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DANGEROUS SECRETS—SARS AND CHINA’S

HEALTHCARE SYSTEM

ROUNDTABLE

BEFORE THE

CONGRESSIONAL-EXECUTIVE

COMMISSION ON CHINA

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

MAY 12, 2003

Printed for the use of the Congressional-Executive Commission on China

(

Available via the World Wide Web: http://www.cecc.gov

CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

LEGISLATIVE BRANCH COMMISSIONERS

House Senate

JIM LEACH, Iowa, Chairman

DOUG BEREUTER, Nebraska

DAVID DREIER, California

FRANK WOLF, Virginia

JOE PITTS, Pennsylvania

SANDER LEVIN, Michigan

MARCY KAPTUR, Ohio

SHERROD BROWN, Ohio

CHUCK HAGEL, Nebraska, Co-Chairman

CRAIG THOMAS, Wyoming

SAM BROWNBACK, Kansas

PAT ROBERTS, Kansas

GORDON SMITH, Oregon

MAX BAUCUS, Montana

CARL LEVIN, Michigan

DIANNE FEINSTEIN, California

BYRON DORGAN, North Dakota

EXECUTIVE BRANCH COMMISSIONERS

PAULA DOBRIANSKY, Department of State*

GRANT ALDONAS, Department of Commerce*

D. CAMERON FINDLAY, Department of Labor*

LORNE CRANER, Department of State*

JAMES KELLY, Department of State*

JOHN FOARDE, Staff Director

DAVID DORMAN, Deputy Staff Director

* Appointed in the 107th Congress; not yet formally appointed in the 108th

Congress.

(II)

(III)

C O N T E N T S

Page

STATEMENTS

Henderson, Gail E., professor of social medicine, University of North Carolina

School of Medicine, Chapel Hill, NC .................................................................. 2

Huang, Yanzhong, assistant professor of political science, Grand Valley State

University, Allendale, MI .................................................................................... 6

Gill, Bates, Freeman Chair in China studies, Center for Strategic and International Studies, Washington, DC ...................................................................... 9

APPENDIX

PREPARED STATEMENTS

Henderson, Gail E ................................................................................................... 28

Huang, Yanzhong .................................................................................................... 33

Gill, Bates ................................................................................................................. 41

SUBMISSIONS FOR THE RECORD

Editorial by Bates Gill and Andrew Thompson from the South China Morning

Post, entitled ‘‘Why China’s Health Matters to the World’’ dated Apr. 16,

2003 ....................................................................................................................... 45

Editorial by Bates Gill from the International Herald Tribune, entitled

‘‘China Will Pay Dearly for the SARS Debacle’’ dated Apr. 22, 2003 .............. 46

Editorial by Bates Gill from the Far Eastern Economic Review, entitled

‘‘China: Richer, But Not Healthier’’ dated May 1, 2003 ................................... 47

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DANGEROUS SECRETS—SARS AND CHINA’S

HEALTHCARE SYSTEM

MONDAY, MAY 12, 2003

CONGRESSIONAL-EXECUTIVE

COMMISSION ON CHINA,

Washington, DC.

The roundtable was convened, pursuant to notice, at 2:30 p.m.,

in room 2255, Rayburn House Office Building, John Foarde [staff

director] presiding.

Also present: David Dorman, deputy staff director; Tiffany

McCullen, office of Under Secretary of Commerce Grant Aldonas;

Susan O’Sullivan, office of Assistant Secretary of State Lorne

Craner; Andrea Yaffe, office of Senator Carl Levin; and Susan Roosevelt Weld, general counsel.

Mr. FOARDE. Good afternoon. I would like to welcome everyone

to this staff-led issues roundtable of the Congressional-Executive

Commission on China [CECC]. On behalf of Senator Chuck Hagel,

our Co-Chairman, and Congressman Jim Leach, our Chairman,

and the members of the CECC, welcome to our panelists and to

those of you who are here to listen to their testimony.

The subject that we are going to tackle today is important and

timely. It has been in the news a lot over the last couple of months.

Specifically in the case of Severe Acute Respiratory Syndrome

[SARS], mainland China has reported more than 4,600 cases and

over 219 deaths from the disease. Recent news articles report that

over 16,000 people are now under quarantine in Beijing, and thousands more in Nanjing and elsewhere. These massive quarantine

measures are becoming commonplace throughout China in the

country’s increasingly stringent efforts to control the epidemic.

While the number of cases in the rest of the world seems to be stabilizing or possibly even decreasing, China’s caseload continues to

increase as the disease spreads into the country’s interior.

A problem particular to China is that migrant workers, alarmed

by the rise of the disease in the cities, have shown a tendency to

head home to poverty-stricken inland provinces in hopes of avoiding infection. In some cases, of course, they are bringing the illness

with them. In a recent statement, Premier Wen Jiabao warned that

the country’s rural healthcare system is weak and might prove incapable of handling a SARS epidemic in the countryside. Some observers are now asking whether the public health system, already

stretched thin by the central government attempts to shrink local

government budgets, will simply collapse under the weight of SARS

and the oncoming tidal wave of HIV/AIDS.

2

But beyond public health, the SARS outbreak has raised broader

social, political, and economic questions that demand new policies

from Chinese leaders. We wanted to explore those policies, the existing system, specifically the SARS problem, and look at the medium and longer term. So, we are delighted to have with us this

afternoon, three distinguished panelists. I will introduce all of them

individually before they speak, but welcome to Dr. Gail Henderson

from the University of North Carolina at Chapel Hill; Huang

Yanzhong, Ph.D. from Grand Valley State University; and Bates

Gill, Ph.D., from here in Washington at the Center for Strategic

and International Studies [CSIS].

Without further ado, let me introduce Dr. Gail Henderson. She

is a medical sociologist, professor of social medicine, and adjunct

professor of sociology at the UNC-Chapel Hill. Her teaching and research interests include health and inequality, health and

healthcare in China, and research ethics. She is the lead editor of

‘‘Social Medicine Reader,’’ and she has experience with qualitative

and quantitative data collection analyses, as well as conceptual and

empirical cross-disciplinary research and analysis.

Professor Henderson and our other panelists, as usual, will be

asked to speak for 10 minutes. I will keep track of the time and

alert you when you have 2 minutes remaining. And then, as is usually the case, if we don’t get to all of your points, we will try to

catch them up in the question and answer session after all three

panelists have spoken.

So with that, I would like to recognize Professor Henderson.

Thank you very much for coming.

STATEMENT OF GAIL E. HENDERSON, PROFESSOR OF SOCIAL

MEDICINE, UNIVERSITY OF NORTH CAROLINA SCHOOL OF

MEDICINE, CHAPEL HILL, NC

Ms. HENDERSON. Thank you very much for inviting me. I feel

very honored to be here, and I hope that we will all have a really

fruitful discussion of the important topic at hand.

America has had a lot of images of the health and the public

health of China and the Chinese during the last century. It began

thinking of China as the sick man of Asia. Two decades later, after

the establishment of the People’s Republic, the dominant image

was healthy, red-cheeked babies born in a Nation that somehow

provided healthcare for all.

Of course, the real story about health in China is more complex

than either of those images. But in a country as vast and varied

as China still is, many realities are true. The recent spread of HIV/

AIDS and now the SARS epidemic have placed enormous stress on

the Chinese healthcare system, as you said in your introduction. It

is important to realize that any healthcare system, in no matter

how developed a country, would be stressed by this kind of a unprecedented epidemic.

To assist China in dealing with SARS, I think we must have a

clear understanding of the forces that have shaped this system and

the current epidemics. So, in my written testimony—which is

longer than the 10 minutes—I really focus on what I think the history can tell us about the Chinese healthcare system and its

strengths and weaknesses, and I think some of the current myths

3

that we have in our media, and our response to SARS in China.

I make four main points.

First, public health is not a money making operation. Public

health, differentiated from healthcare services, is disease surveillance, environmental sanitation, maternal and child health, health

education, nutrition, and food hygiene. Those do not make money.

China was able to revolutionize public health and its health status indicators, and establish a multi-tiered infrastructure of hospitals, public health departments, and clinics under Mao Zedong,

because of strong government support and resources. This is easier

to accomplish when market forces are held at bay, as they were

until Mao’s death.

The second point, China’s current healthcare system, curative

clinic hospital-based system, has been shaped by economic incentives in the post-Mao era familiar to all students of modern China.

They have emphasized the development of high technology hospital-based medical care, which had been substantially neglected

under Mao. The move away from a centralized collective welfare

system that had fostered a strong public health orientation resulted in de-emphasis of public health functions, especially at the

lowest levels. This has been well-documented by the Chinese and

others.

Aggregate income, of course, as you all know, rose substantially

in China as has health status in general, and continues until this

day to improve. But, inequality has also increased and with it

health and economic disparities between rich and poor. This is the

characteristic of this system as we know it now.

Third, infectious diseases often strike hardest at the most vulnerable groups, those with the least access to government safety nets.

This is true for HIV in China and true in all nations for HIV. The

fear with SARS is that weaknesses in the world health system,

particularly in remote areas, will make containing the disease

much more difficult.

The public health infrastructure remains. I really want to emphasize that. It can be supported and strengthened by forces now

at work in China and from outside. Long before the SARS epidemic, in the 1990s, the Chinese Government was developing a

very ambitious plan to respond to the breakdown of public health

services in rural areas. That plan went through a lot of pilot testing, was initiated in 2002, and it reinforces rural health insurance

and public health control, establishing public health—not curative

medicine—public health hospitals at the lowest levels. I think those

things are quite important to recognize.

Fourth, if we are to effectively assist China’s response to SARS,

we must understand the sensitivity for any government of the double-threats to public health and the economy, and reject—if you’ll

excuse me—the rhetoric of accusatory phrases like, Dangerous Secrets, the title of our roundtable. Instead, we must recognize and

build on the work of responsible dedicated professionals in China,

and the United States, and other countries, people who are bestpositioned to develop strategies to contain SARS and prevent the

emergence of other deadly pathogens.

Now it has been suggested that lessons from AIDS and how

China dealt with AIDS can be applied to SARS. So, I want to reVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
4

flect on this comparison a bit in the remainder of my testimony.

A number of recent media reports on the SARS epidemic remind

us that China’s secrecy and failure to respond characterizes its response to AIDS as well. These shortcomings were especially featured in media reports at the end of 2001, when it became known

that possibly thousands of commercial plasma blood donors in impoverished rural areas were becoming infected with HIV in China.

We excoriated the Chinese Government for allowing the AIDS epidemic to spread through hundreds of poor villages.

But, I would like to ask us all to reflect on a couple of things.

Thinking about that response, I think we have to ask how other

countries with far-greater resources have performed in responding

to the AIDS epidemic. We must also ask whether we apply a double-standard to some developing countries when it comes to their

public health performance. In fact, few governments, rich or poor,

have been immediately forthcoming about the spread of HIV within

their boundaries, and few, if any, have successfully stemmed the

spread of AIDS.

In my view, the use of public health challenges as shorthand political critiques is a real danger as we move forward to combat this

newest global threat, SARS. Just turning the lens a little bit, if the

Chinese applied the same shorthand to characterize the U.S.

healthcare system and its capacity to respond to crisis—a system,

I should remind you, that spends twice as much as the next big

spending country on healthcare per capita—what would they look

at? We might be reading in the Chinese press about systematic discrimination against African Americans who are ten times as likely

to die from HIV as whites in this country, reflecting the disgraceful

fact that disparities in morbidity and mortality rates between

blacks and whites are actually greater now than in 1950. We might

also be reminded of the CDC’s rapid response to protect U.S. senators from anthrax, while failing to extend the same response to

postal workers.

While I don’t minimize the real gravity of the HIV epidemic

among former plasma donors, or the negative consequences of

delay, I think the media’s focus on this aspect of the story drowns

out really important realities that I wanted to bring before this

Commission. They include evidence in the medical literature as

early as 1995 that the plasma donors in rural areas were being infected. International AIDS conferences in 1996 and later also reported on the studies of the blood supply and what people could do

in China to improve the quality in the testing, which was not very

good also during this time period.

By 2002, the Chinese Ministry of Health had a publicly outlined

plan for dealing with these and other populations with HIV. In

fact, China’s progress in developing HIV prevention and treatment

programs rarely makes the evening news. But, there has been an

extraordinary amount of assistance in the last few years provided

by the United States and other countries through biomedical and

scientific collaboration, and it is having a very important impact.

The NIH awarded a Comprehensive International Program on

Research on AIDS [CIPRA] grant to China in the summer of 2002.

That grant provides funds for vaccine development, research on

risk factors, behavioral interventions, treatment trials, and so on.

5

This also has fostered a lot of interest in human subjects protections, which I consider to be very important, because any NIH

money that goes to China has to have NIH human subject protections attached.

Perhaps most important, clinical research also has the potential

to focus attention on unmet treatment needs, just as in Africa

when the AIDS researchers of the world descended on Durban, and

they saw the epidemic in Africa and then it became unacceptable

to have some people get treatment and others not. In some ways

the same things have happened in China, and the government has

established funds for treatment in 100 counties in China identified

as the hardest hit by AIDS. This is extremely important. Again, although SARS is prompting a lot of activity on the part of the government, these things didn’t happen overnight. They have been in

the works for several years.

Statistics on disease and death rates are often used like Rorschach tests to measure the legitimacy of the government. Infectious diseases, including emerging pathogens like HIV and SARS,

are particularly potent foci for such critiques, in part because they

tend to fall hardest on the most vulnerable and the least wellserved by society. It is not clear how large the SARS epidemic in

China will be or how long it will last. I really want to emphasize

how little we know about this epidemic. There are still problems

defining cases. So, I think we have to be very careful, even with

the statistics that we have.

In order to assist China’s response, we must understand the

strengths and weaknesses in the system, the real strengths and the

real weaknesses. Actually, SARS and AIDS are a direct if unintended consequence of economic reform and integration into the

global community, which are reforms that the United States has

encouraged, and in which the business and scientific communities

play key roles. So, rather than focus on failures—and again, I think

everyone acknowledges that there have been considerable failures—we must credit China’s current efforts to contain the

epidemic in its hospitals, cities, and borders, and openness to international collaboration and information sharing for what they are

now, contributions to the global efforts to control this deadly disease and prevent and epidemic from becoming a pandemic. Thank

you.

[The prepared statement of Ms. Henderson appears in the appendix.]

Mr. FOARDE. Thanks very much. We can pick up some of the remaining points when we get to the Q and A, but very useful.

Next, I would like to recognize Professor Huang Yanzhong, who

is assistant professor of political science at Grand Valley State University and beginning in September of this year, Dr. Huang will

take up duties as assistant professor at the John C. Whitehead

School of Diplomacy and International Relations at Seton Hall University.

Dr. Huang received his Ph.D. in political science from the University of Chicago in 2000. He also completed a master’s degree in

international relations at the well-known Fudan University in

Shanghai, where he also received a bachelor’s degree in international politics. His research interests include global health, secuVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
6

rity and development, and Chinese politics. He has published numerous articles, and books, and journals. We are delighted to have

him with us this afternoon. Dr. Huang, please.

STATEMENT OF YANZHONG HUANG, ASSISTANT PROFESSOR

OF POLITICAL SCIENCE, GRAND VALLEY STATE UNIVERSITY, ALLENDALE, MI

Mr. HUANG. Thank you for the nice introduction. It is an honor

to be here to share with the Commission and the public my knowledge about the politics of public health and SARS in China.

As far as the impact of the SARS epidemic is concerned, it is now

clear that the Chinese leadership is facing the most severe socialpolitical crisis since the 1989 Tiananmen crackdown. Given the political aspect of the crisis, this testimony will focus on the problems

in China’s political system. It will proceed in three sections. I will

first discuss how problems in the political system allowed SARS to

transform from a sporadic nuisance to an epidemic that now affects

hundreds of millions of people across the world. I will then examine

the recent government crusade against SARS, with special attention on its implications for human rights and the rule of law in

China. I will conclude with some policy recommendations for the

Commission to consider. The complete written statement, which is

about 15 pages long, will be posted on the CECC Web page. What

I will present here is just a summary of the main points.

First, the making of the crisis. The events that unfolded during

November 2002 and April 2003 revealed two major problems inherent in China’s political system: coverup and inaction. As far as a

coverup is concerned, existing political institutions in China have

not only obstructed the information flow within the system but also

distorted the information itself. It is worth noting that while bureaucratic misinformation is not something unique to China, the

country’s refusal to enfranchise the general public in overseeing the

activities of government agencies makes it easy for upper-level government officials to be fooled by their subordinates. But, paradoxically, manipulation of data, even though it erodes the governing

capacity of the central Chinese state, also serves to shore up the

regime’s legitimacy. Because of the dying communist ideology and

the official resistance to democracy, the legitimacy of the current

regime is rooted in its constant ability to deliver socio-economic

progress. As far as this performance-based legitimacy is concerned,

government officials routinely inflate data that reflect well on the

regime’s performance while underreporting or suppressing bad

news such as plagues and diseases.

In explaining the government’s slow response to tackling the

original outbreak, we should keep in mind that the health system

is embedded in an authoritarian power structure. In the absence of

a robust civil society, China’s policymaking does not feature a salient ‘‘bottom-up’’ process to move a ‘‘systemic’’ agenda in the public

to a ‘‘formal’’ or governmental agenda as found in many liberal democracies. Because of this top-down political structure, each level

takes its cue from the one above. If the leadership is not dynamic,

no action comes from the party-state apparatus. The same political

structure also encourages lower-level governments to shift their

policy overload to the upper levels. As a result, a large number of

7

agenda items are competing for the attention of upper-level governments.

The problem here is that in the reform era the bias toward economic development has made public health the least of the concerns of Chinese leaders. Compared to economic issues, a public

health problem often needs an attention-focusing event, such as a

large-scale outbreak of a contagious disease, to be finally recognized, defined, and formally addressed. Not surprisingly, SARS did

not raise the eyebrows of top decisionmakers until it had already

developed into a nationwide epidemic.

