A Tale of Two Countries: How the U.S. Government is falling behind China’s response to deal with COVID-19

March 27, 2020

About the author: Mr. Marco Carrasco-Villanueva is an economist specialized in Asia-Pacific Economies (mainly in China) and Behavioral Economics. He graduated from the National University of San Marcos (Peru), and holds a Master’s Degree in Economics & Psychology from the University of Paris 1 - Sorbonne (France). He was an active member of the Grupo ASIA organization in Peru and took courses as a Young Sinologist at the Academy of Social Sciences in Shanghai (China). He has given several lectures on his research topics both in Asia and Latin America. He currently resides in Cambridge, Massachusetts, following postgraduate studies in International Development at Harvard University (the United States).

The following is the original article written by Mr. Marco Carrasco-Villanueva.

January: Denial

On January 21, the United States had its first report of a national infected with COVID-19. It was a man from Washington State who had just returned from Wuhan, China. After two weeks of medical attention, he was discharged.¹ While cases in the West were still sporadic, U.S. news reported the development of the epidemic in China. The perspectives of the population at that time were that the virus was something very distant, if not even something totally alien or unaffecting the reality of the United States. In this context, various media and politicians expressed concern about China while lamenting the ineffectiveness of the Chinese government to face the problem. Internet videos that were said to be “leaked” from China were common, rather crude videos of a peak of the epidemic, which highlighted the large number of deaths, a lack of hospital care, high mortality rates, and even a critical view of mobility restrictions faced by people in Wuhan and other Hubei cities.² China was the first country to directly fight against the epidemic, and as such, any public health action taken was observed by the West, probably even then with more criticism than certainty.

Much of Hubei province remained sealed off since January.

(Source: Reuters)

It was not until January 30, when the World Health Organization declared the epidemic as a public health emergency with an international reach, that the Trump administration began to significantly consider the issue on the agenda. One day after the WHO statement, the U.S. Department of Health and Human Services declared the case a public health emergency. Given this, as a measure more inclined to prevent the arrival of the COVID-19 than to get prepared for its arrival, the government took its most unprecedented measure in more than 50 years, with a mandatory quarantine for all Americans returning from the province of Hubei and entry restrictions for any foreigner who has been in China in the past two weeks. Unfortunately, few in the Trump administration perceived that moment as a golden opportunity for drastic preparation for the virus. The much-criticized measures China took were observed and criticized, but not valued as an opportunity for the West and the U.S. to prepare.

February: Anger

As the month of February progressed, the reported cases spread to other countries, not only to China’s neighboring nations such as South Korea, but also to others closer to the North American psyche, such as Italy, Spain, France, U.K., Iran, among other nations. While entry restrictions were being extended for foreigners from these places, the increase in cases in each State were not accompanied by any more specific Federal measure regarding immobility or social isolation. So even at late dates like February 11, Trump declared with overconfidence disguised as optimism: “the heat, generally speaking, kills this kind of virus”, and “by April, when it gets a little warmer [here] it [the virus] miraculously goes away”. For its part, the media, still quiet weeks ago, were beginning to worry significantly about the real possibility of a massive and uncontrolled spread of the virus in the United States. In this context, on February 24, the Trump administration made a request for USD 2.5 billion from the Congress, as an emergency fund to fight against the then-epidemic.

President Trump during one of his public speeches in February 2020.

(Source: Anadolu Agency)

At the same time, the figures from the other side of the world were encouraging. Measures once seen as extreme in China were beginning to yield good results and being praised by the World Health Organization.³ The contagion peak of February 4 (3887), after some ups and downs, had decreased considerably and by the middle of the month, the decreasing trend was clear. The U.S. media reported this notable improvement. However, they still expressed doubt and criticism regarding mobility restrictions, especially in the Hubei province, where the mandatory quarantine had led to the closure of traffic between towns and the isolation of the population in their houses. The classification of the degree of alert in each city of Hubei, then even with the vast majority in red, was also subject to criticism and false information that the Chinese government was minimizing the real expansion of the coronavirus. A second wave of videos flooded the networks to supposedly demonstrate this. However, the vast majority of these videos were totally decontextualized or markedly outdated.

Hubei lockdown map as of the beginning of March 2020.

