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Coronavirus and China’s changing international perception

Across the world, people are under coronavirus lockdown while healthcare systems are struggling to treat patients.

Coronavirus first reached the public eye in China, but the virus is now seemingly under control there with people largely out of lockdown after a successful multi-faceted nationwide campaign. With many projections that the disease and lockdown in the West will continue for some time, it appears that the economic impact on China may be among the ‘least worst’.

But how is the coronavirus incident changing the international perception of China?

On the one hand, China has a large coronavirus-related medical aid/influence programme. This programme might change perceptions of the country for the better in some markets, if handled sensitively. A detailed assessment is here.

On the other hand, events are changing fast. There are many indicators that opinion among western public and political audiences about China is worsening, and that changes in governments’ policies will follow.

Firstly, Western media is increasing assessing the reasons behind the outbreak and China’s role in this. This mainly notes the theory that so-called ‘wet’ animal markets which included live wild animals and those for livestock were behind the outbreak, as one such market was where the outbreak was first detected in Wuhan. More serious is that even mainstream US and UK news outlets are now pointing the finger at Wuhan’s Disease Control laboratory as a source of the outbreak, an idea that was previously treated more like a ‘conspiracy theory’. Link

These critical voices have also been raising concerns over China’s apparent slow response to the outbreak in January, as well as the reliability of China’s coronavirus case and death numbers, including accusations that they have been significantly under-reported. They site Chinese news sources that imply significant problems with the official death toll, e.g. Caixin Link. US news sources are becoming very direct, with officials now directly accusing China of manipulating figures Link.

There are many signs that this concern is being shared by increasing numbers of politicians and policymakers.

This is especially noticeable in the US, where political ‘hawks’ in the US are gaining traction with accusations over China’s failings about coronavirus. Trends on social media reflect this too, where increasing numbers of anti-China commentators are observable.

More concerning for China is that adherents of this viewpoint are growing in other developed countries too.

 

France

Scepticism on how China has managed the epidemic has progressively risen among public opinion and the media, reporting general doubts and questioning China’s ‘instrumentalisation’ of the crisis.

More importantly, last week President Macron openly voiced doubts on how China handled the crisis (FT interview), stating that “clearly, things have happened that we don’t know about” in “countries where information does not circulate as democratically as it does in France”, adding that “let’s not be so naive as to say that China better managed the crisis”.

Chinese Ambassador Lu Shaye – who has already made several controversial statements – responded by saying that “China is not hiding anything” and that “the President’s speech was distorted by the media”. This fuelled the irritation of the French Government, already outraged by a previous publication of a text criticising French nursing home staff. The Ambassador was summoned by the French Minister of Foreign Affairs, who stated “I cannot accept that the staff of our Ehpad [care workers in nursing homes’] should be slandered by anyone, including the Chinese Embassy”.

In addition to the heightened diplomatic tensions, the French government has strongly expressed the need to relocate a number of strategic industries to France to reduce dependence on Asian suppliers. This seems to be reaching a consensus among public and private stakeholders, notably with automotive equipment manufacturers calling for a “Relocation Pact” for the entire sector.

Before the crisis, opinion in France had already been growing cautious concerning Chinese companies, strengthening control over foreign investments in strategic sectors and legislation designed with Chinese companies in mind e.g. ‘Huawei Bill’, while implementing policies to compete with China in several fields (A.I., industry etc.).

 

UK

Foreign Secretary Dominic Raab has called for an investigation into China’s handling of Coronavirus, stating on 17 April “I think there absolutely needs to be a very, very deep dive after the event review of the lessons – including of the outbreak of the virus – and I don’t think we can flinch from that at all, it needs to be driven by the science …there is no doubt we can’t have business as usual after this crisis, and we will have to ask the hard questions about how it came about and how it couldn’t have been stopped earlier.”

This is now popular among his party’s MPs, with ‘mainstream’ Conservative Party politicians vocally criticising China’s handling of coronavirus. Former Conservative Party leader and former Foreign Secretary William Hague recently commented ‘The West must take a firmer line [against China] … China’s leadership would be well-advised to desist from this buck-passing, and its ham-fisted attempts to minimise that damage are currently making it worse’.  

Even Damian Green MP, Former First Secretary of State (Deputy Prime Minister) and leader of the moderate ‘one Nation Caucus’ of Conservative MPs has criticised China, stating that ’it is undeniable that the pandemic started because of unhygienic practices in Chinese markets, which have been known about for years, and that the Chinese authorities were dilatory in informing the WHO about the outbreak. ‘The UK stance towards China, regrettably, may have to become similar to our attitude to Russia in the more peaceful stages of the Cold War.’

Anonymous comment from officials has gone further, with one national newspaper reporting that China is due a ‘reckoning’ over its handling of the crisis, including a ‘campaign of misinformation’ and its ‘attempts to exploit the pandemic for economic gain’.

 

Germany

The German press, which was already relatively sceptical of China by Western European standards, has become even more so following coronavirus. However, China’s coronavirus record has yet to significantly enter the public policy debate. This may have some connection with Chancellor Merkel’s ‘unemotional’ style: she is very unlikely to join the ‘blame game’ as appears to be gaining traction in some other countries.

That said, on Federal Foreign Minister Heiko Maaß commented on China’s announcement that statistics for deaths in Wuhan needed to be raised by 50% (which in theory might be welcomed as a move towards being more open) by saying that the change ‘once again’ fed scepticism about the transparency of the Chinese government – and demanded further clarity.