Thanks to strong international pressure, the government finally

woke up and began to tackle the crisis seriously. In terms of the

policy implementation, the Chinese system is in full mobilization

mode now. Yet in doing so, a bias against routine administration

has been built into the implementation structure. In fact, the increasing pressure from higher authorities makes heavy-handed

measures more appealing to local officials, who find it safer to be

overzealous than to be seen as ‘‘soft.’’ There are indications that

local governments overkilled in combating SARS.

In some cities, those who were quarantined lost their jobs. Until

recently, Shanghai was quarantining people from some regions

hard hit by SARS, such as Beijing, for 10 days even if they don’t

show any symptoms. While overall, Chinese people are cooperating

with the government measures, even official reports suggest that

many people were quarantined against their will. The heavy reliance on quarantine raises a question—will anti-SARS measures

worsen the human rights situation in China? Again, the question

is not unique to China, even the United States is debating whether

it is necessary to apply a dictatorial approach to confront health

risks more effectively.

While China’s law on prevention and treatment of the infectious

disease does not explicate that quarantines apply to SARS epidemic, articles 24 and 25 in the law authorize local governments

to take emergency measures that may compromise personal freedom or liberties. The problem is that, unlike democracies, China in

applying these measures tended to exclude the input of civil associations or civil societies. Without engaged civil society groups to

serve as a source of discipline and information for government

agencies, the state’s capability is often used against the society’s interest. Official reports suggested that innocent people were arrested simply because they relayed some SARS-related information

to their friends or colleagues. According to the Ministry of Public

Security, since April, public security departments have investigated

107 cases in which people used Internet and cell phones to spread

so-called ‘‘rumors.’’

Another problem that may complicate the government’s efforts to

combat SARS is policy difference and political conflicts within the

top leadership. The reliance on performance for legitimacy places

the government in a policy dilemma. If it fails to place the disease

under control and allows it to run rampant, it could become the

event that destroys the Party’s assertions that it improves the lives

of the people. But if the top priority is on health, economic issues

will be moved down a notch, which may lead to more unemployment and more social and political instability. The disagreement on

8

how to deal with the relationship was evidenced in the lack of consistency in central policy.

On April 17, the Politburo Standing Committee meeting focused

on SARS and gave priority to people’s health and life security.

Eleven days later, the Politburo meeting emphasized former President Jiang Zemin’s ‘‘Three Represents’’ and called for a balance between combating SARS and economic work, reaffirming the central

status of economic development. This schizophrenic nature of central policy is going to cause at least two problems that will not help

the state to boost its capacity to combat SARS.

First, the Party center’s failure to signal its real current priorities loud and clear may confuse local authorities, which may take

advantage of the policy inconsistency to ‘‘shirk’’ or minimize their

workload. Second, the policy difference could aggravate China’s faction-ridden politics, which in turn may reduce central leaders’ autonomy in fighting against SARS.

In fact, former President Jiang’s allies in the Politburo Standing

Committee were quite slow to respond to the anti-SARS campaign

embarked upon by President Hu Jintao and Premier Wen Jiabao

on April 20. The making of big news in the official media—President Jiang’s order on April 28 to mobilize military health personnel

suggests that Hu Jintao and Wen Jiabao do not have authority

over the military. Intra-party rivalry in handling the crisis reminds

people of the political upheavals in 1989, when the leaders disagreed on how to handle the protests and Deng Xiaoping, the paramount leader, played the game between his top associates before

finally siding with the conservatives by launching a military crackdown.

Given the international implications of China’s public health, it

is in the U.S. interest to expand cooperation with China in areas

of information exchange, research, personnel training, and improvement of the country’s public health facilities. But it can do

more. It can modify its human rights policy so that it accords higher and clearer priority to health status in China. Meanwhile, it

should send a clearer signal to the Chinese leadership that the

United States supports reform-minded leaders in the forefront of

fighting SARS.

To the extent that regime change is something that the United

States would like to see happen in China, it is not in the U.S. interest to see Hu Jintao and Wen Jiabao purged and replaced by a

less-open and less-human government, even though that government may still have strong interests in maintaining a healthy U.S.-

China relationship. The United States simply should not miss this

unique opportunity to help create a healthier China. By calling

President Hu in April, praising what Beijing was doing, and indicating his willingness to provide any possible support and assistance, President Bush has taken a very important step in the right

direction.

[The prepared statement of Mr. Huang appears in the appendix.]

Mr. FOARDE. Dr. Huang, thank you very much.

We would now like to go on and welcome an old friend of both

the individual members of the Commission and all of us on the

Commission staff, Dr. Bates Gill.

9

Bates currently holds the Freeman Chair in China Studies at the

Center for Strategic and International Studies here in Washington,

DC. A specialist in east Asian foreign policy and politics, Bates’ research has focused primarily on northeast Asian political security

and military technical issues, especially with regard to China.

Among his current projects, he is focusing on the domestic socioeconomic challenges in China, including issues related to HIV/AIDS

and SARS. Results from this work have appeared in such publications as Foreign Affairs, the New York Times, and the Far Eastern

Economic Review.

Bates, welcome. Thank you very much for spending some time

with us this afternoon.

STATEMENT OF BATES GILL, FREEMAN CHAIR IN CHINA

STUDIES, CENTER FOR STRATEGIC AND INTERNATIONAL

STUDIES, WASHINGTON, DC

Mr. GILL. Thank you very much. And thanks to everyone here at

the Commission for the opportunity to appear before you today on

this very timely, and I think important, topic.

As we all know, the repercussions of China and the SARS epidemic will resonate well beyond tragic, unfortunate, and growing

loss of life. There is a silver lining here in some sense. I think the

progression of the epidemic from Guangdong to Beijing, into the

Chinese countryside, and across the world, clearly demonstrates

the mainland’s increasing economic and social openness, its mobility internally, and interdependence within the country itself, interdependence within the East Asia region, and across the planet. We

also see a coming out of this a mobilization a concern for China’s

healthcare system, both internally, and internationally. We can

hope that this will spark a greater degree of openness and accountability within the Chinese leadership.

I agree with Dr. Henderson that there is still much we do not

know, and we are at a very early stage in our analysis. But I think

it is worth thinking about some of these questions and trying to get

a better grasp of where the SARS epidemic is going to be taking

us in terms of some of these questions of openness and change in

China. On the other hand, we see that the SARS outbreak exposes

a number of very troubling developments as well: old-style misinformation, opaque miscommunication, the ailing healthcare infrastructure, and a continuing reticence, by and large, to work openly

with foreign partners. So these negative developments also raise

serious questions about the Chinese ability to cope with other infectious diseases, such as hepatitis, tuberculosis, and HIV/AIDS.

I would like to present my remarks today in three parts. First,

to talk a little bit about what I see as some of the lessons. Second,

what some of the implications are, in the near term, of the SARS

epidemic. And then recommend steps that we might consider to

combat future healthcare crises in China more effectively. I will

note at the outset that I am drawing these remarks largely from

my recent publications, such as in the ‘‘International Herald Tribune’’ and the ‘‘Far Eastern Economic Review.’’ And if I may, I will

submit these for the record as well.

[The above-mentioned publications appear in the appendix.]

10

Lessons. Clearly, first of all, we unfortunately saw, yet again, a

rather sclerotic and reactive political and bureaucratic process in

China. In taking so long to reveal the real dimensions of the SARS

problem, the Chinese authorities unfortunately underscored their

reputation as secretive and often out of step with international

practice. Unfortunately, it wasn’t just a question of bad communication, but we saw that there was deliberate misinformation, and

even obstruction of information in the case of U.N. assessment

teams attempting to understand the full extent of the epidemic.

Some have argued that this current openness though, more recently, to SARS, indicates a new and more positive direction for the

Chinese leadership. That may be, and we can hope so. But, I think

it remains relatively early to know with any certainty, and whether

or not this can be broadened to encompass a new, across-the-board

approach that doesn’t include just healthcare issues, but broader

issues of the Chinese social and political development.

I think it is unfortunate and paradoxical that despite what I see

as a rather sclerotic and old-style official response to SARS, China’s society has become more open than ever. Indeed SARS spread

as rapidly as it did precisely because of China’s expansive interaction domestically and with its international partners. So something, obviously, is going to have to change in the way Beijing

approaches these questions. I think the next 90 days or so are

going to tell us a great deal, and I would urge the Commission to

keep an eye—as this outbreak subsides somewhat—on whether or

not we do see continued focused attention, resources, and opening

for China in dealing with other, not only social and health issues,

but its lengthening lists of socioeconomic challenges.

Another lesson, obviously, that we take away from this is something we’ve known, but I don’t think has reached international

attention, and that is the ailing healthcare capacity, which Dr.

Henderson has already informed us about. This is a very serious

problem, and one I think which does offer numerous opportunities

for both non-governmental organizations and governments to work

with China to help expand healthcare capacity in China.

Third, another lesson to mention is somewhat disturbing to me,

as we have seen it in the HIV/AIDS case as well, and that is the

unwillingness of authorities in China, and particularly outside of

the healthcare set of ministries and especially at the local levels,

to work with foreign partners who are seeking to assist in

healthcare capacity building and other healthcare issues in China.

Again, I think this may be an opportunity for us to help build the

capacities of those local and grassroot organizations that can help

bridge the gap between foreign providers of assistance and local

authorities.

Second, let me turn to some near-term implications, again, understanding that we don’t know the full extent of this problem yet.

I am somewhat disturbed that the official Chinese response to

SARS in the early stages does not bode well for how the government is going to respond to other new, and, in my view, even more

serious public health challenges which the country is facing. I cite

particularly in this regard, the problem of HIV/AIDS, where I think

we see a good number of similarities between the response to SARS

and the response to that disease, meaning denial, reluctant acVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
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knowledgment and hesitant mobilization of resources, and reticence

to deal with the international community.

Other looming epidemics are out there, and—as we can see as

China globalizes—do pose problems for its partners, and we should

watch carefully how China responds and whether or not there can

be other forms of boosted assistance. Such as problems of other

types of atypical pneumonias, hepatitis, and HIV/AIDS are spreading in China and do pose issues not only inside China, but internationally.

Another obvious near-term implication is the economic downturn

for China. This is not directly a healthcare-related issue, but it

does have an impact on the international economy, something that

concerns us all, especially at a time that we are teetering on the

brink of an international recession. When we hear figures of China’s SARS related downturn of its GDP perhaps going down as

much as 2 percent, that is going to have an enormous impact on

the global economy. Even if China is able to ride through some of

the economic implications of the SARS outbreak, many of its major

partners are suffering as well, economically, such as Singapore,

Hong Kong, and Taiwan, and that, in turn, will affect the viability

of the Chinese economy going forward as well.

Let me conclude, by just looking ahead. As I have said already,

we need to watch very carefully how China in the next 60 to 90

days chooses to deal with other public healthcare challenges once

the SARS issue seems to be diminished somewhat, or at least off

the day-to-day front-page headlines. We should be watching for a

continued denial and inaction short of international outcry or senior-leadership intervention. We have already been made aware of

the weakening public-healthcare capacity to monitor, diagnose, prevent, and treat emergent disease outbreaks in China—the capacity

problem is really enormous—and continued reluctance to collaborate effectively with foreign partners.

Our first priority must be to implement more transparent, accurate, and coordinated public healthcare management and communication. In this regard, I believe healthcare-related quasi- and

non-governmental organizations could be more effectively utilized

to monitor and improve methods for the prevention, treatment, and

care of disease. For these to succeed, China’s new leadership must

commit to raising the political priority of public health on their

agenda of socioeconomic challenges as Dr. Huang has already mentioned.

Second is the capacity problem. At a very fundamental and basic

level, far more will need to be done to develop more well-trained

professionals who can properly diagnose, treat, and care for persons

afflicted with emergent epidemics in China. And again, I see a role

for grassroots and community-based organizations that could be

effective partners in this effort, if well coordinated and if given adequate leeway and resources internally.

Last, much more can be done between China and the international public health community. They have a shared interest in

scaling up cooperative programs. There are numerous international

healthcare related programs in China, but most of them are run on

a very small scale at a pilot level. And one of the problems of scaling

them up again on local levels is precisely the political one, espeVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
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cially if they are operated by NGOs or dominated by foreign donors. The central authorities or even provincial authorities are

more reluctant to see those programs expanded to a larger scale for

political reasons.

But obviously, major donor nations need to reconsider channeling

development aid to focus even more on public health programs in

China. In the end China needs to know that as one of the worlds

largest economies and as an inspiring great power, it will need to

show a far greater commitment to working with international partners and taking its public health challenges much more seriously.

In this regard, I will just note that I was very encouraged to learn

that on a basis of a telephone call between Vice Premier and Minister of Health Wu Yi and Health and Human Services Secretary

Tommy Thompson, we have committed an additional one-half million dollars to help China in the near-term on the SARS issue, but

the types of assistance that are being provided—to provide for

training; to provide for capacity building and laboratories—is going

to have a far larger impact. If anything, I would encourage as one

of our recommendations coming out of this that our government devote even greater resources to China in this regard. Thank you

very much.

[The prepared statement of Mr. Gill appears in the appendix.]

Mr. FOARDE. Bates, thank you very much.

We are going to let our panelists catch their breath for a minute

while I make an administrative announcement or two. Our next

issues roundtable will be 3 weeks from today, on Monday, June 2,

here at 2:30 p.m. in this room, 2255. We will be sending out an announcement a bit later in the week about the topic and panelists.

We hope that you will put it on your calendar and will join us.

In addition, as one aspect of our topic today, we published last

week a staff paper on SARS and its relationship to the free flow

of information in China. Copies are available on the distribution

table outside. If they are all gone, you can find a copy of the paper

in both HTML and PDF format on the Commission’s Web site,

www.cecc.gov.

We have now turned to our question and answer session. As we

have in the past, we will give everyone here on the panel table

representing the commissioners of the CECC a chance to ask our

panelists questions for 5 minutes, and hear the answer. We will do

as many rounds as there is still interest and our panelists are still

holding up, or roughly 4 p.m., whichever comes first.

I would like to begin by asking Professor Henderson to elaborate

a little bit. At the end of your presentation you were talking about

the strengths and the weaknesses of China’s public health system.

I wondered if you would take another minute for the record to tell

us what you think the real strengths and weaknesses are and what

the relationship might be, or what the United States might do to

help strengthen the system?

Ms. HENDERSON. OK. Some of the strengths are derived from the

earlier system which did set up a public health infrastructure. As

many of you know, this system is a multi-tiered system with highlevel city hospitals developed and public health departments that

are under the national China CDC control down to districts and

counties, in the rural areas, townships, and the villages. In the

13

post-Mao era resources were shifted away from the countryside

where resources were mainly devoted under Mao Zedong. And that

is why it was one of the biggest successes of Mao, that he did what

almost no government has ever been able to do—focus resources in

rural areas, limit the development of high-technology medicine, and

limit contacts with the outside world. So, you didn’t see any fancy

machines imported into China during that whole time period. Nevertheless, this policy resulted in really letting the urban health infrastructure go.

So, the big shift after Mao was toward devoting resources into

catching up, modernizing medicine—science, technology, and medicine—as part of the foreign modernization programs. The strength,

though, is the infrastructure. If you think about it in comparison

to Africa and trying to put treatment programs into Africa, the contrast is still quite vivid. Being able to put treatment programs, prevention programs, health education programs into rural China is

not as possible now because the township level hospitals and public

health functions became quite weak in the post-Mao era. But, the

infrastructure exists. And what the Chinese have been working on

is re-instituting the strength of that rural township hospital and

public health department control over public health functions at

the very, very basic level. That wouldn’t be possible if they hadn’t

had the prior system. So that is a really big strength that can be

built on. I would say that everything that our government can do

to recognize that it is there, and that they have a program in place,

and to assist with that would be excellent.

The other strength is that there have been so many advances in

infectious disease control in China, many of which are ignored. As

people look at health statistics in, for example, hepatitis, almost 10

percent of Chinese have hepatitis B. Hepatitis C is also epidemic.

This is transmitted through sex and blood. The Chinese developed

a vaccine for hepatitis B. There is almost no vertical transmission

now because they were so successful in implementing that vaccination program. The problem is the blood supply and hospitals. Dirty

needles are a big source of transmission, still, of hepatitis. So, the

blood supply which was also implicated, of course, in HIV transmission is also something that has been a serious hazard in terms

of hepatitis. And that is the origin of most of the increase in the

epidemic.

So, if we say, ‘‘the Chinese, their system is defunct. And look,

hepatitis is out of control.’’ Well, yes and no. And I think that kind

of recognition of the strength of classic infectious disease work,

work on vaccinations and so on, is something that our government

should do and not accept more general and sometimes superficial

comments about the state of health in China. Health in China is

generally improving every year. If you look at morbidity and mortality rates, particularly mortality rates—if you look at infant mortality rates, the disparities between urban and rural areas on the

aggregate, at least, are decreasing.

Mr. FOARDE. I would recognize my partner in directing the excellent staff of the Commission, David Dorman, who represents Senator Chuck Hagel.

Mr. DORMAN. First of all I would like to thank each of our panelists today on behalf of all the commissioners for taking the time to

14

try to educate us on this very, very complex subject. I know the

commissioners themselves are extremely interested in this subject

and appreciate the time you have taken today to help us understand it.

One thing I would like, perhaps, Dr. Gill and Dr. Huang to address is helping us understand the issue of secrecy. What we have

seen written and heard discussed, on the one hand, suggests that

the Chinese reaction to the SARS crisis was somewhat reflexive, in

the sense that the initial reaction of secrecy is the only answer the

system could have given. There are others who look at this a little

bit differently and suggest that perhaps part of the problem was

a public health system that was not functioning fully. In other

words, if the Chinese leadership had had more information, perhaps they would have reacted differently. I am wondering if each

of you will comment on this. Do you feel the system itself, as it now

exists, could not have reacted differently, even if the public health

system was in some way more functional? I am recalling Dr. Henderson’s comments that even 20 years ago it may have been better

functioning than today? Could the current leadership have reacted

differently if they had better information?

Mr. GILL. I think it is both of those problems that you cited. It

is not one or the other. So, in combination, you have a synergy that

makes things a lot worse than they should be. Not only is the data

collection and surveillance and epidemiological capacity of the

country poor, especially in rural areas, but there is also the natural

reaction of bureaucrats everywhere that no news is good news, and

bad news you don’t expose if you don’t have to. And then you have

the overlay in China of potentially very serious consequences for

persons who reveal information that is considered secret or somehow classified. So, you really have a synergy of both.

To answer your question, though, that you asked in the second

portion, would things have been different if they had had greater

access to information? Yes, I think it would be. I mean, I think we

are looking at leaders in China today that have over time recognized the need to be responsive to society and to try and be more

open and try and be more accountable. I am not going to exaggerate any of this, but there is movement in that direction, and

that is all very positive. As the leadership recognizes that its legitimacy relies upon retaining an image for the people of being responsive and accountable to a degree, they need to be more so.

Thus, I suppose if there had been more information available, we

might have been able to expect a little bit more rapid response. But

there wasn’t. And on top of that, there is the secrecy and less-thanresponsive action. So, unfortunately, in China I think today still

and even after the SARS debacle, you have the worst of both

worlds: both a lack of information and a tendency toward secrecy.

Mr. FOARDE. Dr. Huang, I will give you about 2 minutes to say

a little, if you would.

Mr. HUANG. OK. I agree with Dr. Gill that the Chinese Government could act differently provided that there were some changes

in the Law of Prevention and Treatment of Infectious Disease, because that law, which was enacted in September 1988, had some

major loopholes. First, under the law, provincial governments are

allowed to publicize epidemics in a timely and accurate manner

15

only after being authorized by the Minister of Health. Second,

atypical pneumonia was not listed in the law as an infectious disease under surveillance. Therefore, local government officials legally were not accountable for the disease. It is true that the law

allows addition of new items to the list, but it does not specify the

procedures through which the new diseases can be added.

That being said I still believe that there are some deep-rooted

systemic problems in the Chinese political system. First, as I just

presented, China lacks the decentralized system of oversight that

we have here. And second, it is about the regime’s legitimacy. The

manipulation of data actually helps shore up the regime’s legitimacy. Third, this is about a political system that is very secretive.

In fact, according to China’s 1996 implementation on the State Secret Law of 1988, which handles public health-related information

and any such diseases should be classified as a state secret before

they are announced by the Ministry of Health or authorized by the

Ministry. In other words, until such time that the Ministry chooses

to make public information about the disease, any physicians or

journalists who report on such a disease would risk being prosecuted for leaking such secrets.

Mr. FOARDE. Very interesting point. I would like to go on now

and recognize Andrea Yaffe, who represents Senator Carl Levin, a

member of our Commission. Andrea.

Ms. YAFFE. Hi. I think Dr. Gill touched upon this issue regarding

the recent appointment of Vice Premier Wu Yi. I am wondering

whether some news reports are accurate and if you think she will

be a catalyst for more openness? What can the United States expect from her leadership? Do you agree with her appointment, and

how do you think she is going to handle that position? Any of the

speakers.

Mr. GILL. I take her appointment generally in a very positive

light. We’ve argued in other contexts that often for real action to

be undertaken in China, it requires a higher level of senior leadership attention. Madame Wu is a vice premier, and a woman of

great resources, political and otherwise, and who has a pretty

strong reputation in China, and importantly, internationally. So, I

think another silver lining in all of this is that we see appointed

to this very important post of Minister of Health a person who

brings to her position a great deal of clout, far greater politically

than her predecessor, Minister Zhang had. So, I think we can hope.

The pieces are being put in place for a more robust response from

China on its public health agenda, and I think Madame Wu will

be a very good partner to work with.

Mr. FOARDE. Does another panelist want to address that question?

Mr. HUANG. I think I could comment on Professor Henderson’s

remarks. I agree with Professor Henderson, actually. While pointing out the weakness of the health system in China, we should also

recognize the strengths of that system, that is, as Professor Henderson has said, the infrastructure, basically, is still there. It’s just

that they need money. They need to increase government financing

to help boost the capacity of China’s health system to deal with all

of these public health problems.

16

And also, as Professor Henderson pointed out, in terms of the

public health status in China, we have indicators of health status

like mortality rate, life expectancy, under five mortality rate, infant

mortality rate. In fact, there is no sign suggesting that there is a

measurable decline in China’s public health status in that regard.

And also I wanted to add that the government has already taken

some positive steps to improve the health system in China, including the rural health system. Actually, what I have found is that

they are trying to revitalize the Maoist health system by endorsing

officially the so-called, Cooperative Medical System, to ask officially

to put more emphasis on the countryside. These are all positive

signs that I think we should recognize.

Mr. FOARDE. Thank you. We’ve got about a minute. Andrea, do

you have another one?

Ms. YAFFE. I was also wondering—I think this was also briefly

touched on—with the clampdown on universities, with the

clampdown on all tourism, how long do you think it is going to take

for the economy to start getting revitalized? How long do you think

the quarantine can actually last?

Mr. GILL. I don’t think anyone can make a prediction on that.

What I really wanted to touch on in testimony was that we had a

session over at CSIS this morning and some responses were generated. So, maybe I can convey some of them. One is that some experts believe that before the data and epidemiological surveillance

in the countryside begins to kick in, we are seeing a little bit of

a slowdown in the daily prevalence, or at least of new cases. Some

experts believe that once we are able to pull data accurately from

the countryside, we will see an upswing.

There is even evidence that SARS does not affect children in a

strong way, but they can remain carriers, so that they can infect

others who would fall ill to it. So, there is a lot that just isn’t

known. If we are going to go by the World Health Organization’s

[WHO] standards of when we can go back to the country or feel

safe to go back to China, it will be a very, very long time. They

have very rigorous standards for when these advisories can be

pulled. And with 5,600 Chinese infected and counting, it is going

to be a lengthy period of time. I mean I think we should certainly

be thinking in terms of several months, if not much longer. I don’t

think anyone is really ready to make a very accurate prediction because we just don’t know.

Mr. FOARDE. And you are out of time. So, we will go on and try

to find out something else. I now recognize our friend and colleague, Tiffany McCullen, who represents Under Secretary of Commerce Grant Aldonas, one of our Commission members.

Ms. MCCULLEN. Thank you, John. And I would like to also thank

the panelists for their thoughtful remarks earlier. I would like to

go back to some of the comments that Dr. Gill touched on as you

were closing out your remarks. You were talking about the economic downturn. I was wondering if you would elaborate on that

a little bit further and maybe if you have any information on investment, how you feel SARS may affect foreign investment in

China, and please open it up to the other panelists also? Thank

you.

17

Mr. GILL. Well, obviously, the most hard hit sectors of the Chinese economy are going to be some of those that generate a good

amount of foreign exchange. Certainly tourism and service industries are going to be very heavily affected. To my knowledge, at

this point, however, the basic production base that makes China

the export platform to the world has not been affected in any serious way. So, it would seem that on the fundamentals China remains the same attractive place that an investor would have found

in China half a year ago. So, I don’t think that is affected.

Now, what is funny and what is not measurable, is the issue of

confidence. Whether or not you feel, as investors, beyond the fundamentals that your gut instincts are right in investing in a country like this for fear that you might lose some of your investment

owing to the spread of this epidemic. At this stage of the SARS epidemic, again, without knowing the full extent of whether we are

going to see a resurgence in the winter, the numbers, as a part of

the overall Chinese population and economy, are still relatively

small. And I think it is largely a perception in our gut understanding as outsiders that has led to this downturn.

I would suppose that if things could be brought under control

and some of the higher numbers could be diminished, or if the

WHO advisory could be lifted before the end of this year, potentially, or early next year, I would only see this as a near term economic hit for China. But all of that is very speculative, because we

just don’t know. I hope my other panelists will be able to join me

on this.

Mr. FOARDE. With the understanding that none of you is an economist, and not Alan Greenspan either, you can say what you think,

please.

Ms. HENDERSON. I want to reinforce the idea about how little we

know. There is no simple diagnostic test. We have some numbers

for probable cases out of China. We don’t know if those are true.

We don’t know if they are high. We don’t know if they are low. But,

what I want to point to is the ability of infectious disease to strike

terror in the heart of every human. The kinds of things that we

want to worry about are the stigma and the discrimination, and

the unthinking application of categories of diagnosis before they

are ready, of actions—not so much taken by the Chinese Government, as simply perpetuated in the media and fear mongering. I

think we need to be really careful about that. And that is not just

SARS. That is emerging pathogens. And, of course, this is not our

last emerging pathogen. They have been increasing in the last few

decades, in the world. So, I think the whole global community

needs to take a look at how we present these things and try to introduce more thoughtfulness. But, basically, we just don’t know

right now.

Mr. HUANG. I will just be very quick. There is no doubt that the

SARS epidemic is going to hurt China’s economy. There are concerns that the epidemic is going to wipe out economic growth in the

second quarter, and possibly reduce the growth rate for the entire

year to about 6 percent, which is well below the level that the government says is required to serve the millions of new workers who

need jobs. In the meantime, this is not necessarily a bad thing, considering that the economy for the first quarter was about 9.9 perVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
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cent, which some economists believe is overheating. So, that is not

necessarily a bad thing, because the fundamentals are still there.

Mr. FOARDE. I would recognize our colleague Susan O’Sullivan,

who represents Assistant Secretary of State for Democracy, Human

Rights, and Labor, Lorne Craner. Susan.

Ms. O’SULLIVAN. Thank you, John. I would like to return a little

bit to a question that was touched on earlier, and that is the disparity in numbers of cases in major Chinese cities. I am reading

State Department reporting on—I think we are reporting seven

cases in Shanghai, for instance, and hundreds in other cities, like

Beijing. I am wondering if there is some explanation in the way the

disease spreads, or do we have to assume because Shanghai is a

major financial center, that there is still some degree of suppressing the numbers? It strikes me as odd every time I see these

big differences in numbers.

Ms. HENDERSON. This seems a little bit of a broken record, but

I don’t think we know why it has spread, because the risk factors

which predict the spread of this disease are still not really clear.

It has been reported in major cities throughout the world. It has

been reported less in rural areas, but whether there is something

about being in a city, as opposed to being somewhere else, which

is conducive to the spread is not totally clear.

There must be something about the migration patterns of particular people from Guangdong to Beijing. In my view it is more

luck that Shanghai doesn’t have a lot of reported probable cases.

Mr. HUANG. I agree with Professor Henderson that it is pure

luck that largely accounts for the low incidence rate of SARS in

Shanghai. But, the Shanghai Government and the Chinese Government as well, also provided another version of the explanation.

That is the Shanghai Government capacity is higher than other

local governments. The official media features a story that when

the Shanghai Government located a SARS patient, within 6 hours

they had found and quarantined 100 people with whom the patient

had direct and indirect contact. That is quite efficient, if that is

true.

Mr. FOARDE. I would recognize our colleague, Susan Weld, who

is general counsel of the Commission.

Ms. WELD. Thank you, John. I am thinking about the problem

of information in a large healthcare system such as China has to

have. And the first thing you mentioned, Professor Huang, is the

law that makes communicable disease a state secret. I’ve been wondering whether one way of rebuilding external and internal confidence in the state will be to change that law. I wonder if that

would solve the problem. But, I am also thinking about professional

ethics and doctors and public health practitioners in China. Is

there any sense of professional ethics that would require them to

publish or to speak out on issues like SARS? I know there has been

really courageous action by the doctor in the military hospital in

Beijing, but can you tell me more about that? Not just you, Professor Huang, but also Gail and Bates.

Mr. HUANG. Well, in terms of the changes in the law, so far we

haven’t found any indication that the government is willing to consider changing the State Secret Law, and also its implementing

regulation with regard to the handling of public health-related inVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
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formation. Technically, they could do this very swiftly. They acted

very fast by adding SARS as a disease under surveillance under

the Law of Prevention and Treatment of Infectious Disease. They

could act in a similar manner. It’s just that we haven’t seen any

discussions in that regard.

Also, in terms of professional ethics, I think that many—actually,

in the Guangdong case, evidence suggests that many physicians

were informed about this disease before January 31, the Chinese

New Year. Apparently few people there spoke out. This, again, is

probably because of the State Secret Law, which prohibits people

from speaking out, because they will risk being persecuted by the

government. But fortunately, we have Dr. Jiang who spoke out. In

that regard, I don’t have much information to share with the Commission.

Ms. HENDERSON. I think a lot of the weaknesses of the system

don’t need my reiterating, and I don’t disagree with them. But, I

would say that there is probably some important reasons that there

needs to be central control for the announcement of a major new

epidemic. So, while I share the concerns, perhaps, that this kind

of control might lead to suppressing information, at the same time,

I don’t think that the U.S. local public health departments can

willy nilly announce a new epidemic without some kind of OK from

the Centers for Disease Control and Prevention [CDC] as well.

Epidemics introduce new kinds of issues that I think abrogate

some of our normal feelings about human rights.

Second, in terms of the professional ethics, sometimes it’s reported in the press and other places that physicians and scientists

in China never feel free to report any real statistics. For example,

sexually transmitted diseases, which have been epidemic during

the 1990s and into this era. The initial reports on those were very

hesitant in the medical literature. People might participate in studies, but not want their names on papers, because they were a little

unsure that it would be the right thing to do for them in their careers in China. So that is real.

At the same time, I feel that—particularly with the advent of a

lot of international collaboration—there has been a real change

among professionals in China in both the medical and the scientific

communities. I’ve seen that myself, personally, over the years with

all my work in healthcare. Now I spend a lot of time at the China

CDC and the new AIDS Center. I just think it is a different world

now. It would be great if I could say to you, ‘‘Here are the structures and the avenues by which people are able to do this.’’ I’m not

sure I can recount that. What I can do is look back in history and

say, ‘‘You thought that there was nothing going on about HIV, but

there was. And here it was in the biomedical literature. The transfusion medicine literature was full of it way before the New York

Times found out.’’ Mr. FOARDE. Bates, did you want to take a crack at that?

Mr. GILL. I have one very quick comment. And that is that laws

on the books are great, but obviously, they don’t make any difference if they are not enforced or if the population doesn’t believe

that they will get equal treatment under that law. So, even if they

change the law to allow for some sort of more open reporting mechanism, will a lot of people feel confident enough to operate under

20

it in China? That’s the whole issue we are examining here: the extent of the scope of rule of law in China.

Just one other comment I wanted to add to this so let me stop

there. I know we are short of time, but thank you.

Mr. FOARDE. Let me go on and try to begin to tie all of this together with an overall question. You have all sort of alluded to the

answer, but I would like you each to comment on it more specifically. In the last couple of weeks, we have heard some observers

in the United States suggest that the SARS crisis may be, or already is, or may become, China’s Chernobyl. The theory being that

the Chernobyl disaster was the first in a set of events that ended

up with the collapse of the former Soviet Union. What are your

thoughts on the impact of this SARS development on the possibilities for political change in China? We can start with Dr. Huang if

you would like to step up to that question.

Mr. HUANG. This analogy of China’s Chernobyl is very appealing,

but I think it flies in the face of reality. First, we should realize

that, in terms of the economy, China’s economic situation is much

better than Mr. Gorbachev had in the former Soviet Union. China’s

economic growth is very strong and it is probably the fastest growing economy in the world. It is a bright spot in the global economy

with all that global recession going on. Second, we haven’t seen any

apparent split in the Chinese leadership. There might be some policy differences, power struggles, but as President Jiang used to say,

‘‘We are all in the same boat.’’ So, they may eventually compromise

and still muddle through the crisis. I will leave it to the other two

panelists to comment.

Ms. HENDERSON. At that time, one of the things about Russia

was not only that its economy was nose-diving, but also its actual

health indicators. Life expectancy was declining. It was hard to believe that the statistics were right. Life expectancy had gone from

70 years or above down to, now, below 60 for men. So much was

wrong with that system then and also now, that I think it is just

not comparable. There is a lot of strength now in the Chinese system.

The way I see this is that this event mobilizes a lot of forces that

have already been at play in China during the 1990s. Both panelists brought up correctly that the public health system was the

‘‘low person on the totem pole’’ for many years. And now they are

going to be boosted up, and they are going to be implementing

things and getting assistance for things that they have been working on but have been under-funded. So, I see this as a wonderful

transition opportunity as opposed to a revolutionary event.

Mr. GILL. I would agree with both of my fellow panelists. I think

the Chernobyl analogy is overdrawn. It may be a kind of

Chernobyl-like transformation of the healthcare sector. That is to

say we will see some important changes there, probably a real devotion of new resources, certainly in the near term. If Madame Wu

Yi stays there, I would assume that she will see to it that she is

able to bring her political clout to bear on improving matters, but

does this mean a political transformation of the Chinese body politic? No. I don’t think it does.

Another important thing to consider, and it is similar to lots of

other socio-economic ills in China, is that there are pockets of some

21

unrest and unhappiness and disgruntlement here and there, and

sometimes it does rise up to localized violence in places, but there

is no indication that there is going to be a systemic uprising of any

kind as a result of SARS. The one comment that I wanted to make

before, that I recall now is that maybe SARS will make a demonstrable case for those who argue that greater openness is not a bad

thing, and it is good to have laws that make sense and are enforceable and are known to the people, what their rights are and aren’t,

that gives people a greater confidence to speak out when they think

they can. Those who want to advocate that sort of approach in

China can certainly look at the SARS case and say, ‘‘Look at what

happens when we don’t have this openness.’’ Again, I don’t see that

as becoming system-wide, taking on board of that kind of approach,

but rather in certain cases where it can be demonstratively shown,

like in epidemics, for example.

Ms. HENDERSON. Could I just add one thing real quick?

Mr. FOARDE. You’ve got plenty of time.

Ms. HENDERSON. If we think about HIV versus SARS, one of the

things about HIV is that even when it moved into the provinces because of the infection of commercial plasma donors, even then, the

Chinese are still able to think of it as a disease that is not going

to affect them in a major way. SARS is different. This is really different. Healthcare workers are affected first; people in cities; people

who are near the centers of power. I think for public health it is

a disaster, but it is also an opportunity to lobby.

