by the economic effects of the SARS epidemic, but Hong Kong has had even worse trouble. Hong Kong, far and away the most modern part of China, had been experiencing economic difficulties even before the SARS crisis. It is a very expensive city; foreign firms with branches in Asia had found it so expensive for its employees to live there that many of the firms had relocated to the mainland. WHO's warning about visiting Hong Kong was even more damaging.

Within three weeks of the April 2 warning by WHO, Hong Kong's economic experts were fearing the worst. In 2002 more than a million Americans had visited the city, but it was clear that 2003 would be far different. Airlines that normally have several international flights each day to Hong Kong cut service drastically. The largest carrier to Hong Kong, Cathay Pacific, reduced its weekly flights by 45 percent almost immediately after news of the SARS outbreak became known. Hong Kong's airport, normally the fifth busiest in the world, was a virtual ghost town, writes one observer, "a series of vast, sparsely occupied and nearly silent halls, where travelers in surgical masks move quickly to and from gates."70

Business diminished in Hong Kong to a greater extent than on China's mainland. One local textile and furniture manufacturer says that 80 percent of foreign investors and buyers canceled buying trips—and that means a sharp loss of revenue for him, as well as a drastic loss of jobs for his workers. As with Mainland China, unemployed workers meant fewer dollars being spent by the citizens of Hong Kong. By May 2003 retail sales in Hong Kong had fallen 50 percent from the May 2002 totals.

The Whole Region Contracts

The SARS epidemic has not only affected Chinese workers but also many foreigners who live and work in China. For example, more than 25 percent of American employees in Beijing sent their families out of the country because of the disease. One Australian bank with branch offices in Asia gave its employees in Hong Kong the option of returning to Australia—and were surprised when the majority said yes. A bank officer predicted that even when SARS is no longer a threat, many of those employees may decide to stay in Australia rather than risk working in Asia again. "You've got most of the [foreign] population [away from Asia] already, the families at least," he said, "and if this goes on, people will start to say, 'Why don't you relocate me [out of Asia where their families are]?'"71

More than thirty-four hundred miles away, Australian fishermen have been affected by the economic calamity in China, too. Those who fish along the Great Barrier Reef are feeling the loss of a great deal of their business due to the SARS outbreak. Their biggest customers are the restaurants in Hong Kong, and with the city's best restaurants closed because of SARS, there are no orders for their fish. As a result, many of Australia's fishing boats are idle, and their owners without jobs.

And though there have been relatively few SARS cases in the United States, Americans have been affected by the disease, too. By May 2003 the Federal Reserve announced that the economic problems throughout Asia were having effects in the United States. The stock market, which was already weakened by the uncertainty of the war effort in Iraq, showed that stock prices fell even further as banks and insurance companies that dealt with Asia lost business. One business owner notes that the decline in airline travel alone made the business world skittish. "Just as business got used to the idea of the globe being a village," he says, "along comes a virus that affects something as fundamental to business as travel itself."72

Canada Disagrees with WHO

While Asia was hit hardest by the political and economic fallout from SARS, Canada suffered, too. Because of the outbreak in Toronto, which had infected more than 240 people, WHO added Canada to its list of global danger spots on April 23, 2003. That prompted a storm of outrage—not toward Canada's leaders but the World Health Organization itself.

The morning after the warning was issued, the United Nations received protests from Canada's prime minister as well as its health minister, saying that they did not agree with WHO labeling Toronto unsafe, nor did they accept the process that the organization followed. Toronto's mayor, Mel Lastman, appeared on television, both praising the health workers of the city and criticizing WHO for what he considered a lapse of judgment. "Let me be clear," he said in late April 2003. "It's safe to come to Toronto."73

Although the travel alert was lifted after one week, Canadian officials felt that the damage had already been done. Like China, Canada's economy depends on tourism, and economic analysts estimated that the SARS threat cost Canada a minimum of $30 million per day of the alert. A milder caution by WHO, listing Toronto as a SARS-impacted area, remained until July 2, 2003, and that definitely hurt not only Toronto's economy, but that of the entire nation.

Even in places such as Montreal and western Canada's Lake Louise and Banff National Park, where there were no cases of SARS, there were sharp declines in the number of visitors. One hotel official says that it is unfortunate that the public had the impression that Canada was dangerous because of SARS, when in reality, Toronto's health officials did a good job of containing the threat. "Perception versus reality was just so skewed," he says. "In terms of having a regular summer [of tourism], we're past that point."74

An Impact on Baseball

Major league baseball in Toronto suffered, too. WHO's warning came just as the Toronto Blue Jays' season was getting underway, and league officials were hesitant to allow the season to go on as scheduled. Many teams who were supposed to travel to Toronto to play baseball were nervous when baseball league officials warned visiting players not to mingle with fans or sign autographs.

Although baseball officials agreed that most likely the chance of a player catching SARS in Toronto was small, they maintained it was important for players to be careful. One player agreed, saying that as long as people were still contracting SARS, it made sense for players to be cautious. "I think right now we have to back off a little bit," he said, "and make sure everybody stays safe until they find out what's going on. I think [fans] should understand what's going on, because people are dying from this thing. It's not like people are just sick. People have died."75