Coronavirus puts Beijing model to the test

It is still early to assess the short- and medium-term economic impact of the coronavirus crisis. But beyond the day-to-day monitoring of the victims of the epidemic, we can already question its causes and consequences for the global economy. The global financial crisis of 2008 had sounded the death knell of the liberal globalisation model. The Chinese crisis of 2020 could be the death knell for its great competitor: The authoritarian developmental state model. Orphaned by the two great paradigms, the Washington consensus versus the Beijing consensus, the world is now condemned to find a third, more sustainable paradigm between the all-market and all-state, the core of Raghuram Rajan’s last book, The Third Pillar.

 The crisis of the Beijing model, first of all, is reflected in the very causes of the epidemic and its management. While the viral video of the construction of a 1,000-bed hospital may have reinforced the fascination of some for the state model, the precise information on the outbreak of the epidemic since the first case in Wuhan on December 8 confirms the thesis of the great economist Amartya Sen on the link between democracy and famine. The latter are never due to food shortages as such but the control of information by an authoritarian central power. Minxin Pei's analysis of Wechat feeds in an op-ed piece in the Japan Times on January 29 shows it has been a case of strict censorship delaying the rational adaptation of behaviour and provoking a self-perpetuating feeling of panic among the population.

 The second structural cause is clearly linked to the “Beijing model”, a veritable hymn to progress of the type depicted in Aldous Huxley’s Brave New World: Urbanisation, food, industrialisation, communication, planning, all in excess, with this paradox where efficiency gains linked to economies of scale and a scientific vision of the future boomerang in exponential damages. So TGVs are becoming high-speed propagation trains, and the new silk routes are regaining their status as the royal road for infectious and parasitic diseases, as shown by a team from the University of Cambridge published in 2016 in the Journal of Archaeological Science.

 What are now the possible consequences of the epidemic? Clearly, we have not yet emerged from the crisis of liberal globalisation, judging by the multiplication of social crises that the International Monetary Fund itself has just acknowledged in its latest World Economic Outlook. How will we get out of the crisis of the authoritarian developmental state model? Beyond a short-term economic impact that should bring the Chinese growth trend below 4 per cent in the coming years, the medium-term consequences could be a good illustration of the ideogram of the word “crisis” in Chinese: Both danger and opportunity.

 On the Chinese side, what better symbol than the 200 million surveillance cameras condemned to scrutinise the irises behind the masks of a billion people. All the information from the ground points to a strengthening of censorship and authoritarianism, the expression of a crisis of legitimacy of a regime that has played the prosperity card against freedoms, but also the expression of a deaf protest, of which the crises in Hong Kong and Taiwan are only the visible face on the margins of the empire, like the viral silence on Tibet and Xinjiang.

For a year now, moreover, the Chinese population has been experiencing the crisis of the so-called “African” swine fever, which has led to the slaughter of at least 300 million heads and an explosion in the prices of its basic meat. To this crisis, the authorities responded as usual with more “scientific and technical progress”, with huge factory farms of about 10 floors, while family farmers were chased by the police. This type of response, however, only served to increase the mistrust of a population that aspires more and more to a healthy life as it ages and to a return to nature, as evidenced by the very visible revival of Taoism or Buddhism. These have inspired the great popular revolts in Chinese history, such as the Yellow Turban revolt around 180 AD, which contributed to the fall of the Tang Dynasty.

There is another dimension to this crisis on a global level: Deglobalisation and economic relocation, that is to say, the re-embedding of the economic into the social and territorial fabric. This should indeed experience a new impetus with a likely halt to the “Go Global” strategy declared by Xi Jinping when he came to power in 2013. Mistrust of its new Silk Roads represents the possibility for India and Africa to reemerge from the neo-colonial “made in China”, which was nipping in the bud any prospect of local industrialisation. For the developed countries, this represents a possible acceleration of relocation and the end of a destructive consumerism based on dumping prices far below the real social and environmental cost. 

The writer is an economist at the  French Institute of International Relations