Mr. FOARDE. Very useful. Let me ask Dave Dorman if you have

another question for the panel?

Mr. DORMAN. Thanks, John. We touched upon several times the

fact that the basic pieces of the preventative and curative

healthcare structure are in place. I think some of you suggested

that, perhaps, the SARS crisis may lead to some change in political

commitment, and through it, an increase in the inflow of cash into

that structure. What other factors for improvement should we be

looking for? For instance, in terms of managing a very large health

structure like this, are there presently sufficient numbers of experts and technicians in China to make it happen? And are there

other factors that we haven’t talked about yet? Is political commitment from the leadership and an influx of cash enough? Or are

there other pieces that we should be looking for as we review what

happens in the next 12 months or so?

Mr. HUANG. I think I can answer that question. I think that such

a commitment is important. More healthcare financing is also important. But, it is equally important to strengthen the bureaucratic

capacity in managing China’s health system. What we have found

here is actually two problems. First the lack of coordination between different bureaucratic organizations. We have evidence that

suggests—in 1993, for example, the Minister of Health wanted to

strengthen rural healthcare by promoting a primary healthcare

and assigning targets that were to be fulfilled by local government

officials. But they had the Ministry of Agriculture step in and say,

‘‘No, we are going to eliminate these items, because they are going

to increase the peasant burden.’’ So, you can see this lack of coordination between different bureaucratic organizations.

22

And so is the case in the recent SARS outbreak. What we have

found here is lack of coordination between the central ministries

and the local governments. A good example is the Ministry of

Health in Beijing actually learned about what was happening in

Beijing in March and they wanted to do something, but Beijing city

authorities basically didn’t want to have involvement from the Ministry of Health. They said, ‘‘We can handle it.’’ So, this is another

example of coordination between different bureaucratic organizations.

The second problem is the lack of regulatory ability. Unlike the

United States, China doesn’t have a very strong, very capable Food

and Drug Administration [FDA] that regulates foods and pharmaceuticals. Officially they have this pharmaceutical administrative

bureau, but that is the one that doesn’t have the teeth. The State

Council wants to expand the functions of the State Pharmaceutical

Bureau to make it China’s FDA, but they haven’t specified what

they are going to do to make it really happen.

Ms. HENDERSON. I am not a political scientist, so I am not going

to talk about the lack of coordination between the different ministries and the top and the bottom. I would comment, however, on

the scientific and technical personnel, which are in short supply,

but incredibly talented, and that is the bottom line. There are not

enough people, the people are remarkably overburdened at the top.

They are talented, dedicated professionals but they are in short

supply. But, checking the blood supply, which is one of the major

reasons there is such big HIV epidemic they knew what to do, and

they have been working on it, but there are a certain number of

things that they couldn’t do because the tests are too expensive in

Xinjiang Province. Because a cheap one isn’t sensitive, isn’t specific, there are a lot of missed cases, but they can’t afford the expensive ones. And it is that level of difficulty with resources that

is very nuts and bolts. So more trained people and devoting a lot

of resources technically to the capacity to do testing, surveillance,

making the system really work. It is expensive.

Mr. GILL. Let’s not forget we are talking about 800 to 900 million

people who live in remote, often very backward parts of China. It

strikes me that—especially on the HIV/AIDS side of things—this is

not going to get taken care of through a formalistic, overarching,

top-down, massive public healthcare system. It is not going to happen. They are going to have to come up with some ways of managing, especially in these very far and remote areas through some

sort of localized, even family-based forms of treatment and care.

Mostly care, unfortunately, because you are not going to have

qualified persons. And then the talented ones get out and go to

where the money is in the system. So, to the degree that your question is asking how are we going to manage this at this very low

grassroot levels, where the vast, vast majority of the Chinese population lives, that is going to be very, very difficult. I think it is

going to have to require some more innovation and a little bit more

loosening of the strings, if you will, to come up with more localized,

community-based, even family-based answers. As Dr. Henderson

said, the problem is just enormous. And the challenge is extremely

expensive.

23

Just as another aside, how about delivery of drugs to the patient? Let’s say you did have all of the drugs you wanted. How are

you going to get it to the point of care in a place like China? It’s

a huge problem, especially in the countryside.

Mr. FOARDE. Susan Weld.

Ms. WELD. Yes. That just makes me think of the possibilities

that NGOs could undertake in different parts of China, and maybe

in some of the more remote parts. If the laws were reformed to

make NGOs easier to establish, then they could provide some of

this difficult work or treatment and care for the people who are living with AIDS and the people living with the after effects of SARS.

Does anybody think that this will happen? Is that something which

is a hopeful way of dealing with the after effects of this disease and

other diseases like it?

Ms. HENDERSON. Well, there are a lot of NGOs and international

aid organizations already working on these things in different ways

in China. I think there is a pretty good coordination. Everybody

knows what the others are doing. I would like to say that in the

last year the Chinese Government has stepped up to this responsibility, and said that 100 counties that are hardest hit with HIV/

AIDS will have treatment programs there.

NIH and AIDS clinical trial groups—the units that have been

working on research and treatment in many medical centers across

the United States—have also been to China, mobilizing to set up

centers there to institute treatment programs. You really do need

to learn to treat. You need to follow people. But at the same time,

there is a demand from the local areas to get the training; on how

to carry out treatment. I’ve seen that in meetings in China last

year. So, there is a political will in the local areas and some help

from outside, and now especially from the central government, to

fund it.

I don’t want to be too rosy. There is funding and then somebody

goes, ‘‘Oh yeah, but we need to think about how much a monitoring

test will cost.’’ So it is difficult to find the money for every little

incremental bit.

Ms. WELD. I guess I am thinking of the connection between one

problem or SARS and the possibility that civil society will develop

using NGOs if you want to call them that, or social organizations,

‘‘shehui tuanti,’’ that level of development and capacity-building.

The hope would be that, instead of having to find outside money

to put in in the future these kinds of organizations will be self-sustaining on the local or national level.

Ms. HENDERSON. I have only seen a few NGOs that deal with

AIDS. Unfortunately, I think they find that they encounter a lot of

resistance. There is a lot of stigma. There is a lot of difficulty in

talking about some of the risk factors for AIDS, until very recently,

in highly stigmatized groups. So, I haven’t seen that as being an

avenue. I’m sorry to say that I haven’t.

Mr. GILL. Anything that comes close to what we might call an

NGO in China is a relatively small operation and certainly doesn’t

have the capacity to undertake nationwide programs. I think in the

near-term if we are going to look to quasi-governmental groups to

have a national impact, it would be the so-called social organizations that are government organized organizations. They are one or

24

two steps removed from the line ministries, but often have quite an

extensive reach down into the provincial, county, and even village

levels. Maybe they wouldn’t be treatment and care providers, but

they certainly could be effective in terms of preventive messaging

and awareness; transmission belts; passing information. Maybe

they could be empowered to a greater degree in the Chinese system, because they really are government organizations, even

though they do have authority connected to government ministries.

Maybe the way to go in the near term is to encourage a process

of empowering those sorts of organizations.

Mr. FOARDE. We are just about out of time for this afternoon. So,

if you would, I would ask each of the panelists to spend a couple

of minutes making a final statement if you have something to say.

If you don’t, that’s fine.

Ms. HENDERSON. Thank you. Now, of course, I don’t want to repeat the earlier things I’ve said. There are a lot of strengths and

weaknesses. The strengths come from earlier era, and also from

most recent developments, partly as a result of international collaborations, in China opening up in great ways to the rest of the

world. Weaknesses have to do with the economic reforms and the

destruction of a lot of public health programs.

I think the main thing I want to say is that this is an unprecedented event, certainly in our recent history. I think it is shortsighted to come down too hard on the way the Chinese have dealt

with this crisis. I am not sure how our country would have dealt

with it had we actually had an epidemic here. We don’t know

whether we did or not since we don’t know if we had cases.

I think this is an opportunity for the system to reform, to learn

important lessons, lessons that can’t be ignored, that they ignored,

unfortunately, with AIDS. This was because they could tuck it into

Xinjiang, tuck it in Yunnan, blame the drug users and so on, and

not really confront the weaknesses in the system to treat. Plus, the

world changed with regard to treatment for AIDS patients in the

year 2000 with the Durban Conference. So, now we think people

with HIV have a right to treatment. That was not part of the world

view before 2000.

So, there is a lot that has changed dramatically. But, I also think

that in our media and in our response to China, we have an opportunity now to be supportive and nonjudgmental. I would advocate

for that approach because this is an extraordinary challenge to any

system. Even a system that functions perfectly and has all bureaucracies talking to each other and so on. It’s just unprecedented.

I would advocate that we be humble, because we have a lot of problems ourselves. We haven’t done so well with infectious epidemics.

I know that sounds a little like seeing it through rose-colored glasses. But I think that this approach could get results from the Chinese Government.

Mr. HUANG. I would like to talk a little bit about the importance

of international actors in setting an agenda for the Chinese Government. The recent agenda shift, to a large extent, was caused by

the strong international pressures exerted by the international

media, the international organizations like WHO, and foreign governments. And there is an indication that the Internet is increasVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 88399.TXT China1 PsN: China1
25

ingly used by the new leadership to solicit policy feedback, collect

public opinions, and mobilize political support.

In fact, it is very likely that Hu Jintao and Wen Jiabao, who are

both Internet users made use of international information in making decisions on SARS. In other words, external pressures can be

very influential, because Chinese Government leaders are aware of

the weakness of the existing system, and have incentives to seek

political resources beyond the system.

Mr. GILL. Just two quick points here. I think we are at a very

interesting window of opportunity. It is too early yet to quite determine just how far and fast we can move with China to bring about

and foster the kinds of changes we would like to see there. Not only

in terms of the public health system, but also in terms of openness,

transparency, and accountability. Opportunities like this don’t

come along very often. This is a huge issue inside China. It is

something that is not going to be quickly forgotten, and the leaders

are upright and at attention, and they are focusing on this like a

laser beam. This is an opportunity for us to speak with them frankly, forthrightly, about the issue as a public health problem, but also

more broadly as how it ripples out into the questions of socioeconomic change and transformation that the Commission is trying

to examine. I think this window is going to close before long. So,

I think it is a good opportunity to follow through with that.

Second, in that regard, I would encourage all of the Commission

members, to the extent you can to speak to your principals and

make sure that even though they may not be Secretary of Health

and Human Services Tommy Thompson, you can bring up public

health issues and question the social safety nets with your Chinese

counterparts. That is going to foster the kind of cross-bureaucratic

attention to this issue in China that is so badly needed. So, it is

not just health issues. I mean, if the Secretary of Commerce goes

over and speaks to his counterpart, and bullet point two—you know

right after WTO bullet point—is why the collapse in social safety

net in China is a threat to the world economy, that guy is going

to listen. He is going to find one of his people to start working on

this issue. Believe me.

So, we need to help the Chinese understand that this is not just

a healthcare issue, that we do need to help foster that cross-bureaucratic interagency process. It will happen if our principles are

going over there and raising these issues as something important

to the United States.

Mr. FOARDE. Thanks to all three of you for sharing these views

with us this afternoon. You are all extremely well-disciplined and

extremely articulate, and thanks very much for that.

I would remind you that our next session will be on Monday,

June 2, 2:30 p.m. in this room. The topic and panelists to be announced. I hope you will join us then.

With that, we will close this afternoon’s roundtable with thanks

to all who attended, to the staff that helped us put it on, and to

our three panelists. Good afternoon to everyone.

(27)

A P P E N D I X

28

1 J Horn, Away with All Pests: An English Surgeon in the People’s Republic of China (New

York: Monthly Review Press, 1969); GE Henderson, ‘‘Public Health in China,’’ in WA Joseph

(ed), China Briefing 1992 (Boulder: Westview Press, 1992). 2 V Sidel, Serve the People: Observations on Medicine in the People’s Republic of China (Boston: Beacon Press, 1974). 3MS Cohen, GE Henderson, P Aiello, Zheng HY, ‘‘Successful Eradication of Sexually Transmitted Diseases in the People’s Republic of China: Implications for the 21st Century,’’ Journal

of Infectious Disease 1996; 174 (Supplement 2): S223–230. 4WC Hsiao, ‘‘Transformation of Health Care in China,’’ New England Journal of Medicine

310:932–6, 1984; GE Henderson, ‘‘Issues in the Modernization of Medicine in China,’’ in D

Simon and M Goldman (ed) Science and Technology in Post-Mao China (Cambridge: Harvard

University Press, 1989); see also World Bank reports on China’s health sector (1984 and 1989).

PREPARED STATEMENTS

PREPARED STATEMENT OF GAIL E. HENDERSON

MAY 12, 2003

MYTHS AND REALITY: THE CONTEXT OF EMERGING PATHOGENS IN CHINA

America’s first images of China in the early 20th century were as the ‘‘sick man

of Asia.’’ 1 In 1948, the U.N. Relief Organization stated, ‘‘China presents perhaps the

greatest and most intractable public health problem of any nation in the world.’’ Two decades later, the dominant image of Mao’s China was one of healthy, redcheeked babies born to a nation that seemingly provided healthcare for all.2 The

real story is more complex than either of these images, but in a country as vast and

varied as China, many realities are true. The recent spread of HIV/AIDS and now

the SARS epidemic have placed enormous stress on the Chinese healthcare system,

as would be the case for any healthcare system. To effectively assist the Chinese

response to SARS, we must understand the forces that have shaped this system.

This requires a small excursion in history, past and recent, to revisit remarkable

achievements and the factors that have determined the current system’s strengths

and weaknesses.

What will the history tell us? (1) Public health, which includes disease surveillance, health education, environmental sanitation, nutrition and food hygiene, and

maternal and child health, is not a money-making operation. The trends in China’s

recent history demonstrate that public health agendas require strong government

support and resources; it is easier to accomplish them when market forces are held

at bay—or at least not in direct competition. (2) China’s current curative healthcare

system, of hospitals and clinics, has been shaped by economic incentives in the postMao era that have encouraged the development of hospital-based high technology

medical care. In concert with the move away from collective welfare and central administration, inequalities in access to services have increased. But the infrastructure remains and can be supported and strengthened by forces within and outside

of China. (3) Infectious diseases often strike hardest at the most vulnerable groups,

those with least access to governmental safety nets. This was true for HIV in

China—and in all nations—and the fear with SARS is that weaknesses in the rural

health system, particularly in remote areas, will make containing the disease much

more difficult. Newspaper reports about poor quality hospitals or farmers who cannot pay for needed medical care tell an important side of the story, but focus attention away from other critical components. (4) If we are to effectively assist China’s

response to SARS, we must understand the sensitivity for any government of double

threats to public health and the economy, and reject the accusatory rhetoric that

has characterized much of the editorializing of recent reports. Instead, we must recognize and build on the work of responsible, dedicated professionals in China and

the US, people who are best positioned to develop strategies to contain SARS and

prevent the emergence of other deadly pathogens.

Public health was probably Mao’s biggest triumph. Under his leadership (1949–

1976), China experienced the most successful large-scale health transition in human

history—a near doubling of life expectancy (from 35 to 68), the eradication of many

endemic and epidemic infectious diseases, including illicit drug use, prostitution and

sexually transmitted diseases,3 that resulted in a gradual shift in the leading causes

of death from infectious disease to chronic conditions.4 This was not accomplished

through great gains in per capita income, but rather by creating a closed socialist

political economy that exercised control over industry, agriculture, and migration;

redistributed income and wealth; and had the ability to set national and local priorVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00032 Fmt 6601 Sfmt 6621 88399.TXT China1 PsN: China1
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5 RJ Blendon, ‘‘Can China’s Health Care Be Transplanted Without China’s Economic Policies?’’ New England Journal of Medicine 300: 1453–58, 1979. 6GE Henderson et al., ‘‘Distribution of Medical Insurance in China,’’ Social Science and Medicine 41,8: 119–30. 7See appended tables from Zhongguo Weisheng Nianjian (China Health Yearbook) 2001 (Beijing: People’s Medical Publishing House, 2001) reporting 2000 mortality rates and leading

causes of death. See BM Popkin et al., ‘‘Trends in diet, nutritional status and diet-related noncommunicable diseases in China and India: The economic costs of the nutrition transition.’’ Nutrition Reviews 59: 379–90, 2001, demonstrating the decline in malnutrition across rural China

during the 1990s and rise in non-communicable disease. 8GE Henderson et al., ‘‘High Technology Medicine in China: The Case of Chronic Renal Failure and Hemodialysis,’’ New England Journal of Medicine 318,15:1000–4, 1988. 9 China 2020 series: Financing the Health Sector (Washington DC: World Bank, 1997)

10GE Henderson and TS Stroup, ‘‘Preventive Health Care in Zouping: Privatization and the

Public Good,’’ In A Walder (ed), Zouping in Transition: The Political Economy of Growth in a

North China County. (Cambridge: Harvard University, 1998) 11 China Health and Nutrition Survey (funded by NIH, NSF, Foundation, UNC, and Chinese

Academy of Preventive Medicine), conducted in 1989, 1991, 1993, 1997, and 2000.

ities in healthcare. By focusing on broad distribution of resources and reliance on

low-tech public health measures and ‘‘patriotic public health campaigns’’ that mobilized the population against environmental and behavioral risk factors, achievements were made in sanitation, maternal and child health, infectious disease

surveillance, and vaccination; and China’s three-tiered primary healthcare system

became the WHO model for developing countries.5 Most citizens had medical insurance through rural cooperative programs or urban workplace programs, although

the level of coverage, quality of services, and overall health status indicators were

never equivalent between rural and urban locations6

After Mao’s death, the market-oriented economic reforms of the 1980s and 1990s

transformed the nation once again. Incomes and productivity rose dramatically as

agriculture and then industry were de-collectivized, and there was a general loosening of administrative authority over lower level units. Living conditions, diet, and

health and nutrition outcomes all improved steadily.7 This was in contrast to the

Soviet Union where life expectancy actually declined, from 70 in 1986 to 64 in 1994,

and has continued to decline thereafter. Major investments were made in urban

medical services, long stagnant under Mao, as China turned to the West to help

modernize its hospitals, technology, pharmaceuticals, and medical research and

training; and these changes had a positive impact on health status as well.8 In part,

these were responses to the increase in chronic diseases, for which modern medicine

had developed expensive, intensive interventions—conditions like heart disease,

stroke, and cancer—which were all increasingly prevalent. In part, however, as

World Bank and Chinese public health researchers have clearly documented,9 the

economic reforms created irrational incentives for hospitals to emphasize new technology and drugs because, as the government funded a smaller and smaller proportion of hospital budgets, profits on their use provided much needed revenue. In some

cases, these reforms forced inefficient and poor quality hospitals to offer better services; in others, especially for the lowest level township hospitals in poorer rural

areas, they have produced failing hospitals with little to replace them.

Public heath programs that did not generate profits suffered under the transition

to a market-oriented system as well, with implications for health outcomes. For example, during the mid-1980s, funding for childhood immunizations in rural areas

declined, which produced an increase in childhood infectious diseases. The government response, with assistance from the UNICEF, reversed this trend. My own research in a Shandong county public health department in 1990,10 and surveys of

rural health services in eight provinces during the 1990s,11 document that collective

benefits and funding for public health varied with the wealth of the region, but the

hierarchy of medical and public health supervision continued to extend to clinics in

villages and county towns. The top-down mobilization style of health education and

prevention work was still effective against outbreaks of infectious diseases for which

standard protocols existed (such as epidemic hemorrhagic fever, or Hanta virus);

however, it was less capable of responding to new and more complex challenges such

as risk factors for chronic conditions like hypertension which were not routinely

screened. As many have observed, increased financial and administrative independence of local health institutions also undercut the ability of the central government

to mobilize public health activities. This was demonstrated by the national-provincial conflict over response to the HIV epidemic, especially in areas with HIV-infected

commercial plasma donors. This decentralization of authority and shift in concentration of resources from rural to urban areas, and from public health to curative medicine, has direct consequences for China’s response to the SARS epidemic.

30

12The World Bank reports the inequality index (Gini coefficient) for both countries in 1997

at about 40. Gini measures income distribution on a scale of 1–100. A rating of ‘‘1’’ would mean

that that income is perfectly equally distributed, with all people receiving exactly the same income; ‘‘100’’ would mean that one person receives all the income. European countries’ Gini coefficients ranged in the 20s and 30s; the highest were Brazil, South Africa, and Guatemala, at

around 60. 13Moreover, extent of inequality itself seems to be related to poorer healthcare access and out- comes. 14 Jun Gao et al., 2002, p. 22. 15Zhongguo Weisheng Nianjian (China Health Yearbook) 2001. (Beijing: People’s Medical Publishing House, 2001) The comparable US figures are not too dissimilar: in 1997, IMR for whites

was 6.0; for blacks it was 13.7, a greater than twofold difference (CDC NCHS website). 16Liu YL WC Hsiao, and K Eggleston., 1999, p 1350. 17 Jun Gao et al., 2002 p. 26. 18Liu Yuanli, WC Hsiao, and K Eggleston, ‘‘Equity in Health and Health Care: The Chinese

Experience,’’ Social Science and Medicine 49,10:1349–56, 1999; GE Henderson et al., ‘‘Trends in

Health Services Utilization in Eight Provinces of China, 1989–1993,’’ Social Science and Medicine 47,12:1957–71; Jun Gao et al., ‘‘Health Equity in Transition from Planned to Market Economy in China,’’ Health Policy and Planning 17 (Suppl 1):20–29, 2002. 19 Jun Gao et al., 2002, p. 26. 20GG Liu et al., ‘‘Equity in Health Care Access: Assessing the Urban Health Insurance Reform in China,’’ Social Science and Medicine 55,10:1779–94; G Bloom and Tang SL, ‘‘Rural

Health Prepayment Schemes in China: Toward a More Active Role for Government,’’ Social

Science and Medicine 48,7:951–60; G Carrin et al., ‘‘The Reform of the Rural Cooperative Medical System in the People’s Republic of China: Interim Experience in 14 Pilot Counties,’’ Social

Science and Medicine 48,7:961–72.

Two economic trends thus characterize China during the reform period: (1) increase in aggregate income levels, and (2) increase in disparities in income distribution (income inequality in China now equals that of the United States).12 In any

economic system, both trends are related—and in complex and sometimes contradictory ways—to health outcomes.13 On the one hand, increased income and wealth

produce improved health outcomes. China’s impressive gains in per capita income

in the post-Mao era, and especially in the last decade, are correlated with improvements in many health status indicators: during the 1990s, overall mortality rates

declined in both urban and rural areas;14 between 1991 and 2000, infant morality

dropped significantly, from 17.3 to 11.8 per 1000 live births per year in urban areas,

and from 58.0 to 37.7 in rural areas; and maternal mortality rates declined as well,

in rural areas between 1991 and 2000 from 100.0 to 69.6 per 100,000 women per

year, and in urban areas, from 46.3 to 29.3.

On the other hand, inequality in income distribution is linked to unequal access

to care and consequently to disparities in health status. Urban-rural health disparities are evident in the mortality figures cited above, although the gap is declining

for infant mortality.15 Such highly aggregated health status measures often mask

significant differences between geographic and sub-population income groups,16

however, and this is certainly true for China’s border and minority regions where

mortality rates are much higher. In addition to income and geographic location, the

strongest predictor of access to healthcare is having medical insurance. In urban

areas the percent with employment-based coverage declined between 1993 and 1998,

from 68.4 percent to 53.3 percent; but the rural insurance programs that depended

on the collective economy for funding collapsed almost entirely in the 1980s, and by

1998, only 8.8 percent of the rural population had coverage.17 Initially, because

medical care charges had been kept below cost through price controls, loss of insurance did not create widespread hardships. However, as medical services improved

and charges rose steeply during the 1990s, paying for medical care became increasingly burdensome to the poorest citizens.18 Data from surveys during the 1990s document a decline in rural, compared to urban, inpatient admissions.19 and anecdotal

reports suggest that many do not seek care due to the financial burden. During the

1990s, one of the most researched topics in healthcare in China was reform of

health insurance, and pilot insurance programs were initiated in a number of urban

and rural areas.20

In a developing country with 1.3 billion people, it is not surprising that remote

rural areas in China lack resources to respond to HIV or SARS. Yet, one positive

development appeared in 2002, prior to the SARS outbreak, to address these wellrecognized inequalities. A program to rebuild rural health infrastructure, based on

multi-ministerial coordination, was initiated. It includes: (1) reconstituting rural

cooperative insurance to cover 900 million farmers through a joint funding mechanism, with direct investment from central, provincial and local governments and

from the farmers themselves; and (2) re-establishing rural township public health

hospitals to implement and oversee public health activities at the township and village levels that had become ‘‘unfunded mandates’’ during the reform era. If impleVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00034 Fmt 6601 Sfmt 6621 88399.TXT China1 PsN: China1
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21Personal communication with Dr. Yiming Shao, Chinese Center for Disease Control and

Prevention 22LK Altman, ‘‘Lessons of AIDS, Applied to SARS,’’ New York Times May 6, 2003 D1 23 Ji Y, Qu D, Jia G, et al. ‘‘Study of HIV Antibody Screening for Blood Donors by a Pooling

Serum Method,’’ Vox Sang 1995, 9:255–6. Wu Zunyou et al., ‘‘HIV–1 infection in commercial

plasma donors in China,’’ The Lancet 1995 Jul 1;346(8966):61–2. Lancet is the premier British

Medical journal. This first report featured a mother and her two daughters who tested positive,

in the absence of any other risk factors except commercial blood donation, in rural Anhui Province, between February and March 1995. The authors state, ‘‘Notification of HIV–1 infection to

infected persons or their family members is not routinely done in China. Neither these infected

women nor their family members were informed of the infection because it was feared that they

would commit suicide if they discovered they were infected with HIV–1.’’ The authors recommended screening plasma products and donors, disclosing HIV status to infected individuals,

and introducing surveillance of plasma donors. Other articles about HIV in plasma donors include: Ji Y et al., ‘‘An Antibody Positive Plasma Donor Detected at the Early Stage of HIV Infection in China,’’ Transfusion Medicine 6,3:291–2, 1996; VR Nerurkar et al., ‘‘Complete Nef Gene

Sequence of HIV Type 1 Subtype B’’ from Professional Plasma Donors in the People’s Republic

of China,’’ AIDS Res Hum Retroviruses 14,5:461–4, 1998; and Zheng X et al. (China CDC), ‘‘The

Epidemiological Study of HIV Infection Among Paid Blood Donors in One County of China,’’ Zhonghua Liu Xing Bing Xue Za Zhi (China Journal of Epidemiology) 21,4:253–55, 2000. 24Dr. Yiming Shao, a virologist from the Chinese CDC, presented data at this conference. 25 Before 2000, epidemiology was published in Chinese journals, e.g., Ye DQ, et al., ‘‘Serological epidemiology of blood donors in Hefei, Anhui Province,’’ Chinese Journal of Public Health

17:367–8, 1998; and in 2001, in the West, e.g., Wu ZY, Rou KM, and R Detels, ‘‘Prevalence of

HIV Infection Among Former Commercial Plasma Donors in Rural Eastern China,’’ Health Policy and Planning 16,1:41–46, 2001 26 Hua Shan, Wang J, Ren F, et al., ‘‘Blood Banking in China,’’ The Lancet 360:1770–5, 2002. 27 ‘‘AIDS Comprehensive Prevention and Treatment Demonstration Sites,’’ China MOPH,

2003. 28For example, what was our response when Nelson Mandela failed to arrest the spread of

HIV in South Africa, when under his watch, the prevalence of HIV in antenatal clinics rose from

under 1 percent to near 30 percent?

mented, these initiatives will have a positive impact on public health and disease

prevention in the long term,21 and the current dual challenges of HIV/AIDS and

SARS add impetus to seeing that these programs are actually carried out. In the

meantime, the government has established a special fund for those without insurance who seek treatment for symptoms of SARS.

Despite these measures, public health experts believe that China urgently needs

international assistance in such areas as health surveillance, prevention, and control of communicable diseases. This is a role that the United States is well positioned to fill. The CDC and NIH have added personnel and funded projects in

China, but, compared to other nations, the United States could be contributing

much more.

In assessing the Chinese response to SARS, we are advised to turn to the lessons

of AIDS for guidance.22 Not surprisingly, the media has tended to highlight China’s

weaknesses in dealing with AIDS, particularly inaction in the face of HIV infection

of commercial blood plasma donors during the 1990s in a number of provinces, as

reported in the New York Times in late 2001. While I do not minimize the gravity

of this part of the epidemic or the negative consequences of delay, these images distort appreciation of the strengths of the Chinese response, strengths that must be

recognized and reinforced for the current system to respond effectively to SARS. For

example, evidence that the epidemic was spreading to plasma donors was actually

reported in the international and Chinese medical literature as early as 1995,23 and

in 1996, at the International AIDS meeting in Vancouver.24 By the time of the first

international AIDS conference in Beijing, in 2001, detailed epidemiology was being

conducted and reported.25 During this same time period, the daunting difficulties

involved in protecting China’s blood supply were documented in a number of publications. These included cultural barriers to an all-volunteer blood donation system,

shortage of clinical transfusion specialists, and the high cost of technology required

for accurate testing for transfusion-transmissible diseases such as hepatitis and

HIV.26 Efforts to improve the safety of the blood supply have been ongoing and

increasingly successful; and in 2002, the Chinese Ministry of Health had publicly

outlined a plan to include AIDS comprehensive prevention and care programs for

plasma donors and other risk groups in 100 counties identified as hardest hit by

AIDS.27 These are extremely important developments, and deserve media attention

as well as international support.

We excoriate the Chinese government for allowing the epidemic to spread through

hundreds of poor villages. But we should ask how well other countries with far

greater resources have performed? And we must also ask whether we apply a double

standard to developing countries when it comes to public health performance.28 In

32

29G Kolata, Flu: The Story of the Great Influenza Pandemic of 1918 and the Search for the

Virus that Caused It (NY: Simon and Schuster, 1999) p. 239. In fact, it was suspicion that SARS

was actually avian flu that delayed response in some locations. 30 Research ethics training programs have been carried out at the China CDC AIDS Center

during 2002 and 2003, sponsored by NIH Fogarty International Center AIDS International

Training in Research and Prevention Program, at both UCLA and UNC, and the NIH Office

of AIDS Research. 31P Farmer, Infections and Inequalities: The Modern Plague. (Berkeley: UC Press, 1999).

fact, few governments, rich or poor, have successfully stemmed the spread of AIDS.

In my view, the use of public health challenges as shorthand political critiques is

a real danger as we move forward to combat a global threat. If China applied the

same shorthand to characterize the U.S. healthcare system—a system that spends

more than any other nation on medical care—and its capacity to respond to crises,

what would we be reading? That African Americans are ten times as likely to die

from HIV as whites, a statistic that reflects the disgraceful fact that disparities in

morbidity and mortality between blacks and whites are actually greater now than

in 1950? That the CDC responded rapidly to protect U.S. senators from anthrax,

while failing to extend that same response to U.S. postal workers? In the rush to

judgment on SARS we should also remember that the Chinese public health system

has proven that it can respond to potential threats with speed and decisiveness: in

December 1997, fearing an outbreak of a deadly strain of avian flu, the Chinese decided in 1 day to slaughter 1.2 million chickens from 160 farms and from more than

1,000 retailers and stalls.29 How many other governments would have had the political will to take such action?

If response to SARS is compared to response to AIDS, we must examine all components of the response. We need to recognize that funding from the United States

and other donors for biomedical and scientific collaborations is having an important

impact on HIV prevention and treatment. Awarding a $15 million NIH Comprehensive International Program of Research on AIDS (CIPRA) grant to the China CDC

in summer 2002 did not garner much media attention, but it provided funds for vaccine development, research on risk factors and behavioral interventions, and treatment trials that are all moving forward. Other U.S. and international organizations

have contributed to research efforts, including the CDC, World Bank, DFID,

UNAIDS, UNICEF, AUSAID, WHO, Ford Foundation, USAID, and the Gates Foundation. An additional consequence of these collaborations is increased attention to

and training for researchers and communities on the ethics of humans subjects protections in clinical research.30 Perhaps most important, clinical research also has

the potential to focus attention on unmet treatment needs, as occurred after the

first International AIDS meeting held in Africa, in 2000, when the magnitude of

HIV among Africans became suddenly so salient that the world could no longer ignore the double standard of access to drugs only in developed countries. While many

factors influenced China’s decision to establish AIDS prevention and treatment services in the 100 highest prevalence counties, it was initiated after a major Sino-U.S.

conference, in November 2002, on AIDS research and training in Beijing.

Statistics on disease and death rates are often used like Rorschach tests to measure the legitimacy of a government. Infectious diseases, including emerging pathogens like HIV and SARS, are particularly potent foci for such critiques, in part

because they tend to fall hardest on the most vulnerable and least well served by

society. In fact, as Paul Farmer, a Harvard physician and anthropologist who has

written extensively about AIDS in Haiti, argues, ‘‘inequality itself constitutes our

modern plague.’’ 31 It is not clear how large the SARS epidemic in China will be or

how long it will last. What is clear is that the outbreak has alerted China and the

world to the relationship between infections and inequalities, and the peril to all

of us if we ignore that relationship.

The spread of these emerging pathogens in China and elsewhere is a direct, if unintended, consequence of economic reform and integration of China into the global

community. These are reforms that the United States has encouraged and in which

the business and scientific communities have played key roles. Helping to enhance

the strengths of China’s public heath system instead of focusing on its failures will

reinforce needed reforms that in some cases are already underway. We must credit

China’s current efforts to contain the epidemic in its hospitals, cities and borders,

and openness to international collaboration and information sharing for what they

are—contributions to the global efforts to control this deadly disease, and prevent

an epidemic from becoming a pandemic.

33

1 Anthony Kuhn, ‘‘China’s Fight Against SARS Spawns Backlash,’’ Los Angeles Times, My 6,

2003. 2 ‘‘Guangzhou is fighting an unknown virus,’’ Southern Weekly, February 13, 2003. 3 Renmin ribao, overseas edition, 22 April 2003.

PREPARED STATEMENT OF YANZHONG HUANG

MAY 12, 2003

IMPLICATIONS OF SARS EPIDEMIC FOR CHINA’S PUBLIC HEALTH INFRASTRUCTURE

AND POLITICAL SYSTEM

THE RETURN OF THE GOD OF PLAGUES

Since November 2002, a form of atypical pneumonia called SARS (Severe Acute

Respiratory Syndrome) has spread rapidly from China to Southeast Asia, Europe,

and North America, prompting World Health Organization (WHO) to declare the ailment ‘‘a worldwide health threat.’’ According to the organization, as of May 10,

2003, a cumulative total of 7,296 cases and 526 deaths have been reported from 33

countries or regions. The country that is particularly hit by the disease is China,

where the outbreak of SARS has infected more than 4,800 people and killed at least

235 nationwide (excluding Hong Kong and Macao). The worst-hit city is China’s capital Beijing, which has more than 2,200 cases—nearly half China’s total—and 116

deaths. History is full of ironies: the epidemic caught China completely off guard

45 years after Mao Zedong bade ‘‘Farewell to the God of Plagues.’’

