Monday bees: on China, vaccines and cultural differences

I hope, unlike Bob Geldof, you do like Mondays as I intend each week to share some bees currently buzzing around my bonnet

Sorry about bringing in the Boomtown Rats, but I am writing this from Ireland and and Geldof’s "I don't like Mondays" just seemed irresistibly appropriate when beginning a Monday missive, sharing the bees in my metaphorical bonnet. Even if remembering the song does show my age. And as the song’s topic was about a school shooting in the US — in that case, in San Diego — it could, very sadly, apply to almost any week. One Monday, I’ll reminisce about how I once featured in a US gun magazine accused of being a promoter of genocide, but this week my thoughts are going to focus on the lighter issues of superpower rivalry and ending the pandemic.

The new China myth

I’ve been reading a new book by my old friend and debating partner, Clyde Prestowitz: “The World Turned Upside Down: America, China and the Struggle for Global Leadership”. Clyde was a diplomat and then trade negotiator for successive US governments who came to particular prominence when US-Japan rivalry was the hot-button issue during the 1980s and early 1990s. On Thursday I am delighted that he will be my guest in a Japan Society webinar to discuss the course of US policy towards China and how it might affect Japan and the UK. Clyde and I have debated many things, notably to do with mercantilism and free trade, but one thing I always liked about his writing on Japan and like again in his writing about China is that he rejects the idea that the object of US (or indeed anyone else’s) policy should be somehow to change Japan, and now China. It should be to see China and its strategy with clear eyes, and set your own country’s course accordingly. We will agree again on this on Thursday. So I am going to get one disagreement off my chest now, since as moderator of the discussion it won’t be appropriate to debate it with Clyde at that event.

It is a slightly awkward disagreement, since in making this point he praises my successors at The Economist for the fact that, on March 1st 2018, they wrote "How the West got China Wrong". But it is OK to voice this disagreement with my Economist friends and former colleagues too, since they weren’t the first to make this argument, nor have they been the last. And actually we don’t disagree at all about what the West’s policy towards China should be, now and in the future. Which is one reason why I can happily quibble with their, and Clyde’s, interpretation of the past.

The argument they both make is that since the 1990s, and in particular since China was admitted to the World Trade Organisation in 2001, the western policy of engagement with China has been based on an expectation that the Communist country would steadily become more like the US or Europe, both in economic and, crucially, in political terms. The belief is said to have been that China might even move towards some form of democracy, but would at least provide more political freedom as its middle class grew and prospered and, just as crucially from the alleged point of view of commercial policy, its economy would become more led by the market and less directed by the state. Since 2012 when Xi Jinping became president, it has become especially clear that the political part of this is far from happening. This week’s exchange of sanctions and insults between the US, UK, EU and Canada on one side, and China on the other, over human rights in Xinjiang and Hong Kong is just the latest confirmation. What has become known in Washington as “the China bet” has failed.

Here’s the bee in my bonnet: in my view there was no such bet. Naturally, people can be found, including none other than Bill Clinton and Rupert Murdoch, who expressed the hope that with economic and technological development would come political reform. Others, notably Robert Zoellick as George W. Bush’s Deputy Secretary of State, lectured China in 2005 about the need for it to become a “responsible stakeholder” in the international system. I even myself wrote a chapter in my 2008 book “Rivals” looking at China’s evolution, including the possible relationship between its growing income-per-head and political liberalisation (I concluded, based on the post-1945 record of emerging economies becoming democracies, notably in East Asia and Latin America, that there is no clear relationship between GDP per capita and democracy).

Yet the key question surrounding this issue is not what people may or may not have hoped would happen. It is surely whether any such beliefs in fact shaped policy. Ask yourself whether the West would or should have adopted different policies towards China if its policy makers had had in their minds an accurate picture of what President Xi’s China would look like in 2021. Would they have blocked China from joining the WTO? Would they have been “tougher” on it, whether in trade relations or indeed defence and security, for instance over its claim of sovereignty over the entire South China Sea? Would they have stopped their multinational companies investing in China or taken stricter measures to block Chinese investment in their countries?

In my view, if you look for alternative policies based on a different “bet” you come up empty. Even with 20-20 foresight, policy would not have been greatly different. Quite possibly, some big corporations may have rationalised their investments in China on the basis of some form of liberalisation, marketisation and strengthening of the rule of law, but I doubt really that many took a view one way or the other about whether China would become or even needed to be a democracy. Usually, businesses are deliberately agnostic about the form of government of the countries they invest it, preferring only stability.

Some critics of “the China bet” use the fact that state-owned enterprises still dominate the Chinese economy as evidence that its evolution since joining the WTO has been disappointing. This is true, but western policy has fully recognised this fact: at the WTO, China has never been given “market economy status” and the US, EU and Canada have all consistently opposed granting it. On the South China Sea the US supported the attempt by the Philippines to use international law to pressure China, and has been active in sending warships through the region on “freedom of navigation operations”. Ever since the April 2001 spyplane incident when a Chinese fighter jet collided with a US surveillance aircraft and forced it to land on Hainan Island the US military have been in no illusions about Chinese attitudes or actions.

