Top Economist Says China’s Approach To Covid And Stimulus Is So Different And Smarter Than U.S. Approach

Top Economist Says China’s Approach To Covid And Stimulus Is So Different And Smarter Than U.S. Approach

covid stimulus
A man walks by an electronic stock board of a securities firm in Tokyo, Monday, Oct. 19, 2020. Shares advanced in Asia on Monday after China reported its economy grew at a 4.9% annual pace in the last quarter, with consumer spending and industrial production rising to pre-pandemic levels. (AP Photo/Koji Sasahara)

China’s people-first approach to covid-19 protected its citizens against the pandemic with mandatory masks and aggressive testing — a sharp contrast to the U.S. approach, which used monetary and fiscal policies to liberate the economy rather than public-health measures to contain the virus.

You can put a price tag on the two different approaches, according to Stephen S. Roach, a faculty member at Yale University and former Chairman of Morgan Stanley Asia.

Third-quarter sequential real GDP growth in the U.S. was around 35 percent — a welcome turnaround from the record decline during the lockdown, but about 20 percent less than China’s post-lockdown rebound, Roach wrote in a guest column for Project Syndicate.

Roach’s article was titled, “China leads again.”

In the U.S., President Trump tried to downplay his own covid-19 infection and people still refuse to take expert health guidance despite skyrocketing cases and hospitalizations. White House coronavirus task force coordinator Deborah Birx recently toured North Dakota, which has had more coronavirus infections per capita than any other state. Here’s what Birx observed:

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“… in your restaurants and frankly, even in your hotels, this is the least use of masks that we have seen in retail establishments of any place we have been,” Birx said.

By contrast, there is no political and public resistance in China to masks, social distancing, and testing as requisite norms of the covid-19 era, Roach wrote.

The U.S. is in its third serious wave of infection while China continues to control new outbreaks. For example, 9 million citizens in Qingdao were tested in five days after a small outbreak of less than 20 residents.

Both economies experienced comparable contractions during their lockdowns, which came one quarter later for the U.S. China’s 33.8-percent sequential (annualized) plunge in the first quarter was almost identical to the 31.2-percent U.S. contraction in the second quarter, Roach reported.

“Post-lockdown rebounds are not the real story, however,” Roach wrote. “The true test comes after the snapback, and that’s where China’s strategy has its greatest advantage.”

China’s approach used monetary and fiscal policy to reinforce the post-lockdown snapback only after insulating its citizens from contagion with strictly enforced public-health measures.

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The U.S. unwillingness to focus on covid containment “speaks volumes to the ever-present perils of a double-dip recession,” Roach said. “That is exactly what has happened in the aftermath of eight of the last 11 U.S. recessions. The contrast with China’s self-sustaining recovery couldn’t be more striking.”

In an environment of anti-China sentiment, Twitter users commented on the contrast between the U.S. America-first response and China’s people-first response.

“Different from the US, China wins the fight against the pandemic. Fact proves that these measures China has taken effective”, Andy Soo tweeted.

“The difference is because it’s an election year in the US. So the priority is to prop up the stock market rather than take people first,” going global tweeted.

“Maybe because of the election year, or maybe due to most westerners care freedom most, any disease control measures might harm their personal rights, will be strongly opposed,” Catherine Chen tweeted.

Read more: China State-Backed Media Says U.S. Sacrificed 150,000 Bodies For Stock Market