The coronavirus could represent a significant long-term economic issue for China, alongside a serious health pandemic, says new report from no.1 ranked university affiliated think tank, LSE IDEAS.
According to George Magnus, Associate at Oxford University’s China Centre, SOAS and LSE IDEAS, there are at least two other serious issues the coronavirus represents for China.
The first key issue China now faces is the dire consequences of the government’s containment measures for the economy.
The report suggests that unless the government’s restrictions on movement start to ease soon, they could be significant in hindering China’s goal of doubling their GDP and income per head in the decade to 2020. According to Magnus, this is dependent on significant GDP growth which can only happen if things get back to normal as soon as possible.
If these targets aren’t met, Magnus suggests that this will add reputational damage to other dissent currently felt by many about the mishandling of COVID-19.
Alongside this, Magnus suggests that there is now also the burning question of whether the centralisation of power and authority, the obsession with stability and control, and the stifling of dissent and debate, seen clearly throughout this crisis, are compromising a more sophisticated development potential for China.
According to George Magnus:
“To western-trained eyes, the weaknesses of China’s governance system seem obvious. In complex, information-driven societies, in which we strive for the continuous application of advanced technologies across multiple economic sectors, and independent, accountable and professional regulation, the urge to control and suppress information or knowledge is highly likely to damage development.”
George Magnus is an Associate at LSE IDEAS, and Research Associate at the China Centre, Oxford University, and at the School of Oriental and African Studies, London. George was the Chief Economist, and then Senior Economic Adviser at UBS Investment Bank from 1995-2016.