Why does this matter? My worry is that a false belief that past policy was predicated on mistaken assumptions risks distorting policy in the future, perhaps in damaging ways. It is perhaps an extreme comparison, but in the 1940s and early 1950s the argument in America about “who lost China”, fuelled by McCarthyite anti-communist witch-hunts, contributed to what in hindsight was a two decades long strategic mistake, namely the US refusal to recognise the People’s Republic of China and instead to maintain the fiction that the Republic of China, ie Taiwan, remained the legitimate government. Richard Nixon’s opening to China 50 years ago this year, in 1971, is often portrayed as a brave strategic gambit but was in truth the long-overdue recognition of reality.

I’m not saying that the “got China wrong” myth is likely to lead to as big a strategic mistake as the one made in 1949-50. But there is a danger that it could get in the way of clear-eyed and clear-headed policy. In my view, that policy should show much more continuity than change: “engagement” with China is unavoidable, but it must be pursued with a firm attachment to international rules, whether in trade, investment, intellectual property or defence and security — as before. Enforcing those rules is no easier following the supposed end of “the China bet” than it was in the past. That is what superpowers are like, unfortunately.

The vaccine imperative

If you live in Britain or one of its European neighbours, your media have been filled in recent weeks with talk of “vaccine wars” and “vaccine nationalism”. The rather pointless war of words over whether it is Britain or the EU that has been selfish or incompetent over vaccine production, exports and distribution misses the real issue entirely. This is that there is a global shortage of COVID-19 vaccines. At times of shortage, squabbling over supplies is natural but unproductive. What really needs to be talked about — and happen! — is the issue of what governments of all rich countries can do to ensure that production of safe, approved vaccines can be increased more rapidly than currently is the case.

The cost-benefit analysis of this couldn’t be clearer. Every day during which economies are locked down and travel is restricted costs billions in lost economic output, household incomes and tax receipts. Economies have adapted to the pandemic, making the losses from later lockdowns smaller than for the early ones a year ago. But the losses remain large enough to make this an unusual case for state intervention: public support for faster and more reliable increases in the production of vaccines and their ingredients will always earn a positive return. This is true both of the benefit of faster vaccination of your own population and of other countries, even far away — and that is without counting in moral and diplomatic benefits.

A bit over 500 million vaccine doses worldwide were produced up to March 17th, according to an article we published last week at the Global Commission for Post-Pandemic Policy. Here’s the chart:

The best — OK, I’ll say the only good — thing the Trump administration did last year on the pandemic was the decision to set up Operation Warp Speed, under the auspices of the Biomedical Advanced Research and Development Authority (BARDA), to provide grants and loans worth in the region of $20 billion in the year to March 2021 to support production of vaccines, equipment and supplies. The British government also put up funds to support R&D and manufacturing. This is why these two countries secured supply contracts that benefit their citizens first while countries that treated this solely as a procurement exercise, such as the EU and Canada, have had to wait.

That was then. But this is now, and the world still needs to do everything it can to accelerate vaccine production and distribution. Manufacturers might — might — manage to produce 8 billion-10 billion doses this year, which would be phenomenal. But the mishaps so far suggest they need help. The best study I have seen of what the US has done so far and what could and should be done globally is from Chad Bown and Thomas Bollyky of the Peterson Institute for International Economics in Washington, DC: "Here's how to get billions of COVID-19 vaccine doses to the world". This should be a briefing paper for those preparing the next G7 summit (in Cornwall in June) and the top item on the agenda. Bee duly buzzed. Bonnet emptier.

Cultural, ahem, differences

Finally, this is not so much a bee as an amusement. The world admires Japanese manga comics, and their use for everything from entertainment to education. Any non-Japanese travelling on the Tokyo subway is liable to have their eyes caught as they walk through the endless tunnels and concourses by the many public information posters seeking to direct the already well-behaved crowds about how not to use selfie-sticks on the platforms, not to bash other passengers with bulky back-packs and, for a certain sort of evening traveller, not to throw up. But that didn’t prepare me for the news, shared by a Japanese friend in London, via an article in the FT, that Japan’s Financial Services Agency is now using a cartoon character based on, well, poo to teach children about finance.

This apparently builds on the success over the past three years of a teaching method for Japanese characters, Kanji, also using poo, Unko Doriru. The FT article, by the excellent Leo Lewis, is behind a paywall, but for those who can gain access, here it is. Don’t worry, I won’t dwell on this any further, except to say that wonders never cease in the area of cultural differences. Here’s the cartoon character, which admittedly is not at all gross: