Qi says regular trips to the theme park boost her mental well-being,
which has suffered over the 15 weeks she’s spent on the front line of
the coronavirus pandemic. Her only respite has been dressing up at home
in one of her 20-odd Disney princess costumes, she says, to escape the
real world of death in her hospital. “Disney is pure happiness and takes
my mind off all the pressure I feel at work,” Qi says, grinning behind
her face mask as she enters Shanghai’s iteration of the Magic Kingdom on
May 11, the day it reopened. “Here, everything is wonderful.”
If ever the world needed a dose of magic, it’s now. But of the dozen
theme parks that Disney runs across the globe, only the Chinese park is
open today. The reopened facility may be operating at 30% capacity,
under strict social-distancing regulations, but in the U.S., all Disney
parks remain mothballed. The company has furloughed 100,000 workers,
closed stores and theme parks, and put its star-studded box-office
productions on ice. Its share price has tumbled by almost a third.
Watching families in Shanghai browse $14 Winnie the Pooh mugs while
Americans remain in the grip of the coronavirus, it’s hard not to wonder
whether the mixed fortunes of this most iconic of American institutions
indicate a broader changing of the guard. The world’s two biggest
economies were already locked in a trade war that could cost the global
economy $470 billion. They also spar over intellectual-property theft,
cyberespionage, the North Korean nuclear threat and the incarceration of
more than 1 million ethnic Muslims in China’s Far West. Differences in
how each has handled the pandemic may be not only the latest rupture,
but the one that shapes the future.
When the coronavirus emerged in December, China acted quickly and
forcefully to halt it in its tracks. It ordered a population equivalent
to a fifth of humanity to barricade themselves at home, and hoisted up
the drawbridge to visitors. Those draconian measures cost China an
unprecedented 6.8% drop in GDP in the first quarter, but they worked–the
country’s official (though disputed) infection count is now below
85,000, compared with 1.3 million in the U.S. In the virus epicenter of
Wuhan, final-year students are scheduled to go back to class on May 20.
Their parents, like adults across the country, are getting back to work.
In America, President Donald Trump has encouraged states to reopen as
they see fit, but the U.S. so far has lagged in providing the tools
needed to do that safely–tests to detect the disease and track
outbreaks. Over the course of the pandemic, the U.S. has so far tested
around 9 million people, less than 3% of its population. Meanwhile, to
address a new outbreak in Wuhan, China announced plans to test all 11
million of the city’s residents over the space of 10 days.
The U.S. response to COVID-19 has been so muddled, it’s not yet possible
to say how much of the sluggishness is due to unreadiness, how much to
incompetence, and how much to the American system of governance, with
its emphasis on individual freedoms over centralized authority. What
does seem clear is that the performance of the Chinese system of broad
state controls–over both citizens and the economy–offers Beijing a
unique chance to steal a march on the future. During a recent tour of
China’s northern province of Shaanxi, President Xi Jinping instructed
cadres to “turn the crisis into an opportunity.” How well it succeeds in
doing so could have ramifications for the entire world order.
XI already had grand plans. The President’s “China Dream” to take
“center stage of the world” includes strategies like Made in China 2025
to upgrade to hightech manufacturing, and China Standards 2035 to become
the dominant writer of rules that govern future technologies. Beijing’s
new goal, analysts say, is to leverage the pandemic to catalyze 10
years of reform into just two. Speaking in Shaanxi in April, Xi stressed
the need to “push forward with investment in 5G, the Internet of
things, artificial intelligence, the industrial Internet and other
new-type infrastructure.”
China already appears to be bouncing back. Its economy–built on a
combination of manufacturing expertise, connectivity and first-class
infrastructure, plus the world’s largest middle class of domestic
consumers–was operating at 87% of typical output on May 12, according to
the Trivium National Business Activity Index. In April, though imports
were down 14.2%, China’s exports were up 3.5% year on year, surpassing
predictions largely because of medical products sent overseas.
But the economy won’t be the same as before. Crises act like centrifugal
forces–the sturdier and well-positioned institutions can survive, but
weaker outliers are likely to be ripped to shreds. And while China has
taken some measures to rescue companies–tax breaks and loan deferments
for small and medium enterprises (SMEs)–no grand cash injection is
expected like the $586 billion plowed into state projects following the
2008 financial crisis. “The support policies introduced earlier are
adequate,” Premier Li Keqiang said May 6. The message appears to be that
the true way out of the crisis is investing in innovation.
Some of China’s most successful companies are helping choose winners–and
reinjecting liquidity into the market. MYbank, run by Jack Ma’s online
shopping colossus Alibaba, is on track to issue a record $282 billion in
new loans to SMEs this year, up nearly 18% from 2019. Delivery service
Meituan has been working with state banks to distribute low-interest
loans totaling $2.8 billion since early February to 20,000 restaurants
and retailers on its platforms, repurposing sales data to quickly assess
which clients require the most urgent help.
The pandemic is already providing a springboard for change. Shanghai has
published plans to build 100 unmanned factories by 2025, guarding
against future labor disruptions. Before the crisis, online health care
service JD Health took 10,000 consultations per day. But as hospitals
and clinics became swamped with coronavirus patients, that rocketed to
150,000, with the firm’s own pharmacy delivering prescription medicines
directly to patients’ homes. Xin Lijun, CEO of the $7 billion–valued
company, says the added convenience of online health care means that
muscle memory will remain after the COVID-19 crisis abates, helping ease
pressure on China’s overstretched, hospital-centric health care system.
“People have developed the habit of getting diagnosis and treatment
online,” Xin says. “This greatly reduces the pressure on traditional
hospitals.”