The SARS epidemic is not simply a public health problem. Indeed, it has caused

the most severe social-political crisis to the Chinese leadership since the 1989

Tiananmen crackdown. Outbreak of the disease is fueling fears among some economists that China’s economy might be headed for a serious downturn. It already

seems likely to wipe out economic growth in the second quarter and possibly reduce

the growth rate for the entire year to about 6 percent, well below the level the government says it required to absorb millions of new workers who need jobs. The disease has also spawned anxiety, panic and rumour-mongering, which has already

triggered a series of protests and riots in China.1 Meanwhile, the crisis has underscored the tensions and conflicts among the top leadership, and undermined the

government’s efforts to create a milder new image in the international arena. As

Premier Wen Jiabao pointed out in a recent cabinet meeting on the epidemic, at

stake were ‘‘the health and security of the people, overall State of reform, development, and stability, and China’s national interest and international image.’’ How to

manage the crisis has become the litmus test of the political will and ability of the

fourth generation of Chinese leadership.

Given the political aspect of the crisis, this testimony will consider not only problems in China’s public health infrastructure but also dynamics of its political system. It proceeds in three sections. The first section focuses on the making of the

crisis, and discusses how problems in the health and political systems allowed SARS

to transform from a sporadic nuisance to an epidemic that now affects hundreds of

millions of people across the country. The next section considers the government

crusade against SARS, and examines how the State capacity in controlling the

disease is complicated and compromised by the health infrastructure and political

system. The last section concludes with some policy recommendations for the Commission to consider.

THE MAKING OF A CRISIS (NOVEMBER 2002–APRIL 2003)

Information blackout in Guangdong

With hindsight, China’s health system seemed to respond relatively well to the

emergence of the illness. The earliest case of SARS is thought to occur in Foshan,

a city southwest of Guangzhou in Guangdong province, in mid-November 2002. It

was later also found in Heyuan and Zhongshan in Guangdong. This ‘‘strange disease’’ alerted Chinese health personnel as early as mid-December. On January 2,

a team of health experts were sent to Heyuan and diagnosed the disease as an infection caused by certain virus.2 A Chinese physician, who was in charge of treating

a patient from Heyuan in a hospital of Guangzhou, quickly reported the disease to

local anti-epidemic station.3 We have reason to believe that the local anti-epidemic

station alerted the provincial health bureau about the disease, and the bureau in

turn reported to the provincial government and the Ministry of Health (MoH) shortly afterwards, since the first team of experts sent by the Ministry arrived at

Guangzhou on January 20 and the new provincial government (who took over on

34

4http://www.people.com.cn/GB/shehui/47/20030211/921420.html.

5 John Pomfret, ‘‘China’s slow reaction to fast-moving illness,’’ Washington Post, 3 April 2003,

p. A18. 6Li Zhidong, et al, Zhonghua renmin gonghe guo baomifa quanshu (Encyclopedia on the PRC

State Secrets Law) (Changchun: Jilin renmin chubanshe, 1999), pp. 372–374. I thank Professor

Richard Baum for bringing this to my attention. 7On February 18, the Chinese CDC identified chlamydia bacteria as the cause of the disease.

At the end of the month, WHO experts believed the disease was an outbreak of bird flue. They

did not identify it as a new infectious disease until early March. 8Pomfret, ‘‘China’s slow reaction to fast-moving illness.’’ 9 Ibid.

10South China Morning Post, February 11, 2003.

January 20) ordered an investigation of the disease almost at the same time.4 A

combined team of health experts from the Ministry and the province was dispatched

to Zhongshan and completed an investigation report on the unknown disease. On

January 27, the report was sent to the provincial health bureau and, presumably,

Ministry of Health in Beijing. The report was marked ‘‘top secret,’’ which means

that only top provincial health officials could open it.

Further government reaction to the emerging disease, however, was delayed by

the problems of information flow within the Chinese hierarchy. For three days,

there were no authorized provincial health officials available to open the document.

After the document was finally read, the provincial bureau distributed a bulletin to

hospitals across the province. Yet few health workers were alerted by the bulletin,

because most were on vocation for the Chinese New Year.5 Meanwhile, the public

was kept uninformed about the disease. According to the 1996 Implementing Regulations on the State Secrets Law (1988), any such diseases should be classified as

a state secret before they are ‘‘announced by the Ministry of Health or organs authorized by the Ministry.’’ In other words, until such time the Ministry chose to

make public about the disease, any physician or journalist who reported on the disease would risk being persecuted for leaking State secrets.6

In fact, until February 11, not only news blackout continued, but the government

failed to take any further actions on the looming catastrophe. Evidence indicated

that the provincial government in deciding whether to publicize the event considered more about local economic development than about people’s life and health.

The Law on Prevention and Treatment of Infectious Diseases enacted in September

1989 contains some major loopholes. First, provincial governments only after being

authorized by MoH are obliged to publicize epidemics in a timely and accurate manner (Article 23). Second, atypical pneumonia was not listed in the law as an infectious disease under surveillance, thus local government officials legally were not

accountable for the disease. The law allows addition of new items to the list, but

it does not specify the procedures through which new diseases can be added. All this

provided disincentives for the government to effectively respond to the crisis.

To be sure, the media blackout and the government’s slow response are not only

the sole factors leading to the crisis. Scientists until today are still not entirely clear

about the pathogen, spread pattern and mortality rate of SARS.7 Due to the lack

of knowledge about the disease, the top-secret document submitted to the provincial

health bureau did not even mention that the disease was highly contagious, neither

did it call for rigorous preventive measures, which may explain why by the end of

February, nearly half of Guangzhou’s 900 cases were healthcare workers.8 Indeed,

even rich countries, like Canada, were having difficulty controlling SARS. In this

sense, SARS is a natural disaster, not a man-made one.

Yet there is no doubt that government inaction resulted in the crisis. To begin

with, the security designation of the document means that health authorities of the

neighboring Hong Kong SAR was not informed about the disease and, consequently,

denied the knowledge they needed to prepare for outbreaks.9 Very soon, the illness

developed into an epidemic in Hong Kong, which has proved to be a major transit

route for the disease. Moreover, the failure to inform the public heightened anxieties, fear, and widespread speculation. On February 8, reports about a ‘‘deadly flu’’

began to be sent via short messages on mobile phones in Guangzhou. In the

evening, words like bird flu and anthrax started to appear on some local Internet

sites.10 On February 10, a circular appeared in the local media acknowledged the

presence of the disease and listed some preventive measures, including improving

ventilation, using vinegar fumes to disinfect the air, and washing hands frequently.

Responding to the advice, residents in Guangzhou and other cities cleared pharmacy

shelves of antibiotics and flu medication. In some cities, even the vinegar was sold

out. The panic spread quickly in Guangdong, and had it felt even in other provinces.

On February 11, Guangdong health officials finally broke the silence by holding

press conferences about the disease. The provincial health officials reported a total

35

11Southern Weekly, February 13, 2003. 12http://www.people.com.cn/GB/shehui/47/20030211/921422.html. 13 John Pomfret, ‘‘China’s Crisis Has a Political Edge,’’ Washington Post, April 27, 2003. 14Susan Jakes, ‘‘Beijing’s SARS Attack,’’ Time, April 8, 2003.

of 305 atypical pneumonia cases in the province. The officials also admitted that

there were no effective drugs to treat the disease, and the outbreak was only tentatively contained.11 From then on until February 24, the disease was allowed to

report extensively. Yet in the meantime, the government played down the risk of

the illness. Guangzhou city government on February 11 went as far as to announce

the illness was ‘‘comprehensively’’ under effective control.12 As a result, while the

panic was temporally allayed, the public also lost vigilance about the disease. During the run-up to the National People’s Congress, the government halted most reporting. The news blackout would remain until April 2.

Beyond Guangdong: Ministry of Health and Beijing

Under the Law on Prevention and Treatment of Infectious Diseases, MoH is

obliged to accurately report and publicize epidemics in time. The Ministry learned

about SARS in January and informed WHO and provincial health bureaus about the

outbreak in Guangdong around February 7. Yet no further action was taken. It is

safe to assume that Zhang Wenkang, the health minister, brought the disease to

the attention of Wang Zhongyu (Secretary General of the State Council) and Li

Lanqing (the vice premier in charge of public health and education). We do not

know what happened during this period of time; it is very likely that the leaders

were so preoccupied preparing for the National People’s Congress in March that no

explicit directive was issued from the top until April 2.

As a result of the inaction from the central government and the continuous information blackout, the epidemic in Guangdong quickly spread to other parts of China.

Since March 1, the epidemic has raged in Beijing. Yet for fear of disturbance during

the NPC meeting, city authorities kept information about its scope not only from

the public but also from the Party Center. MoH was reportedly aware of what was

happening in the capital. The fragmentation of bureaucratic power, however, delayed any concerted efforts to address the problem. As one senior health official

admitted, before anything could be done, the ministry had to negotiate with other

ministries and government departments.13 On the one hand, Beijing municipal government apparently believed that it could handle the situation well by itself and

thus refused involvement of MoH. On the other hand, the Ministry did not have control of all health institutions. Of Beijing’s 175 hospitals, 16 are under the control

of the army, which maintains a relatively independent health system. Having

admitted a large number of SARS patients, military hospitals in Beijing until midApril refused to hand in SARS statistics to the Ministry. According to Dr. Jiang

Yanyong, medical staff in Beijing’s military hospitals were briefed about the dangers

of SARS in early March, but told not to publicize what they had learned lest it

interfere with the NPC meeting.14 This might in part explain why on April 3, the

health minister announced that Beijing had seen only 12 cases of SARS, despite the

fact that in the city’s No. 309 PLA hospital alone there were 60 SARS patients. The

bureaucratic fragmentation also created communication problems between China

and World Health Organization. WHO experts were invited by the Ministry to

China but were not allowed to have access to Guangdong until April 2, 8 days after

their arrival. They were not allowed to inspect military hospitals in Beijing until

April 9. By that time, the disease had already engulfed China and spread to the

world.

What is to blame?

The crisis revealed two major problems inherent in China’s political system: coverup

and inaction. Existing political institutions have not only obstructed the information

flow within the system but also distorted the information itself, making misinformation endemic in China’s bureaucracy. Because government officials in China are all

politically appointed rather than elected by the general populace at each level of

administration, they are held accountable only to their superiors, not the general

public. This upward accountability generates perverse incentives for government officials in policy process. For fear that any mishap reported in their jurisdiction may

be used as an excuse to pass them over for promotion, government officials at all

levels tend to distort the information they pass up to their political masters in order

to place themselves in a good light. While this is not something unique to China,

the problem is alleviated in democracies through ‘‘decentralized oversight,’’ which

enables citizen interest groups to check up on administrative actions. Since China

still refuses to enfranchise the general public in overseeing the activities of government

36

15Minxin Pei, ‘‘A Country that does not take care of its people,’’ Financial Times, April 7,

2003. 16 Jean Oi, State and Peasant in Contemporary China (Berkeley: University of California

Press, 1989), p. 228.

agencies, the upper-level governments are easier to be fooled by their subordinates.

This exacerbates the information asymmetry problems inherent in a hierarchical

structure and weakens effective governance of the central state.

Nevertheless, a functionalist argument can be made to explain the rampant

underreporting and misreporting in China’s officialdom. In view of the dying communist ideology and the official resistance to democracy, the legitimacy of the

current regime in China is rooted in its constant ability to promote social-economic

progress. As a result of this performance-based legitimacy, ‘‘government officials

routinely inflate data that reflect well on the regime’s performance, such as growth

rates, while under reporting or suppressing bad news such as crime rates, social

unrest and plagues.’’ 15 In this sense, manipulation of data serves to shore up the

regime’s legitimacy.

In explaining the government’s slow response to tackling the original outbreak,

we should keep in mind that the health system is embedded in an authoritarian

power structure in which policies are expected to come from the political leadership.

In the absence of a robust civil society, China’s policymaking does not feature a salient ‘‘bottom-up’’ process to move a ‘‘systemic’’ agenda in the public to a ‘‘formal’’

or governmental agenda as found in many liberal democracies. To be sure, the process is not entirely exclusionary, for the party’s ‘‘mass line’’ would require leading

cadres at various levels to obtain information from the people and integrate it with

government policy during the policy formation stage. Yet this upward flow of information is turned on or off like a faucet by the State from above, not by the strivings

of people from below.16 Under this top-down political structure, each level takes its

cue from the one above. If the leadership is not dynamic, no action comes from the

party-state apparatus. The same structure also encourages lower-level governments

to shift their policy overload to the upper levels in order to avoid taking responsibilities. As a result, a large number of agenda items are competing for the upper level

government’s attention. The bias toward economic development in the reform era

nevertheless marginalized the public health issues in the top leaders’ agenda. As a

matter of fact, prior to the SARS outbreak, public health had become the least of

the concerns of Chinese leaders. Compared to an economic issue a public health

problem often needs an attention-focusing event (e.g., a large-scale outbreak of a

contagious disease) to be finally recognized, defined, and formally addressed. Not

surprisingly, SARS did not raise the eyebrows of top decisionmakers until it had

already developed into a nationwide epidemic.

Another problem that bogged down government response is bureaucratic fragmentation. Because Chinese decisionmaking emphasizes consensus, the bureaucratic

proliferation and elaboration in the post-Mao era requires more time and effort for

coordination. With the involvement of multiple actors in multiple sectors, the policy

outcome is generally the result of the conflicts and coordination of multiple subgoals. Since units (and officials) of the same bureaucratic rank cannot issue binding

orders to each other, it is relatively easy for one actor to frustrate the adoption or

successful implementation of important policies. This fragmentation of authority is

also worsened by the relationship between functional bureaucratic agency (tiao) and

the territorial governments (kuai). In public health domain, territorial governments

like Beijing and Guangdong maintain primary leadership over the provincial health

bureau, with the former determining the size, personnel, and funding of the latter.

This constitutes a major problem for the Ministry of Health, which is bureaucratically weak, not to mention that its minister is just an ordinary member of CCP

Central Committee and not represented in the powerful Politburo. A major policy

initiative from the Ministry of Health, even issued in the form of a central document, is mainly a guidance document (zhidao xin wenjian) that has less binding

power than one that is issued by territorial governments. Whether they will be honored hinges on the ‘‘acquiescence’’ (liangjie) of the territorial governments. This

helps explain the continuous lack of effective response in Beijing city authorities

until April 17 (when the anti-SARS joint team was established).

CHINA’S CRUSADE AGAINST SARS (APRIL 2003–PRESENT)

Reverse course

Thanks to strong international pressure, the government finally woke up and

began to tackle the crisis seriously. On April 2, the State Council held its first meeting to discuss the SARS problem. Within 1 month, the State Council held three

37

17 Business Week, April 28, 2003. 18 ‘‘China’s Chernobyl,’’ Economist, April 26, 2003, p. 9. 19 Xinhua News, http://news.xinhuanet.com/newscenter/2003–05/12/content—866362.htm. 20 Renmin ribao (People’s daily), overseas edition, May 9, 2003. 21 Yanzhong Huang, Mortal Peril: Public Health in China and Its Security Implications.

CBACI Health and Security Series, Special Report 6, May 2003.

meetings on SARS. An order from the MoH in mid-April formally listed SARS as

a disease to be monitored under the Law of Prevention and Treatment of Infectious

Diseases and made it clear that every provincial unit should report the number of

SARS on a given day by 12 noon on the following date. The party and government

leaders around the country is now held accountable for the overall SARS situation

in their jurisdictions. On April 17, an urgent meeting held by the Standing Committee of the Politburo explicitly warned against the covering up of SARS cases and

demanded the accurate, timely and honest reporting of the disease. Meanwhile, the

government also showed a new level of candor. Premier Wen Jiabao on April 13 said

that although progress had been made, ‘‘the overall situation remains grave.’’ 17 On

April 20 the government inaugurated a nationwide campaign to begin truthful

reporting about SARS.

The government also took steps to remove incompetent officials in fighting against

SARS. Health minister Zhang Wenkang and Beijing mayor Meng Xuenong were discharged on April 20 to take responsibilities for their mismanagement of the crisis.

While they were not the first ministerial level officials since 1949 who were sacked

mid-crisis on a policy matter, the case did mark the first sign of political innovation

from China’s new leadership. According to an article in Economist, unfolding of the

event (minister presides over policy bungle; bungle is exposed, to public outcry; minister resigns to take the rap) ‘‘almost looks like the way that politics works in a

democratic, accountable country.’’ 18 The State Council also sent out inspection

teams to the provinces to scour government records for unreported cases and fire

officials for lax prevention efforts. It was reported that since April, 120 government

officials have lost their jobs.

The crisis also speeded up the process of institutionalizing China’s emergency

response system so that it can handle public health contingencies and improve

interdepartmental coordination. On April 2, the government established a leading

small group led by the health minister and an inter-ministerial roundtable led by

a vice secretary general to address SARS prevention and treatment . This was replaced on April 23 by a task force known as the SARS Control and Prevention

Headquarters of the State Council, to coordinate national efforts to combat the disease. Vice Premier Wu Yi was appointed as command-in-chief of the task force. On

May 12, China issued Regulations on Public Health Emergencies (PHEs). According

to the regulations, the State Council shall set up an emergency headquarters to deal

with any PHEs, which refer to serious epidemics, widespread unidentified diseases,

mass food and industrial poisoning, and other serious public health threats.19

Meanwhile, the government increased its funding for public health. On April 23,

a national fund of two billion yuan was created for SARS prevention and control.

The fund will be used to finance the treatment of farmers and poor urban residents

infected with SARS and to upgrade county-level hospitals and purchase SARS-related medical facilities in central and western China. The central government also

committed 3.5 billion yuan for the completion of a three-tier (provincial, city, and

county) disease control and prevention network by the end of this year. This includes 600 million for the initial phase of constructing China’s Center for Disease

Control and Prevention (CDC).20 The government has also offered free treatment for

poor SARS patients.

The government also showed more interest in international cooperation in fighting

against SARS. In addition to its cooperation with WHO, China showed flexibility in

cooperating with neighboring countries in combating SARS. At the special summit

called by ASEAN and China in late April, Chinese premier Wen Jiabao pledged 10

million yuan to launch a special SARS fund and joined the regionwide confidencebuilding moves to take coordinated action against the disease.

Problems and Concerns

These measures are worth applauding, but are they going to work? The battle

against the disease can be compromised by China’s inadequate public health system.

