Locking Down the Workshop of the World

Given China’s deep integration into global capitalism, it is astonishing that the country managed to impose what was at the time considered the largest quarantine in history, sheltering some 760 million people in place. Such a shutdown inevitably sacrificed economic growth, which the Chinese state has emphasized as a top priority for decades. China had its massive export industry grind to halt when all other countries could still continue with business as usual. This happened in the context of the trade war, with efforts by large multinational enterprises to relocate their supply chains away from China already ongoing. The COVID-19 shutdown risked accelerating the drive toward relocation.

In China as elsewhere, chaotic market competition dominated in the initial phase of the outbreak — giving way to profiteering and temporary shortages similar to what we could observe on an expanded scale in the United States. Food-price inflation was already high in China in January because of the swine flu. Initially, the lockdown triggered panic buying and price gouging of a type that has also been reported in the United States. The sudden and urgent demand for masks and other personal protective equipment (PPE) resulted in shortages, and some private merchants tried to take advantage. Civil society scrambled to organize donations from across the country and abroad.

Market competition failed in delivering the urgently needed medical supplies and ensuring food distribution in China’s initial stage of the COVID-19 crisis. Again, we have observed the same in the United States. The timeline and the initial handling of the COVID-19 outbreak by Chinese authorities before January 23 are severely contested. But once the central government recognized the severity of the situation, it shifted to an all-out mobilization. China at least temporarily placed people over profits — and switched into disaster relief mode.

Resources from across the country were drawn into Wuhan, the epicenter of the outbreak in China. All COVID-19 treatment was made free. As has been widely reported, emergency hospitals were set up within days. More than forty thousand medical staff, the majority of whom came from public hospitals across the country, arrived to treat COVID-19 patients. People in Wuhan temporarily experienced a glimpse of solidarity that followed a logic fundamentally distinct from individual incentives and private profits.

The total number of hospital beds in China more than doubled during the last decade, and the average number of beds per 1,000 inhabitants in China (4.3) is now close to the OECD’s average level (4.71). Despite the fact that private hospitals have more than tripled in number since 2009 and account now for 26 percent of all hospitals beds, public hospitals in China treated more than 95 percent of the country’s COVID-19 patients during this health crisis.

Health insurance coverage has increased substantially in recent years to around 95 percent of China’s population. But the benefits of the insurance are far from equal in normal times — and co-payments can be high. In the first days of the outbreak, this lack of sufficient coverage for medical costs had the harshest effects on the most vulnerable people who contracted COVID-19. Once the government did decide to act, the expansion of the public health care system of the last decade, combined with temporarily equal access, facilitated the COVID-19 response.

Medical supply shortages of protective clothing, masks, test kits, and infrared body thermostats were eased through a publicly concerted production effort. China’s national medical supply system proved key: state-owned and state-controlled enterprises took the lead in manufacturing and distributing medical supplies, and a platform was established to enhance planning and coordinate buyers and sellers nationwide. Thus, the capacity for producing masks multiplied by 5.5 times, from 20 million a day to 110 million within the month of February. The first test kit was produced on January 24; by March 11, China put out 2.6 million test kits daily. State commercial agencies made sure that private-production capacities were pooled into the mobilization effort. The government pledged to act as the buyer of last resort for these critical medical supplies, to build up China’s national stockpile.

China mobilized its public system of food reserves, production, and distribution to be able to enforce the national quarantine. Online retailers were in many places the interface with consumers. But their supplies were backed up by a state program that mandates cities with the provisioning, affordability, and safety of non-grain foods, particularly fresh produce and meat. China’s large-scale public reserve system procures grain and other staple foods when supply is high and prices low, then releases stocks when scarcities occur, such as during the COVID-19 crisis. A network of neighborhood committees that spans all cities organized the delivery of food, trying to make sure that all residents were covered during the lockdown.

These public provision programs were coordinated with big data of a kind that makes most of us feel deeply uncomfortable and raises serious concerns around privacy and political freedoms. The attempt to use apps to trace contacts and COVID-19 exposure is not unique to China, but China’s approach stands out for being particularly “pervasive and invasive”.

In China, as elsewhere, a lack of effective measures to contain the spread of the virus would probably have left the most vulnerable groups in society to suffer most from the disease. It was reported that an infected pregnant rural migrant who ran out of money to pay for treatment died in the initial weeks of the crisis. Without the all-out mobilization and health care coverage for COVID-19 treatments, there could have been hundreds of thousands of such cases. Some estimates suggest that China might have avoided 1.4 million infections and 56,000 deaths. Others go so far as to claim that China’s strict lockdown saved 10 million lives.

China’s Integration Into Global Value Chains

However, the all-out mobilization for dealing with COVID-19 certainly doesn’t mean China has transcended its integration into global neoliberalism. Indeed, in the context of heightened international tensions, China’s subordinate position in global value chains — implying a heavy dependence on foreign technology — brutally showed the limits of such a national effort. The US-China division of labor remains largely what you can read on the back of an iPhone: designed in California, assembled in China. This caused technical bottlenecks when China tried to mobilize production of medical equipment on a mass scale. Lacking imported core components, the production of ventilators fell short of demand. Even for surgical masks, China relies on German and Japanese imports of key machinery parts to produce meltblown cloth, a crucial material for filters. Ramping up this life-saving production to full capacity would have required international coordination.

The brunt of the front work in China’s total mobilization was undertaken by low-paid migrant workers. This included the celebrated construction of new hospitals undertaken by underpaid rural migrants trapped in the city of Wuhan over the Lunar New Year holiday. At the height of the COVID-19 mobilization, sanitation and delivery workers were working long hours under extreme pressures. Women constituted the majority of nurses and doctors at the forefront of China’s battle against COVID-19.

The sharing of the economic burden resulting from the novel coronavirus is likely to also reflect existing inequalities, in China as elsewhere. Although China is somewhat less unequal than the United States, inequality is a major problem. A recent report from the People’s Bank of China shows that the top 10 percent of urban households hold half of all urban household wealth. No doubt, China’s more than 200 million migrant workers are the ones suffering most as the country enters its own employment crisis of uncertain dimensions. Many migrant workers used to work in the export sector before the pandemic. With the global economy shattered, China is challenged to fast-track the reorientation of its economic model.

The COVID-19 crisis also hit millions of workers with jobs in the domestic gig economy, such as online ride-hailing and restaurant delivery. Uberizing the labor market was an easy way to create jobs, but the precariousness of this gig employment deteriorated even further in the pandemic and now poses a severe challenge.

The deep shock of the pandemic and the experience of mass mobilization, not individual incentives, has revived the question of the future of China’s reform. Some prominent voices of China’s New Left have gone so far as to argue that the people’s war on COVID-19 has provided a model for a different future. This seems premature. Rather, the need for wide-ranging economic adjustments that this global economic crisis is necessitating is opening up a vast contested terrain. Reformers have already organized to call for further and deeper marketization to protect China’s integration into global neoliberalism.

In China, as around the world, the pandemic is calling for far-reaching social and economic change. The direction this will take is subject to fierce struggles; and the outcome will also depend on our reading of how societies have dealt with the COVID-19 outbreak and the lessons we draw from it. Instead of exceptionalizing and othering China, progressives around the world have to see beyond the logic of nationalism and recognize the interconnectedness of our fights. The enemy in this pandemic is not China but inequality and the logic of profit over people.