China Is Winning the Coronavirus Information War

Teddy Fusaro is the chief operating officer at Bitwise Asset Management, a cryptocurrency asset management firm in San Francisco. He has held management and leadership positions at alternative asset management companies for the past decade, and began his career at Goldman Sachs. 

Westerners often say the Chinese word for crisis has two meanings: “danger” and “opportunity.” Without passing judgment on the character of the word (wēijī, 危机), my assessment is that this is a time of great opportunity for the People’s Republic of China, the Communist Party of China (CCP) and its General Secretary, the President of China, Xi Jinping. And it is a time of great danger for the existing world order and the United States’ role within it. 

The existing world order was formed in the era of American empire and hegemony, a world defined by the growth of capitalism and spread of democracy; a system that has existed since the middle of the twentieth century, where the United States controls trade routes, extends military power and possesses the most powerful object in the world: the global reserve currency, the United States dollar. 

In a post-coronavirus world, the U.S. risks losing its status as leader of the free world and, with it, the claim to a set of ideals framed in our Constitution. The power on the other side of that dichotomy is the world’s great emerging power, the People’s Republic of China, and its authoritarian system of state capitalism.

Xi’s War on ‘COVID-19’

At first, the Chinese Communist Party, by all accounts, reeled from the disaster, too. The government silenced those who spoke out about it, obviously obscured the data related to those who were sick and have died (this they continue to do), and refused entry of international health officials. 

As the virus spread, Communist Party of China Foreign Ministry spokesman Zhao Lijan began promoting a theory that members of the U.S. Army who visited Wuhan in October 2019 brought the virus to China. CCP state media organs repeated the story, and the U.S. State Department summoned the ambassador to the U.S. and used strong language to denounce the accusation.

The State Department release says that “Secretary of State Michael R. Pompeo spoke by phone on March 16 with Yang Jiechi, Director of the Office of Foreign Affairs of the Communist Party of China. Secretary Pompeo conveyed strong U.S. objections to PRC efforts to shift blame for COVID-19 to the United States.”

Furthermore, the CCP propaganda machine has taken great lengths to establish and brand the global pandemic as “COVID-19,” instead of allowing any geographically descriptive naming convention to take root. The CCP has found a willing dance partner in the Western political left and associated media, both constituencies always eager to promote cultural togetherness (a noble cause, no doubt).

Political divisions within the United States have aided in turning this into a left/right issue, with the President referring antagonistically to COVID-19 as “ChinaVirus” and being pilloried in response by the left-leaning political commentariat, already inflamed by the early failures of the U.S. response, and reeling itself from its lack of teeth in waiting so long to cover the crisis in broad publications. Meanwhile, whitewashing the Chinese association from the pandemic’s global nomenclature (many prior pandemics are descriptively termed based on their regional origin, such as Zika, West Nile virus, the Spanish flu, Ebola, etc.) is a key part of the strategy to separate China from its role as initial source of the of the outbreak and smoothes the transition into its preferred and powerful narrative as defender of the globe and supplier of medical equipment to stricken nations.

The CCP did, however, buy the entire world critical time – a month or more – to prepare for what was coming by implementing draconian measures to close entire cities and economies and implementing social distancing by force and mandate. Reports indicate that, once taken seriously, the CCP and President Xi executed and implemented the pandemic playbook with precision and authority (keeping people inside and separate, cancelling public events, requiring the wearing of masks in public in affected areas, etc.).

The CCP’s ability to control, decide, and enact appears at this moment in stark contrast to the American model.

By that time, any reasonable person with a spreadsheet and a basic understanding of exponential math knew the risk of COVID-19 spreading across the globe was high. But Western governments, including the one that leads the world, our government in Washington DC, failed to respond to take advantage of that window.

Instead, as the United States cannot even internally allocate resources to deal with our sick and dying, China is manufacturing medical equipment and supplies, and shipping it to the rest of the world. And the all-important publicity campaign – coordinated through diplomats, official and unofficial CCP spokespeople, global media, state media, and non-governmental organizations – of announcing these provisions of aid to virus stricken countries has been equally strong.

The CCP media strategy is to ensure the announcement of this aid (which, it should be accurately noted, is gracious, life-saving, and a blessing for many in need) is widely publicized, so that credit is given where credit is due. A very specific image is being curated.

The picture being drawn across the internet, if you zoom out enough, is of one a world power in decline – hardly able to fight the virus on its own home turf – while another one rises to the occasion, and not only stops the virus at home, but extends that leadership abroad, saving lives in countries around the planet.

The dream of revival

It was the striking change in Chinese culture’s interpretation of the word “ye xin” – the Chinese word for “ambition.” The literal interpretation of the word is “wild heart” and had previously “carried the suggestion of savage abandon and absurd expectations – a toad who dreams of devouring a swan, as an old saying had it.” But in the near decade that had passed before he returned to China in 2012 – just in that small amount of time – the word’s meaning and power had changed dramatically.

Children’s books, self-help books for adults, television programs, talk shows, and the news, all spoke of the pioneering spirit of the “wild heart” of ambition.

China has been one of the world’s great powers – or its greatest power – for most of human history. And the last 30 years of growth in China have been nothing short of shocking when viewed on historical scale. It is beyond the scope of this piece to put that growth into context, but I will point out that in 1872, the United States had “per capita income” of three thousand dollars per year, and it took nearly 60 years for the U.S. to go from there to seven thousand. China did it in seven years between 2000 and 2007.

The growth of China into the second most powerful country in the world is so shockingly abrupt that it doesn’t actually look real on a long-term chart. In 1978 U.S. President Jimmy Carter officially announced the recognition of the Communist government in Beijing. In just 40 years, it has become the second largest economy in the world, and the engine of the world’s growth.

In recent years, China has also begun to flex its military muscle in the region, antagonizing the Philippines, Vietnam and others, while strengthening its military power in the South China Sea. It has increased its military activity generally, begun conducting naval maneuvers and exercises, and has constructed military and industrial outposts on artificial islands in disputed waters. World powers historically extend military strength first across their networks of important trade routes, and this pattern looks no different. The CCP understands more well than anyone else it’s growing power on the world stage. Lux Xun, China’s greatest modern writer, wrote that “hope is like a path in the countryside. Originally, there was no path, but once people begin to pass, a way appears.”

It is broadly accepted by historians that major shifts in geopolitical relationships — wars, phase transitions, shifts in balances of power – often coincide with massive disruptions to economies – debt crises. History shows that politics, power, and economics are always tightly intertwined. COVID-19 is an opportunity for the CCP. 

A system worth defending

Capitalism, and systems of government that work functionally alongside and through it, has proven to be the greatest system in the history of the world for raising humans out of poverty, increasing total wealth levels and distributing opportunity across populations. Humans are now happier, healthier, less violent, more rich, and live a better lifestyle than at any time in human history. And that success is now more widely distributed from top to bottom than at any time since humans walked the earth (and this despite the very real growing wealth gaps and common misunderstanding of just how good things have gotten). Freedom, liberty, capitalism, the free press and the free market – western liberalism – have given humans the ability to express themselves and behave as they see fit like never before, and has given us the greatest improvement in living standards in the history of the earth. But a new model has arisen in the East – Chinese State Capitalism – and its time may have arrived.

The United States World Order, with the U.S. as the pre-eminent world power, has allowed Americans in particular to enjoy many advantages. Status as the issuer of the world’s reserve currency brings an economically advantageous, cyclically reinforcing wealth creation mechanism and a durable advantage over all other nations in the world. In addition to its military might, the U.S. dollar’s reserve status is the most powerful tool in the American arsenal. That status is at risk in initiatives like China’s digital currency. 

The CCP’s ability to control, decide, and enact appears at this moment in stark contrast to the American model of disagreement, disorganization and delay.