China’s Crisis Exposes a Badly Flawed Model

Central control and fear of reprisal have made it much more difficult to deal with the outbreak

By Gerard Baker of The WSJ.

"According to reports from Wuhan in this and other news outlets, one of the principal reasons that the virus spread so quickly and infected so many was because officials in Wuhan, bludgeoned by years of subservience to their masters in Beijing, were simply terrified of taking any initiative. Zhou Xianwang, Wuhan’s mayor, told reporters that he didn’t take measures to deal with the epidemic earlier because he needed authorization from his political bosses.

This culture of central control, which has tightened significantly in the six years of Xi Jinping’s presidency, is compounded by the elevation of political ideology and loyalty to the leader over technical or managerial skills as criteria for bureaucratic success. We also know that early warnings about the virulence of the disease were dismissed by public officials for fear that they might make the government look bad. The tragic case of Li Wenliang —the doctor who tried to raise the alarm, was slapped down and later died from the disease—shows how ossified the policy-making process is in a country that places loyalty to the leadership above free speech."

"A large tribe of China admirers in business and predictable parts of the media sees the central role played by the state as a model, a factor critical to the country’s rapid growth. They look at gleaming high-speed rail networks, high levels of digital connectivity, and new airports and roads constructed at a breakneck pace and wish we could have the kind of economy guided by the steady hand of those wise men in Beijing."

"But the primary reason for China’s economic success in the past few decades is the exact opposite. It was the introduction of market reforms under Deng Xiaoping in 1979, extended by his successors in the 1980s and 1990s, that led to the flowering of entrepreneurship, the discipline of the market and the price mechanism.

Indeed, China’s economic performance since the 1980s has been on a roughly similar trajectory to that of Japan in the 1950s and 1960s and South Korea in the 1960s and 1970s—developing economies that benefited from massive inputs of capital and an export-led economic structure. In the past five years, as Mr. Xi has tightened central controls and expanded the role of state-owned enterprises and state-directed lending, growth has slowed, and financial imbalances have grown rapidly."