(Source: the Chinese Government)

While improvements in China were evident based on the sharp decline in the newly-confirmed cases and the rising rate of recoveries after treatment, President Trump still maintained his rhetoric of downplaying the matter, vigorously and angrily criticizing the media for showing the COVID-19 epidemic as the worst possible epidemic, and calling the media irresponsible, thereby causing unwarranted financial panic. Even near the end of the month, Trump declared “the coronavirus is very much under control in the U.S.”, while mistakenly attributing the then-null existence of American COVID-19 deaths as an evidence of low risk of this epidemic. The last days of February were not better in this regard. Much-criticized Mike Pence was commissioned to lead the national response strategy against COVID-19,⁴ while President Trump closed the month beginning to recognize the coronavirus problem in his rhetoric. However, Trump even minimized the press whom he had accused of being in “hysteria mode” as they had been exaggerating the problem, evaded all responsibility, blamed the Democratic Party for politicizing the issue, and explicitly declared: “The Democrats are politicizing the coronavirus, and this is their new hoax”. Meanwhile, on February 27, the Dow Jones, the S&P 500, and the NASDAQ-100 all fell into a correction during one of the worst trading weeks since the financial crisis one decade before.⁵

March: Bargaining

After more than a week of negotiations, on March 4, the U.S. Congress agreed to release USD 8.3 billion as financing for the fight against COVID-19, of which more than 35% will be distributed to research, diagnostics, and vaccine development, and more than 25% as a fund for the Centers for Disease Control and Prevention (including $950 million earmarked to support state and local health agencies). On March 6, with Trump’s signature, the agreement passed as law. Nevertheless, by March 9, all Wall Street indexes fell more than 7%, and other foreign markets reported important contractions as well, bringing about the worst fall since the financial crisis of 2008.

After a month of little foresighted actions, the second week of March finally marked a point of change in the actions as well as the rhetoric of the president regarding the coronavirus. As the infected cases began to double in less than 24 hours in some States, officials began to declare internal states of emergency. By then, the number of infections had risen exponentially and already exceeded 1,000 people. Given this, various institutions, such as colleges and universities, announced their move to launch virtual classes. In turn, stores gradually received the requirement to limit public influx. The measures were generally taken by surprise by the population of the most-affected States who were, until then, oblivious to the actual dimensionality of the problem. Despite this, the response of the population during this second week of March was still quite lax, largely due to several measures taken by each State not being mandatory and the absence of a Federal-level speech according to the circumstances.

On March 10, Harvard announced it was moving to online classes for the rest of the semester.

(Source: Own work)

On March 11, just hours after the World Health Organization re-categorized the situation as a pandemic,⁶ Trump surprisingly addressed the nation by announcing, among other measures: the suspension of all flights from Europe to the United States, the postponement of tax payments from their initial deadline (April 15), and a request to the Congress for financial support to quarantined workers who are caregivers or in sick. Despite the announcement by the Federal Reserve of injecting USD 1.5 trillion into the economy, the reaction of the markets was not the best, and the Stock Index Futures fell significantly during the speech. Not only that, the next day, the Dow Jones Index fell 10%, its lowest drop since 1987. Days later, and after long negotiations between the Speaker of the House and the Secretary of the Treasury, on March 14 the House of Representatives favored the Families First Coronavirus Response Act, which guaranteed the provision of free tests, emergency payments for work stoppages due to illness, and other measures aimed at dealing with the now “inevitable” crisis and stabilizing the highly moved stock markets. However, on March 16, all Wall Street indexes fell more than 12%.

U.S. domestic flights started to be cancelled during the third week of March.

(Source: Own work)

By the third week of March, the situation began to open up as the restriction of mobility and quarantines in cities such as New York, Los Angeles, and San Francisco began to take effect given the increase in infections, which in one week exceeded the marks of 5,000, 10,000, and 20,000 confirmed cases respectively, in just a few days of differences.⁷ Faced with the government’s doubts about carrying out strict quarantines in the main focus cities, the response of the population in these cities who were under self-isolation began to be more common and aware before the media reports. Trump then declared, perhaps somewhat sarcastically and sadly, for the story: “The U.S. will be powerfully supporting those industries […] that are particularly affected by the ‘Chinese’ Virus (!). We will be stronger than ever before!” and “I felt it was a pandemic long before it was called a pandemic”. The media, in turn, showed great concern and criticism to the intertemporal inconsistencies in the decisions, the discourse of the Trump administration, and the lack of effective leadership in face of crisis.