 

European Commission

EU High Representative for Foreign Policy, Josep Borell, commented on 24 March: “we must be aware there is a geo-political component including a struggle for influence through spinning and the ‘politics of generosity’. Armed with facts, we need to defend Europe against its detractors” – a clear reference to China’s medical aid programme.

 

Sweden

Carl Bildt, former Prime Minister, commented: “According to one recent study, if Chinese authorities had openly acknowledged the threat and responded properly just three weeks earlier than they did, the spread of Covid-19 could have been reduced by as much as 95 per cent …. Because local negligence, ignorance, and censorship prevailed at the critical moment, the entire world is now paying an enormous price.”

 

Australia

A diplomatic argument with China has arisen following the Australian government’s call on 19 April for an international inquiry into the origins of coronavirus and Prime Minister Scott Morrison then seeking support for this with other western leaders. In response, the Chinese ambassador to Australia, Cheng Jingye, noted in a media interview that this could lead to Chinese consumers boycotting Australian beef, wine, tourism and universities. Link

 

Japan

On 5 March, Japanese Prime Minister Abe proposed a ‘shift away from China’ policy: “Due to the coronavirus, fewer products are coming from China to Japan … People are worried about our supply chains … we should try to relocate high added value items to Japan … And for everything else, we should diversify to countries like those in ASEAN.” Link As part of a major stimulus package, the Japanese government has also designated 220bn ($2.2bn, €1.88bn) to support companies to relocate away from China.

 

And concerning the WHO

Supplementary to the above, but also relevant, is how even China’s role with the WHO may come into focus, e.g. President Trump’s announcement that the US will refuse to pay WHO membership fees, and an embarrassing interview for senior WHO representative Bruce Aylward when confronted about Taiwan’s representation (within the WHO) Link.

An indication of how this is resonating are comments from Japanese Deputy Prime Minister Taro Aso, who was deeply critical in the Diet, commenting “People think the World Health Organization should change its name … It shouldn’t be called the WHO. It should be renamed the CHO” [China Health Organization].

 

Looking ahead

It is relatively easy for China to portray tensions with the US as a bilateral dispute between the two countries.  However, if several other high-profile countries join the US, this would be much more embarrassing.

It is likely that some such governments are currently avoiding criticising China, both to avoid an international incident, but also because many medical supply chains are dependent on China – they are desperate not to interrupt these supplies at a critical time.

However, once the crisis is under control, these and possibly other like-minded governments are likely to response to pressure from public, political and administrative opinion.

This is likely to lead to the following:

  • Attention about the origins of the outbreak – Unfortunately for China, western security analysts are pointing out that this is the second time a major coronavirus outbreak has happened in China (the first being SARS in 2002) – making this a public health risk for their governments until they are reassured it won’t happen again. Some of these same sceptics note that even China’s actions in restricting ‘wet markets’ and tightening controls over secure laboratories implies that the Chinese government believes these are likely reasons for the epidemic’s origin.
  • This issue is likely to result in increased demands for transparency over the coronavirus outbreak, perhaps including requests for an international investigation – possibly even by organisation(s) other than the WHO which has lost credibility among Western audiences. China will undoubtedly refuse any such calls, probably describing them as part of a politicised ‘blame game’.
  • Increasing attention on ‘decoupling’ China from supply chains / relocation of factories to Western countries in strategic industries. Advocacy of this has previously been restricted to China sceptics/‘hawks’ – it is likely to become more mainstream.Increasingly fraught international cooperation with China. Even though many policymakers recognise that global issues cannot be solved without working with China (some of which also support a harsher policy vis-à-vis China), the Chinese government is known for taking a holistic and not independent view of such conflicting priorities. They are unlikely to take a harsher approach lightly, which will almost certainly impact international cooperation at all levels.

In summary, although China has one some positive reputational gains from its response to the virus and its post-crisis aid programme, this is likely to be heavily outweighed by a backlash from western audiences. This will result in growing international tension.

 

 How should international companies and associations in China react?

This will depend on an enterprise’s specific situation. A few general suggestions include to:

  • Be ready for any backlash against foreign enterprises, especially among organisations based in countries where the government may shift their international position on China.
  • Be careful to be seen as a good local stakeholder. Chinese public opinion is often sensitive to shifts in China’s international relations. This is especially important if business partners have close government connections e.g. State-Owned Enterprises.
  • Make sure you understand the stakeholder and reputation environment and know how your organisation is perceived.
  • If operating in sensitive and/or ‘nationally strategic’ industries, be ready for any political pressure and/or shifts concerning ‘decoupling’.
  • Always maintain a respectful attitude towards China. Reputation is easily lost and hard to rebuild once consumer and/or governmental confidence is damaged.
  • Don’t be unnecessarily negative. Indeed, now that the virus is largely under control in China, bolstering the economy is a top government priority and international enterprises are an important part of this effort. Positive business developments in China are likely to be received well. China respects long-term commitment which can reap rewards.

 

How should Chinese companies in mature markets react?

Similar advice applies as with international enterprises in China. Chinese companies should:

  • Be ready for changes in local perceptions of China if this is likely.
  • Be seen as good local stakeholders, committed to the markets in which they are invested, behaving like and to the same standards as local companies.
  • Know how local stakeholders and the public view your company.
  • Be as transparent as possible.
  • Communicate with stakeholders frequently. It is insufficient to just behave well – it is important to be seen to be doing so. Unfortunately, Chinese companies are often regarded as communicating infrequently or poorly in mature markets