One of the major problems here is the lack of state funding. Already, the portion

of total health spending financed by the government has fallen from 34 percent in

1978 to less than 20 percent now.21 Cash-strapped local governments whose healthcare system is under financed would be extremely hard pressed in the process of

SARS prevention and treatment. It is reported that some hospitals have refused to

38

22Washington Post, April 14, 2003. 23Ministry of Health, National Health Service Research. Beijing, 1999. 24 Renmin ribao, overseas edition, May 1, 2003. 25 BusinessWeek, April 28, 2003. 26 Xinhua News, May 10, 2003. 27 Renmin ribao, April 9, 2003. 28Pomfret, ‘‘China Feels Side Effects from SARS,’’ Washington Post, May 2, 2003. 29 Beijing Youth Daily, May 2, 2003; http://www.people.com.cn/GB/shehui/45/20030510/

988713.html.

accept patients who have affordability problems.22 The offer of free treatment for

poor SARS patients is little consolation to the large numbers with no health insurance, particularly the unemployed and the millions of ill-paid migrant workers, who

are too poor to consider hospital treatment which getting sick. According to a 1998

national survey, about 25.6 percent of the rural patients cited ‘‘economic difficulties’’ as the main reason that they did not seek outpatient care.23

The lack of facilities and qualified medical staff to deal with the SARS outbreak

also compromises government efforts to contain the disease. Among the 66,000

healthcare workers in Beijing, less than 3000, or 4.3 percent of them are familiar

with respiratory diseases.24 Similarly, hospitals in Guangdong are reported to face

shortage in hospital beds and ambulances in treating SARS. This problem is actually worsened by the absence of referral system and the increasing competition between health institutions, which often leads to little coordination but large degrees

of overlap. As SARS cases increases, some hospitals are facing the tough choice of

losing money or not admitting further SARS patients. In Beijing, the government

had to ask for help from the military.

Tremendous inequalities in health resource distribution posed another challenge

to the Chinese leadership. To the extent that health infrastructure are strained in

Beijing, the situation would be much worse in China’s hinterland or rural areas.

Compared with Beijing, Shanhai, and Jiangsu and Zhejiang provinces, which receives a full quarter of health-care spending, the seven provinces and autonomous

regions in the far west only get 5 percent.25 The rural-urban gap in health resource

distribution is equally glaring. Representing only 20 percent of China’s population,

urban residents claim more than 50 percent of the country’s hospital beds and

health professionals. So far, a large-scale epidemic has not yet appeared in the countryside. The percentage of peasants who are infected, however, is high in Hebei,

Inner Mongolia, and Shanxi, which points to the relatively high possibility of spread

to the rural areas.26

Some other concerns also complicate the war on SARS. In terms of the mode of

policy implementation, the Chinese system is in full mobilization mode now. All

major cities are on 24-hour alert, apparently in response to emergency directions

from the central leadership. So far, all indications point to decisive action for quarantine. By May 7, 18,000 people had been quarantined in Beijing. Meanwhile, the

Maoist ‘‘Patriotic Hygiene Campaign’’ has been revitalized. In Guangdong, 80 million people were mobilized to clean houses and streets and remove hygienically dead

corners.27 By placing great political pressure on local cadres in policy implementation, mobilization is a convenient bureaucratic tool for overriding fiscal constraints

and bureaucratic inertia whilst promoting grassroots cadres to behave in ways that

reflect the priorities of their superiors. Direct involvement of the local political leadership increases program resources, helps ensure they are used for program

purposes, and mobilizes resources from other systems, including free manpower

transferred to program tasks. Yet in doing so a bias against routine administration

was built into the implementation structure. In fact, the increasing pressure from

higher authorities, as indicated by the system that holds government heads personally responsible for SARS spread under their jurisdiction, makes strong measures

more appealing to local officials, who find it safer to be overzealous than to be seen

as ‘‘soft.’’ There are indications that local governments overkill in dealing with

SARS. In some cities, those who were quarantined lost their jobs. Until recently,

Shanghai was quarantining people from some regions hard hit by SARS (such as

Beijing) for 10 days even if they had no symptoms.28 While many people are cooperating with the government measures, there is clear evidence suggesting that some

people were quarantined against their will.29

The heavy reliance on quarantine raises a question that should be of interest to

the committee: will anti-SARS measures worsen human rights situations in China?

This question of course is not unique to China: even countries like the U.S. are debating whether it is necessary to apply dictatorial approach to confront health risks

more effectively. The Model Emergency Health Powers pushed by the Bush administration would permit state Governors in a health crisis to impose quarantines, limit

people’s movements and ration medicine, and seize anything from dead bodies to

39

30 Nicholas D. Kristof, ‘‘Lock ’Em Up,’’ New York Times, May 2, 2003. 31http://www.people.com.cn/GB/shehui/47/20030426/980282.html. 32http://www.people.com.cn/GB/shehui/44/20030508/987610.html. May 8, 2003. 33http://www.duoweinews.com Accessed on May 10, 2003. 34 Erik Eckholm, ‘‘Thousands Riot in Rural Chinese Town over SARS,’’ New York Times, April

28, 2003. 35 ‘‘China’s fight against SARS spawns backlash,’’ Los Angeles Times, May 6, 2003. 36http://www.people.com.cn/GB/shizheng/3586/20030422/977907.html, April 22, 2003. 37 Renmin ribao, April 29, 2003.

private hospitals.30 While China’s Law on Prevention and Treatment of Infectious

Disease does not explicate that quarantines apply to SARS epidemic, Articles 24 and

25 authorize local governments to take emergency measures that may compromise

personal freedom. The problem is that unlike democracies, China in applying these

measures excludes the input of civil associations. Without engaged civil society

groups to act as a source of discipline and information for government agencies, the

sate capability is often used not in the society’s interest. Official reports suggested

that innocent people were dubbed rumor spreaders and arrested simply because

they relayed some SARS-related information to their friends or colleagues.31 According to the Ministry of Public Security, since April public security departments have

investigated 107 cases in which people used Internet and cell phones to spread

SARS-related ‘‘rumors.’’ 32 Some Chinese legal scholars have already expressed concerns that the government in order to block information about the epidemic may

turn to more human rights violations.33

The lack of engagement of civil society in policy process could deplete social capital so important for government anti-SARS efforts. As the government is increasingly perceived to be incapable of adequately providing the required health and

other social services, it has alienated members of society, producing a heightened

sense of marginalization and deprivation among affected populations. These alienated and marginalized people have even less incentive than they would ordinarily

have to contribute to government-sponsored programs. The problem can be mitigated if workers and peasants are allowed to form independent organizations to

fight for their interests. Unfortunately, China’s closed political system offers few institutional channels for the disadvantaged groups to express their private grievances. The government failure to publicize the outbreak in a timely and accurate

manner and the ensuing quick policy switch caused further credibility problems for

the government. Washington Post reported a SARS patient who fled quarantine in

Beijing because he did not believe that the government would treat his disease free

of charge. This lack of trust toward the government contributed to the spread of rumors even after the government adopted a more open stance on SARS crisis. In late

April, thousands of residents of a rural town of Tianjin ransacked a building, believing it would be used to house ill patients with confirmed or suspected SARS, even

though officials insisted that it would be used only as a medical observation facility

to accommodate people who had close contacts with SARS patients and for travelers

returning from SARS hot spots. Again, here the lack of active civilian participation

exacerbated the trust problems. In initiating the project the government had done

nothing to consult or inform the local people.34 Opposition to official efforts to contain SARS was also found in a coastal Zhejiang province, where several thousand

people took part in a violent protest against six people who were quarantined after

returning from Beijing.35

Last but not least, policy difference and political conflicts within the top leadership can cause serious problems in polity implementation. The reliance on performance legitimacy put the government in a policy dilemma in coping with the crisis.

If it fails to place the disease under control and allows it to run rampant, it could

become the event that destroys the Party’s assertions that it improves the lives of

the people. But if the top priority is on health, economic issues will be moved down

a notch, which may lead to more unemployment, more economic loss and more social

and political instability. The disagreement over the relationship between the two

was evidenced in the lack of consistence in official policy. On April 17, the CCP Politburo Standing Committee meeting focused on SARS. In a circular issued after the

meeting, the Party Center made it clear that ‘‘despite the daunting task of reform

and development, the top priority should be given to people’s health and life security. We should correctly deal with the temporary loss in tourism and foreign trade

caused by atypical pneumonia, have long-range perspective in thinking or planning,

and do not concern too much about temporary loss.’’ 36 Eleven days later, the Politburo meeting emphasized Jiang Zemin’s ‘‘Three Represents’’ and, by calling for a

balance between combating SARS and economic work, reaffirmed the central status

of economic development.37 This schizophrenic nature of central policy is going to

cause at least two problems that will not help the State to boost its capacity in comVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00043 Fmt 6601 Sfmt 6621 88399.TXT China1 PsN: China1
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38 Andrew T. Price-Smith, ‘‘Pretoria’s Shadow: The HIV/AIDS Pandemic and National Security

in South Africa,’’ Special Report No. 4, CBACI Health and Security Series, September 2002, p.

27.39Mortal Peril: Public Health in China and Its Security Implications.

bating SARS. First, because the Party Center failed to signal its real current priorities loud and clear, local authorities may get confused and face a highly uncertain

incentive structure of rewards and punishments. Given the central government’s inability to perfectly differentiate between simple incompetence and willful disobedience, local policy enforcers may take advantage of the policy inconsistency to

‘‘shirk’’ or minimize their workload, making strict compliance highly unlikely. Second, the policy difference will aggravate China’s faction-ridden politics, which in

turn can reduce central leaders’ policy autonomy so important for effectively fighting

against SARS. A perceived crisis can precipitate State e`lites to fully mobilize the

potential for autonomous action. Yet power at the apex in China inheres in individual idiosyncrasies rather than institutions. This lack of institutionalization at the

top level, coupled with the pretensions of a centralized bureaucracy, sets the stage

for a very constrained from of politics, limiting what passed as national politics to

relations among the top elite. A general rule in Chinese elite politics is that policy

conflicts will be interwoven with factionalism. Former President Jiang’s allies in the

Politburo Standing Committee seemed to be quite slow to respond to the anti-SARS

campaign embarked on by Hu Jintao and Wen Jiabao on April 20. Wu Bangguo,

Jia Qinglin, and Li Changchun did not show up on the front stage of SARS campaign until April 24. The absence of esprit de corps among key e`lites would certainly

reduce state autonomy needed in handling the crisis. It is speculated that the fall

of Meng Xuenong, a prote`ge` of Hu, was to balance the removal of Zhang Wenkang,

a Jiang follower. Given that a health minister, unlike a mayor of Beijing, is not a

major power player, this seems to send a message that the former president is still

very much in control. The making of big news Jiang’s order on April 28 to mobilize

military health personnel only suggests the lack of authority of Hu Jintao and Wen

Jiabao over the military. Intraparty rivalry in handling the crisis reminded people

political upheavals in 1989, when the leaders disagreed on how to handle the

protests and Deng Xiaoping the paramount leader played the game between his top

associates before finally siding with the conservatives by launching a military crackdown.

POLICY RECOMMENDATIONS

The above analysis clearly points to the need for the Chinese government to beef

up its capacity in combating SARS. Given that a public health crisis reduces State

capacity when ever-increasing capacity is needed to tackle the challenges, purely endogenous solutions to build capacity are unlikely to be successful, and capacity will

have to be imported from exogenous sources such as massive foreign aid.38 In this

sense, building state capability also means building more effective partnerships and

institutions internationally. As I summarized somewhere else, international actors

can play an important role in creating a more responsible and responsive government in China.39 First, aid from international organizations opens an alternative

source of financing healthcare, increasing the government’s financial capacity in the

health sector. Second, international aid can strengthen the bureaucratic capacity

through technical assistance, policy counseling, and personnel training. Third, while

international organizations and foreign governments provide additional health resources in policy implementation, the government increasingly has to subject its

agenda-setting regime to the donors’ organizational goals, which can make the government more responsive to its people. The recent agenda shift to a large extent was

caused by the strong international pressures exerted by the international media,

international organizations, and foreign governments. There is indication that Internet is increasingly used by the new leadership to solicit policy feedback, collect public opinions and mobilize political support. Starting February 11, Western news

media were aggressively reporting on SARS and on government cover-up of the

number of cases in China. It is very likely that Hu Jintao and Wen Jiaobao, both

Internet users, made use of international information in making decisions on SARS.

In other words, external pressures can be very influential because Chinese governmental leaders are aware of the weakness of the existing system in effectively responding to the crisis, and have incentives to seek political resources exogenous to

the system.

From the perspective of international actors, helping China fighting SARS is also

helping themselves. Against the background of a global economy, diseases originating in China can be spread and transported globally through trade, travel, and

41

40 ‘‘Fear, not SARS, rattles South Jersey School,’’ New York Times, May 10, 2003. 1This testimony draws from recent articles published by the witness. See: Bates Gill, ‘‘China:

Richer, But Not Healthier,’’ Far Eastern Economic Review, May 1, 2003; Bates Gill, ‘‘China will

pay dearly for the SARS debacle,’’ International Herald Tribune, April 22, 2003; Bates Gill and

Andrew Thompson, ‘‘Why China’s health matters to the world,’’ South China Morning Post,

April 16, 2003.

population movements. Moreover, an unsustainable economy or State collapse

spawned by poor health will deal a serious blow to the global economy. As foreign

companies shift manufacturing to China, the country is becoming a workshop to the

world. A world economy that is so dependent on China as an industrial lifeline can

become increasingly vulnerable to a major supply disruption caused by SARS epidemic. Perhaps equally important, if the SARS epidemic in China runs out of control and triggers a global health crisis, it will result in some unwanted social and

political changes in other countries including the United States. As every immigrant

or visit from China or Asia is viewed as a Typhoid Mary, minorities and immigration could become a sensitive domestic political issue. The recent incident in New

Jersey, in which artists with Chinese background were denied access to a middle

school, suggests that when SARS becomes part of a national lexicon, fear, rumor,

suspicion, and misinformation can jeopardize racial problems in this country.40

Given the international implications of China’s public health, it is in the U.S. interest to expand cooperation with China in areas of information exchange, research,

personnel training, and improvement of public health facilities. But it can do more.

It can modify its human rights policy so that it accords higher and clearer priority

to health status in China. Meanwhile, it could send a clearer signal to the Chinese

leadership that the United States supports reform-minded leaders in the forefront

of fighting SARS. To the extent that regime change is something the U.S. would like

to see happening in China, it is not in the U.S. interest to see Hu Jingtao and Wen

Jiaobao purged and replaced by a less open and less humane government, even

though that government may still have strong interest in maintaining a healthy

U.S.-China relationship. The United States simply should not miss this unique

opportunity to help create a healthier China.

PREPARED STATEMENT OF BATES GILL

MAY 12, 2003

LESSONS, IMPLICATIONS, AND FUTURE STEPS

INTRODUCTION

Allow me to begin by expressing my appreciation to the Commission for this opportunity to appear before you today.

The repercussions for China of the SARS epidemic will resonate well beyond the

tragic and growing loss of life.1 On the brighter side, the progression of the epidemic

from Guangdong to Beijing, into the Chinese countryside, and across the world demonstrates the mainland’s increasing economic and social openness, mobility and

interdependence within the country itself, within the East Asia region and across

the planet, mobilizes concern for China’s health-care system, and may spark greater

openness and accountability within the Chinese leadership.

On the other hand, the outbreak of SARS also exposes a number of troubling developments and uncertainties in China: old-style misinformation, opaque communication, an ailing public health-care infrastructure, continued reticence in dealing

with foreign partners, and a likely slowdown in economic growth in China and the

region. All of these negative developments also raise serious questions about China’s

ability to cope with other infectious diseases such as hepatitis, tuberculosis, and

HIV/AIDS.

To examine these issues, the following pages will analyze some of the early lessons and implications of the SARS epidemic, and recommend steps that can be

taken to combat future health-care crisis in China more effectively.

LESSONS

Sclerotic and reactive process

To begin, by taking so long to reveal the real dimensions of the SARS problem,

Chinese authorities underscored their reputation as secretive and out of step with

international practice. News of falsified communications, deliberate misinformation,

obstruction of U.N. assessment teams and reluctance to reveal the full extent of the

42

epidemic to the World Health Organization all raise some troubling questions about

real change in China.

Some argue that Beijing’s current openness and responsiveness to SARS indicates

a new and more positive direction for the leadership. This may be, though it

remains relatively early to know with certainty whether this new direction will be

limited to SARS-related responses, or can be broadened to encompass a new acrossthe-board approach by the Chinese leadership. For the time being, it appears the

mainland’s initial denial and slow response to the SARS outbreak characterizes a

political environment where individual initiative is discouraged and social stability

is protected above other interests, to the detriment of social safety.

Additionally, the initial slow reaction by medical authorities can be explained by

outdated laws that prevent effective communication about emerging epidemics. The

State Secrets Law prevents local authorities from discussing an emerging outbreak

until the Ministry of Health in Beijing has announced the existence of an epidemic.

In the case of SARS, the silence of the bureaucracy, coupled with an increasingly

mobile population, virtually guaranteed that an infectious disease would quickly

spread well beyond Guangdong to the rest of the world.

Paradoxically, despite the sclerotic and old-style official response to SARS, China’s society has become more open than ever. Indeed, SARS spread as rapidly as it did

precisely because of China’s expansive interaction domestically and with its neighbors. But Beijing’s old way of doing things now faces a serious challenge: to prevent

infectious diseases from becoming major social, political and economic problems will

demand greater openness, transparency and candor, both at home and with partners abroad.

Ailing health-care capacity

Even if old-style political and bureaucratic bottlenecks could be overcome, it is unlikely that the mainland’s health-care system would have been able to prevent the

spread of SARS. The rapid spread of other emerging infectious diseases throughout

the mainland demonstrates the inability of the public health system to deal adequately with the complex nature of infectious diseases in a modern, globalized

China. In urban areas, public health is adequate for those who can afford it or are

still employed in the State sector, where insurance and company clinics can provide

primary care. However, in rural areas, where the majority of the population resides,

social services are inadequate to non-existent. The ability to diagnose and treat

emerging diseases competently does not exist throughout most of China.