What may lie beyond: Depression and Acceptance

What happens from now on is still a matter of speculation, derived by the degree of expansion that the virus may spread and the responses of governments to this. At the end of the third week, the number of infected in the U.S. exceeded 12,000 cases, and measures of social isolation or immobility were still relatively weak and late, not only with respect to those taken more than a month and a half ago in China, but with respect to those recently taken by other nations in the Americas (such as Peru, briefly mentioned as an example by president Trump in one of his more recent speeches). Due to political and cultural issues, the necessary restriction of mobility does not occur strongly and if it does, it occurs quite late, which according to various doctors and economists, will cause high costs for public health and the nation’s economy (and with it from the world) in the coming weeks and months. This has led many analysts to worry about a great possibility of an upcoming recession.

Epidemic curve of COVID-19 by date of report as of March 20, 2020.

(Source: Wikimedia Commons, based on data from WHO and NHC)

The current COVID-19 pandemic has been one of those events that has come to show more than anything the weaknesses of our nations. Regarding the U.S., the once-strong economy that was able to overcome various wars and lead the world for several decades, today faces one of its greatest challenges, not only from the pandemic, but also from its own inconsistencies in the current administration, which have missed a golden opportunity to prepare and take more severe measures against COVID-19 at an earlier time. Although some comment that the context may mark a breaking point in world geopolitical leadership, the truth is that while China has sent medical and volunteer support to Italy and other nations in crisis⁸, the U.S. has plunged into isolation into its own public health crisis, that it still does not give clear signs to overcome in the near future. And if it does, it will probably still have to face an economic crisis which will also give a lot to talk about in future. In this sense, the U.S. (and the whole World indeed) is currently facing a scenario with implications that may not only be comparable to that of 9/11 or the 2008-2009 financial crisis, but to that of WWII to certain extend.⁹

A close-up of President Trump’s notes shows “Corona” crossed-out and replaced with “Chinese”.

(Source: The Washington Post)

In such difficult times, it is a pity for the American people to have no strong and congruent leadership from its President, so distinct to what the country used to have in previous decades and administrations, when in spite of all sort of criticism, it not only managed to deal with and overcome all sorts of crisis, but also exert its leadership and successful results as an example for the world. Maybe, in the context of a crisis where humanity is lacking clear leadership, we should accept that a door has just opened for a new exchange between China and the U.S., at least in terms of international cooperation and global influence.¹⁰ Only time will tell.

Density map of COVID-19 total confirmed cases as of March 20, 2020 (adjusted per capita).

(Source: Wikimedia Commons, based on data from WHO and NHC)

(This article was written until March 22, 2020.)

(Please note: the above contents only represent the views of the author, and do not represent the views or positions of the Taihe Institute.)

Notes:

[1]Holshue, M., et al. (March 2020). First Case of 2019 Novel Coronavirus in the United States. The New England Journal of Medicine, 382 (10): 929–936.

[2]The Paper. (January 29, 2020). The closing of Xiang Yang Railway Station marked the lockdown of the last prefecture-level city of Hubei province.

Retrieved from https://www.thepaper.cn/newsDetail_forward_5671283

[3]World Health Organization. (February 4, 2020). WHO praises China's effective control measures, calls for world preparedness, not panic.

Retrieved from http://www.xinhuanet.com/english/2020-02/04/c_138753687.htm

[4]The New York Times. (February 26, 2020). Trump Names Mike Pence to Lead Coronavirus Response.

Retrieved from https://www.nytimes.com/2020/02/26/us/politics/trump-coronavirus-cdc.html

[5]USA Today. (February 27, 2020). Dow plunges 1,191 points, its biggest one-day point drop, as coronavirus fears escalate. Retrieved from

https://www.usatoday.com/story/money/2020/02/27/dow-markets-plunge-correction-coronavirus/4889977002

[6]World Health Organization (March 11, 2020). WHO Director-General's opening remarks at the media briefing on COVID-19. Retrieved from

https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020

[7]World Health Organization. (March 21, 2020). Novel Coronavirus (COVID-19) Situation.

Retrieved from https://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd

[8]The Wall Street Journal. (February 18, 2020). Chinese Doctors and Supplies Arrive in Italy.

Retrieved from https://www.wsj.com/articles/chinese-doctors-and-supplies-arrive-in-italy-11584564673

[9]Deutsche Welle. (March 18, 2020). Merkel: Coronavirus is Germany's greatest challenge since World War Two.

Retrieved from https://www.dw.com/en/merkel-coronavirus-is-germanys-greatest-challenge-since-world-war-two/a-52830797

[10]Foreign Affairs. (March 18, 2020). The Coronavirus Could Reshape Global Order.

Retrieved from https://www.foreignaffairs.com/articles/china/2020-03-18/coronavirus-could-reshape-global-order

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