[Joint House and Senate Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




         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



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              CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA

                    LEGISLATIVE BRANCH COMMISSIONERS

House                                Senate

JIM LEACH, Iowa, Chairman            CHUCK HAGEL, Nebraska, Co-Chairman
DOUG BEREUTER, Nebraska              CRAIG THOMAS, Wyoming
DAVID DREIER, California             SAM BROWNBACK, Kansas
FRANK WOLF, Virginia                 PAT ROBERTS, Kansas
JOE PITTS, Pennsylvania              GORDON SMITH, Oregon
SANDER LEVIN, Michigan               MAX BAUCUS, Montana
MARCY KAPTUR, Ohio                   CARL LEVIN, Michigan
SHERROD BROWN, Ohio                  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)
                            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

 
         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.
    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 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 best-positioned 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 
reflect 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. 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 well-served 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, security 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 social-political 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 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 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.
    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.]
    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 acknowledgment 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, especially 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 high-level 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 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 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-than-responsive 
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 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.
    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.
    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 percent, 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 information. 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 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 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.
    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.
    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 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 short-sighted 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 increasingly 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.


                            A P P E N D I X

=======================================================================


                          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, red-cheeked 
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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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 post-Mao 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 priorities 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 locations\6\
---------------------------------------------------------------------------
    \3\ MS 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.
    \4\ WC 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).
    \5\ RJ Blendon, ``Can China's Health Care Be Transplanted Without 
China's Economic Policies?'' New England Journal of Medicine 300: 1453-
58, 1979.
    \6\ GE Henderson et al., ``Distribution of Medical Insurance in 
China,'' Social Science and Medicine 41,8: 119-30.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \7\ See 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 
non-communicable 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.
    \8\ GE 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)
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \10\ GE 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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \12\ The 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.
    \13\ Moreover, extent of inequality itself seems to be related to 
poorer healthcare access and outcomes.
    \14\ Jun Gao et al., 2002, p. 22.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \15\ Zhongguo 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).
    \16\ Liu YL WC Hsiao, and K Eggleston., 1999, p 1350.
    \17\ Jun Gao et al., 2002 p. 26.
    \18\ Liu 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.
    \20\ GG 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.
---------------------------------------------------------------------------
    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 well-recognized 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 
implemented, 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.
---------------------------------------------------------------------------
    \21\ Personal communication with Dr. Yiming Shao, Chinese Center 
for Disease Control and Prevention
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \22\ LK 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.
    \24\ Dr. 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.
---------------------------------------------------------------------------
    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 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?
---------------------------------------------------------------------------
    \28\ For 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?
    \29\ G 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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \31\ P Farmer, Infections and Inequalities: The Modern Plague. 
(Berkeley: UC Press, 1999).
---------------------------------------------------------------------------
    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.
                                 ______
                                 

                  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.
---------------------------------------------------------------------------
    \1\ Anthony Kuhn, ``China's Fight Against SARS Spawns Backlash,'' 
Los Angeles Times, My 6, 2003.
---------------------------------------------------------------------------
    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 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.
---------------------------------------------------------------------------
    \2\ ``Guangzhou is fighting an unknown virus,'' Southern Weekly, 
February 13, 2003.
    \3\ Renmin ribao, overseas edition, 22 April 2003.
    \4\ http://www.people.com.cn/GB/shehui/47/20030211/921420.html.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \5\ John Pomfret, ``China's slow reaction to fast-moving illness,'' 
Washington Post, 3 April 2003, p. A18.
    \6\Li 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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \7\ On 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.
    \8\ Pomfret, ``China's slow reaction to fast-moving illness.''
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \9\ Ibid.
    \10\ South China Morning Post, February 11, 2003.
---------------------------------------------------------------------------
    On February 11, Guangdong health officials finally broke the 
silence by holding press conferences about the disease. The provincial 
health officials reported a total 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.
---------------------------------------------------------------------------
    \11\ Southern Weekly, February 13, 2003.
    \12\ http://www.people.com.cn/GB/shehui/47/20030211/921422.html.
---------------------------------------------------------------------------
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 mid-April 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.
---------------------------------------------------------------------------
    \13\ John Pomfret, ``China's Crisis Has a Political Edge,'' 
Washington Post, April 27, 2003.
    \14\ Susan Jakes, ``Beijing's SARS Attack,'' Time, April 8, 2003.
---------------------------------------------------------------------------
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 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.
---------------------------------------------------------------------------
    \15\ Minxin Pei, ``A Country that does not take care of its 
people,'' Financial Times, April 7, 2003.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \16\ Jean Oi, State and Peasant in Contemporary China (Berkeley: 
University of California Press, 1989), p. 228.
---------------------------------------------------------------------------
    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 
sub-goals. 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 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.
---------------------------------------------------------------------------
    \17\ Business Week, April 28, 2003.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \18\ ``China's Chernobyl,'' Economist, April 26, 2003, p. 9.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \19\ Xinhua News, http://news.xinhuanet.com/newscenter/2003-05/12/
content--866362.htm.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \20\ Renmin ribao (People's daily), overseas edition, May 9, 2003.
---------------------------------------------------------------------------
    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 confidence-
building 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 health-care 
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 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\
---------------------------------------------------------------------------
    \21\ Yanzhong Huang, Mortal Peril: Public Health in China and Its 
Security Implications. CBACI Health and Security Series, Special Report 
6, May 2003.
    \22\ Washington Post, April 14, 2003.
    \23\ Ministry of Health, National Health Service Research. Beijing, 
1999.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \24\ Renmin ribao, overseas edition, May 1, 2003.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \25\ BusinessWeek, April 28, 2003.
    \26\ Xinhua News, May 10, 2003.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \27\ Renmin ribao, April 9, 2003.
    \28\ Pomfret, ``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.
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \30\ Nicholas D. Kristof, ``Lock 'Em Up,'' New York Times, May 2, 
2003.
    \31\ http://www.people.com.cn/GB/shehui/47/20030426/980282.html.
    \32\ http://www.people.com.cn/GB/shehui/44/20030508/987610.html. 
May 8, 2003.
    \33\ http://www.duoweinews.com Accessed on May 10, 2003.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 combating 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 elites 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 elites would 
certainly reduce state autonomy needed in handling the crisis. It is 
speculated that the fall of Meng Xuenong, a protege 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.
---------------------------------------------------------------------------
    \36\ http://www.people.com.cn/GB/shizheng/3586/20030422/
977907.html, April 22, 2003.
    \37\ Renmin ribao, April 29, 2003.
---------------------------------------------------------------------------
                         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.
---------------------------------------------------------------------------
    \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.
    \39\ Mortal Peril: Public Health in China and Its Security 
Implications.
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \40\ ``Fear, not SARS, rattles South Jersey School,'' New York 
Times, May 10, 2003.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \1\This 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.
---------------------------------------------------------------------------
    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 
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 across-the-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 communication 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 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.

                       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.
    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.
    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 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.

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