Blood-borne and sexually transmitted infections have posed a particular challenge

to health authorities in China. For example, HIV/AIDS infects over one million Chinese, while similarly transmitted diseases including hepatitis B and C infect over

a hundred million more. The capacity of China’s health-care system is so stretched

that hepatitis B, a disease for which there is a vaccine, still affects an estimated

170 million Chinese, accounting for two-thirds of the world’s cases. The inability to

prevent the spread of infectious diseases within China will have serious long-term

economic impacts globally.

Reluctance to work with foreign partners

From the onset of SARS, Beijing and the provinces seem reluctant to fully accept

assistance from the international community to deal with their burgeoning public

health quandary. Only after a 2-week wait were inspectors from the World Health

Organization permitted to travel to the SARS outbreak’s epicenter in Guangdong.

This same reticence characterizes China’s earlier response to its HIV/AIDS crisis;

political leaders in Beijing and particularly throughout local jurisdictions remain

overly cautious in their willingness to accept international intervention and assistance.

IMPLICATIONS

Future epidemics

The official Chinese response to SARS did not bode well for how the government

might respond to other new, perhaps even more serious infectious disease threats.

Beijing’s initial reaction to SARS parallels its response to HIV/AIDS: denial, followed by reluctant acknowledgment and hesitant mobilization of resources to combat the epidemic. At present, in spite of some recent positive steps by Beijing, the

political and socioeconomic conditions are ripe in for the further spread of infectious

disease, including atypical pneumonia, hepatitis and HIV/AIDS.

True, Chinese leaders recently have taken greater interest in dealing with SARS.

But admitting to problems is only half the battle. There is still a long way to go,

not just in dealing with SARS, but with other health-care-related challenges. Probably

the biggest issues to tackle have to do with improved monitoring and communicaVerDate 11-MAY-2000 16:20 Jul 22, 2003 Jkt 000000 PO 00000 Frm 00046 Fmt 6601 Sfmt 6621 88399.TXT China1 PsN: China1
43

tion to accurately gauge the nature and extent of disease outbreaks, and developing

a more effective health-care infrastructure to meet these emergent challenges. Local

health-care capacity varies wildly across the country as central government spending in this sector flattens and localities are expected to pick up the difference. As

a result, the expertise and capacity to diagnose, prevent and treat the spread of disease—especially new viruses—is limited to nonexistent throughout much of China.

Economic downturn

The ability of China to devote greater resources to its health-care system will be

constrained in the near term by SARS’ near-term economic impact, though the true

effect over the next year or more is still hard to measure. Rough estimates made

by international economists indicate that China’s GDP growth for 2003 could be reduced by anywhere from 0.5 to 2 percent. Beijing is unlikely to issue figures on the

economic impact of SARS. But the decline in tourism, airline travel, trade and international confidence will certainly be felt in China, particularly in hard-hit

Guangdong Province, one of China’s main engines of direct foreign investment and

export-led growth. The government is trying to counter the effects of the downturn

with massive increases in funding for SARS prevention and control. Billions of RMB

have been allocated for projects throughout the country, ranging from construction

of infrastructure, to purchasing of supplies, to expanded research and development

of tests and medicines to combat SARS.

On the other hand, the short-term damage from SARS to the economy is perhaps

minimal compared to the shaken confidence of foreign investors in the Chinese government’s ability to effectively manage the health of the Chinese population—at a

minimum, the Chinese government’s reaction to the SARS outbreak has reminded

foreign investors and the world at large of the uncertainties and contradictions in

dealing with China.

Partly because it did not take steps promptly to address the public health crisis,

the Chinese government will also have to cope with a downturn in the economic

health of greater China—consisting of the mainland, Hong Kong and Taiwan—as well as the wider East Asian region. Singapore, Hong Kong, and Taiwan have

already trimmed official forecasts for economic growth as a result of the SARS outbreak. In one early analysis, Morgan Stanley lowered its estimate of East Asian

economic growth, excluding Japan, from 5.1 percent to 4.5 percent for 2003.

LOOKING AHEAD

China’s approach to SARS exposes troubling weaknesses that are reflected in Beijing’s overall reaction to deadly disease outbreaks. These are: opaque communication

channels—and even deliberate disinformation—from provincial to central authorities; denial and inaction short of international outcry and senior-leadership intervention; weakening public health-care capacity to monitor, diagnose, prevent and

treat emergent disease outbreaks; and early and persistent reticence to collaborate

effectively with foreign partners. Chinese authorities, working with the United

States and others, must try to change this pattern.

A first priority must be to implement more transparent, accurate and coordinated

public health-care management and communication. As a start, the country should

invest even more heavily in its epidemiological and surveillance capacity to accurately detect, monitor and quickly report on disease outbreaks and their progress.

Beijing should impose improved cooperation both between the central and local authorities and across the bureaucracy in a more effective interagency mechanism.

More transparent and enforced regulatory structures will also guide public health

and other officials to react in a more professional and socially conscious way.

Health-care related quasi- and non-governmental organizations could be more effectively utilized to monitor and improve methods for the prevention, treatment and

care of disease. But for these kinds of steps to succeed, China’s new leadership must

commit to raising the political priority of public health on their agenda of socioeconomic challenges.

Second, resources for public health will need to be expanded considerably, both

as a part of central and provincial government expenditures. At a basic level, more

well-trained professionals will be needed to properly diagnose, treat and care for

persons afflicted with emergent epidemics in China. Even more could be gained by

promoting greater awareness and preventive messaging, not to alarm people, but to

help them take the necessary precautions to protect against infectious diseases prevalent in China. Again, grass-roots and community-based organizations can be effective partners in this effort, if well-coordinated and given adequate leeway and

resources.

Finally, China and the international public health community have a shared

interest in scaling up cooperation and assistance programs. There are numerous

44

international health related assistance programs in China, but most operate at a

relatively modest scale. Expanding successful programs will require significant new

funding. Major donor nations should also consider re-channeling development aid to

focus more on public health programs. In the end, however, China—as one of the

world’s largest economies and an aspiring great power—will need to show a greater

commitment to working with international partners and to taking its public health

challenges more seriously.

Minister Wu Yi in her new role as the Minister of Health has already taken steps

to endorse increased cooperation with the United States on many of these fronts.

Speaking on the telephone last week, Vice Premier Wu and Secretary of Health and

Human Services (HHS) Tommy Thompson agreed to proceed with planning for

expanded collaborative efforts in epidemiological training and the development of

greater laboratory capacity in China. These new efforts will increase the number of

HHS personnel working in China beyond the two CDC employees currently

stationed in Beijing. This expanded collaboration, while certainly spurred by the

current SARS epidemic, will be very important in helping China combat other infectious diseases, especially newly emerging infectious diseases such as tuberculosis,

HIV/AIDS and other STDs.

45

SUBMISSIONS FOR THE RECORD

[From the South China Morning Post, April 16, 2003]

WHY CHINA’S HEALTH MATTERS TO THE WORLD

(By Bates Gill and Andrew Thompson)

The unstoppable march of severe acute respiratory syndrome (SARS) from

Guangdong to Hong Kong and beyond demonstrates the mainland’s increasing economic and social interdependence with the region and the entire planet. Since the

mainland has globalised and become East Asia’s engine of growth, maintaining the

health of its economy and society is in the world’s best interests and will present

a significant challenge to China’s partners in the region and around the world.

The notion of the mainland as a closed society needs to be seriously reconsidered.

Domestically, more Chinese enjoy freedom of movement then ever before. Internationally, millions of travellers from all over the world visit the mainland while

millions of Chinese travel abroad in increasing numbers every year. As the most important transit point for commerce throughout East Asia, Hong Kong has reaped

great benefits from its strategic position. Now Hong Kong, and to a lesser degree

the rest of East Asia and the world in general, are paying a price for the mainland’s

underdeveloped and opaque public health system.

The mainland’s formerly admirable public health system has not fared well in the

years of gaige kaifang (reform and opening up), with government spending unable

to keep pace with a changing society and integration with the rest of the world. The

public health system has proven itself ill-prepared to cope with rapidly emerging

diseases such as SARS, hepatitis and HIV/AIDS.

The mainland’s initial denial and slow response to the SARS outbreak

characterises a political environment where individual initiative is discouraged and

social stability is protected above other interests. Additionally, the initial slow reaction by medical authorities can be explained by outdated laws that prevent effective

communication about emerging epidemics. The State Secrets Law prevents local authorities from discussing an emerging outbreak until the Ministry of Health in Beijing has announced the existence of an epidemic. In the case of SARS, the silence

of the bureaucracy, coupled with an increasingly mobile population, virtually guaranteed that an infectious disease would quickly spread well beyond Guangdong to

the rest of the world.

Even if the bureaucratic delay did not occur, it is unlikely that the mainland’s

health-care system would have been able to prevent the spread of SARS. The rapid

spread of other emerging infectious diseases throughout the mainland demonstrates

the inability of the public health system to deal adequately with the complex nature

of infectious diseases in a modern, globalised China. In urban areas, public health

is adequate for those who can afford it or are still employed in the State sector,

where insurance and company clinics can provide primary care. However, in rural

areas, where the majority of the population resides, social services are inadequate

to non-existent. The ability to diagnose and treat emerging diseases competently

does not exist throughout most of China.

While SARS has had an immense, immediate economic impact on the economy of

the region, there will be a much greater impact in the long term, as other infectious

diseases emerge and spread. Blood-borne and sexually transmitted infections have

posed a particular challenge to health authorities in China.

HIV/AIDS infects over one million Chinese, while similarly transmitted diseases

including hepatitis B and C infect over a hundred million more. The capacity of China’s health-care system is so stretched that hepatitis B, a disease for which there

is a vaccine, still affects an estimated 170 million Chinese, accounting for two-thirds

of the world’s cases. The inability to prevent the spread of infectious diseases within

China will have serious long-term economic impacts globally.

The mainland will have to bolster its medical capacity if it is to maintain steep

economic growth rates and continue to play the role of ‘‘factory to the world.’’ The

central government must create a more effective, transparent and capable public

health management system that is able to communicate quickly both nationally and

internationally. Vice-Premier Wu Yi toured the Chinese Centres for Disease Control

and Prevention this month and insisted they establish an emergency response mechanism that includes an early warning and reporting function. The outcry over SARS

might motivate the central government to improve the country’s health system, but

that remains to be seen.

46

As the SARS outbreak demonstrates, the mainland’s health matters to the world.

Global co-operation to quickly identify, treat and prevent the spread of new, emerging diseases will help the mainland and the world maintain its economic and medical health.

* Bates Gill holds the Freeman Chair in China Studies and Andrew Thompson

is a research associate, at the Centre for Strategic and International Studies in

Washington.

[From the International Herald Tribune, April 22, 2003]

CHINA WILL PAY DEARLY FOR THE SARS DEBACLE

CONTAGIOUS CONFUSION

(By Bates Gill)

WASHINGTON: The repercussions for China of the outbreak of severe acute respiratory syndrome will resonate well beyond the tragic—and growing—loss of life.

Beijing’s evasive and tardy response to the challenge of the SARS virus reflects very

poorly on China’s international standing, undermines its economic prospects and

bodes ill for combating other infectious diseases.

The government’s embarrassment was evident Sunday when it admitted that

cases of SARS were many times higher than previously reported. At the same time,

China’s health minister and the mayor of Beijing were sacked. This was not the

hoped-for auspicious beginning for the newly installed fourth generation of Chinese

leadership and its widely touted goal of ‘‘building a well-off society.’’

By taking so long to reveal the real dimensions of the SARS problem, Communist

Party authorities underscored their reputation as secretive and out of step with

international practice. They have reminded foreign investors and the world at large

of the uncertainties and contradictions in dealing with China.

News of falsified communications, deliberate misinformation, obstruction of U.N.

assessment teams and reluctance to reveal the full extent of the epidemic to the

World Health Organization must give pause to even the headiest optimist about real

change in China. Beijing’s aspirations to regional leadership have been stalled and

will take time to put back on track.

The official Chinese response to SARS does not bode well for how the government

might respond to other new, perhaps even more serious infectious disease threats.

Beijing’s reaction to SARS parallels its response to AIDS: denial, followed by reluctant acknowledgment and hesitant mobilization of resources to combat the epidemic.

And the steady spread of SARS, AIDS and other infectious diseases shows that

even when authorities openly recognize a public health problem, they lack the infrastructure to fight back effectively.

Paradoxically, despite the sclerotic and old-style official response to SARS, China’s

society has become open. SARS spread as rapidly as it did precisely because of China’s expansive interaction domestically and with its neighbors. The international

community supports this trend and wants to see China succeed in its social, political

and economic transformation and its integration into the global mainstream.

Official Chinese tactics of suppression and concealment seem to work well in preventing what Beijing calls the ‘‘poisonous weeds’’ and ‘‘spiritual pollution’’ of serious

political and social reform. But Beijing’s way of doing things now faces a serious

challenge: to prevent infectious diseases from becoming major social, political and

economic problems will demand greater openness, transparency and candor, both at

home and with partners abroad.

The political system in China appears to be becoming more responsive. Yet the

SARS debacle reveals a dangerous fragility beneath the surface of the country’s rapidly transforming society. Partly because it did not take steps promptly to address

the public health crisis, the Chinese government will have to cope with a downturn

in the economic health of greater China—consisting of the mainland, Hong Kong

and Taiwan—as well as the wider East Asian region.

Singapore and Hong Kong have already trimmed official forecasts for economic

growth as a result of the SARS outbreak, and private researchers see a similar

SARS-related downturn in Taiwan. Beijing is unlikely to issue figures on the economic impact of SARS. But the decline in tourism, airline travel, trade and international confidence—in addition to the poor prospects of key economic partners in

the region—will certainly be felt in China, particularly in hard-hit Guangdong Province, one of China’s main engines of direct foreign investment and export-led

growth.

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Moreover, in an already skittish international economy teetering on the edge of

recession, loss of confidence in greater China, the one area where there was some

optimism, will have adverse implications for the global growth. Morgan Stanley, for

example, has lowered its estimate of East Asian economic growth, excluding Japan,

from 5.1 percent to 4.5 percent for 2003. And the SARS contagion may get worse

before it gets better.

* The writer holds the Freeman Chair in China Studies at the Center for Strategic and International Studies.

[From the Far Eastern Economic Review, May 1, 2003]

CHINA: RICHER, BUT NOT HEALTHIER

(By Bates Gill)

The news about Severe Acute Respiratory Syndrome (SARS) out of China seems

to get worse with each passing week. For, in spite of some recent positive steps by

Beijing, the political and socioeconomic conditions are ripe in China for the further

spread of infectious disease, including atypical pneumonia, hepatitis and HIV/AIDS.

True, Chinese leaders recently have taken greater interest in dealing with SARS.

But admitting to problems is only half the battle. There is still a long way to go,

not just in dealing with SARS, but with other health-care-related challenges. To

begin, even if political and bureaucratic impediments can be overcome, the Chinese

health-care system is incapable of adequately addressing the complexities of emergent epidemiological and prevention challenges. Local health-care capacity varies

wildly across the country as central government spending in this sector flattens and

localities are expected to pick up the difference. As a result, the expertise and capacity to diagnose, prevent and treat the spread of disease—especially new viruses—

is limited to nonexistent throughout much of China.

In addition, Beijing and the provinces seem reluctant to fully accept assistance

from the international community to deal with their burgeoning public-health quandary. Only after a 2-week wait were inspectors from the World Health Organization

permitted to travel to the SARS outbreak’s epicentre in Guangdong. This same reticence characterizes China’s earlier response to its HIV/AIDS crisis; political leaders

in Beijing and throughout local jurisdictions remain overly cautious in their willingness to accept international intervention and assistance.

China’s approach to SARS exposes troubling weaknesses that are reflected in Beijing’s overall reaction to deadly disease outbreaks. These are: opaque communication

channels—and even deliberate disinformation—from provincial to central authorities; denial and inaction short of international outcry and senior-leadership intervention; weakening public-health-care capacity to monitor, diagnose, prevent and

treat emergent disease outbreaks; and early and persistent reticence to collaborate

effectively with foreign partners. This must change.

A first priority must be to implement more transparent, accurate and coordinated

public-health-care management and communication. As a start, the country should

invest even more heavily in its epidemiological and surveillance capacity to accurately detect, monitor and quickly report on disease outbreaks and their progress.

Beijing will also need to oversee improved cooperation both between the central and

local authorities and across the bureaucracy in a more effective interagency mechanism. But for these kinds of steps to succeed, China’s new leadership must commit

to raising the political priority of public health on their agenda of socioeconomic

challenges.

Second, resources for public health will need to be expanded considerably, both

as a part of central and provincial government expenditures. At a basic level, more

well-trained professionals will be needed to properly diagnose, treat and care for

persons afflicted with emergent epidemics in China. Even more could be gained by

promoting greater awareness and preventive messaging, not to alarm people, but to

help them take the necessary precautions to protect against infectious diseases prevalent in China.

Finally, China and the international public-health community have a shared interest in scaling up cooperation and assistance programmes. There are numerous

international health-related assistance programmes in China, but most operate at

a relatively modest scale. Expanding successful programmes will require significant

new funding. The World Bank may be one resource that could expand its support

for health-related programmes in China, but major donor nations should also consider re-channelling development aid to focus more on public-health programmes. In

the end, however, China—as one of the world’s largest economies and an aspiring

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great power—will need to show a greater commitment to working with international

partners and to taking its public-health challenges more seriously.

The silver lining to the tragic SARS outbreak may be the attention brought to

China’s health-care system, and how China’s health is a concern to the world. Given

China’s intensifying interaction with partners around the world, more concerted action will be needed to stem the spread of debilitating and even fatal infections from

China, and ameliorate their effects on the economic wellbeing of China, the region

and the planet.

* The writer holds the Freeman Chair in China Studies at the Centre for Strategic and International Studies in Washington.

Æ