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Chinese Covid-19 numbers not fake: Berkeley Professor

Ng Qi Siang
Ng Qi Siang4/3/2020 05:34 PM GMT+08  • 7 min read
Chinese Covid-19 numbers not fake: Berkeley Professor
There’s no real reason to doubt Chinese statistics, said Professor Arthur Reingold at an online forum organised by Matthews Asia, the US’s largest Asia-only investment firm. 
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(Apr 3): Amid accusations that Beijing had falsified its COVID-19 numbers, a professor of public health at the University of California Berkeley has expressed that he and public health colleagues have few doubts about the accuracy of Chinese statistics.

"I'm not exactly sure what the politics of that are, but presumably sooner or later, word would get out if they were seriously under counting things," said Professor Arthur Reingold. "So I'm pretty prepared to believe that it's more or less accurate," said Reingold at an online forum organised by Matthews Asia, the US’s largest Asia-only investment firm.

Beijing had no incentive to report fraudulent statistics, he noted, as such deception would soon be exposed, said Reingold who is Division Head of Epidemiology at the university’s Richard and Rhoda Goldman School of Public Health.

Having worked on infectious disease control for over four decades, he has served for eight years in the US Centers for Disease Control and Prevention as well as in developing regions such as South Asia and West Africa.

Reingold made this point after Washington officials accused China of covering up the true number of COVID-19 cases in the country during the early stages of the pandemic. A classified Central Intelligence Agency (CIA) report purportedly concludes that Chinese figures were doctored.

“We have certainly seen [global disinformation campaigns] from China and others...to avoid responsibility and try and place confusion in the world, confusion about where the virus began,” blasted Secretary of State Mike Pompeo at a White House briefing for Asia-Pacific media.

“I think probably we were missing a significant amount of the data now that we see what happened to Italy and...Spain,” echoed Dr Deborah Birx, the White House’s coronavirus response coordinator.

Reingold, however, praised China’s forceful measures to bring the COVID-19 pandemic under control. The average number of daily new cases was 21 from 13-18 March in contrast to an average of 2,067 just a month earlier.

The professor cautioned, however, that a recent spike in imported cases means that China must remain vigilant as the pandemic progresses. “China cannot let its guard down. Frankly, no other country can let its guard down,” he warned.

Dark times for America

Reingold presented a far grimmer verdict regarding America’s efforts to contain COVID-19. The US has become the new epicenter of the pandemic as of March 26 2020, with the number of cases exceeding that of China and Italy at 82,174 cases.

As of last Friday, 245,213 Americans have been infected as the number of global cases passed the one million mark. Poor government coordination, weak healthcare infrastructure and insufficient testing could cost around 100,000-200,000 American lives.

Reingold also noted that many hospitals in the United States were overstretched by bed shortages and a lack of protective gear for medical personnel as case numbers crept steadily upwards. With many hospitals cutting “unnecessary capacity” in prior years to cut costs, there was a lack of available spare capacity left to absorb the sudden influx of patients.

COVID-19 testing in the US has also been hindered by the excessive amount of time required for such procedures to be tested and approved by medical authorities. The Federal government failed to expedite such processes despite having the power to do so, slowing the country’s disease control response while simultaneously resulting in a scarcity of test kits available.

The US response was in stark contrast to the decisive responses of countries like South Korea, which decisively implemented an expensive and aggressive COVID-19 testing programme. Comprehensive measures such as the introduction of drive-in clinics has seen thousands of people tested daily, allowing Seoul to bring infection rates under control.

Asked about the effectiveness of lockdown measures in the US, Reingold expressed some optimism that a comprehensive and coordinated lockdown on a nationwide basis could provide some relief. Such policies cannot be implemented within the decentralised US political system, however, since the power to order a lockdown rests with individual state governments.

This confluence of factors has seen the US contain COVID-19 less effectively than countries such as Singapore despite significantly higher healthcare expenditure. Washington spent 17.07% of its GDP on healthcare in 2016 as opposed to Singapore, which only spends 4.47%.

“There is much political discussion we can have about [this], but best not to have that discussion right now,” said Reingold.

Pandemic Economics

In spite of its progress in fighting the virus, China’s economy has taken a hit - likely the worst hit since the Tang Dynasty, said Matthews Asia analyst Andy Rothman.

For March, China recorded a 24% drop in real retail sales y-o-y; it also suffered a 14% drop in industrial value and a 25% y-o-y decline in fixed asset investment during January and February.

The economic slowdown was more a product of external shocks arising from the pandemic than structural economic weakness, meaning that most expenditure is more likely to be postponed rather than cancelled. Consumption-led growth will likely recover once conditions improve, said Rothman in a report for Matthews Asia.

Interestingly, Rothman sees a positive aspect in the dire numbers. “The numbers were even uglier than most anticipated, which is good! First, because it reflects that China’s leaders were focused primarily on fighting the virus, rather than on short-term economics.

“Moreover, these ugly numbers indicate that the leadership didn’t fudge the data to hide the seriousness of the situation,” he added.

Signs of life are already emerging in the Chinese economy. Economic production is slowly resuming and daily coal consumption at major power generation plants is now back to about 70% of where it usually is at this time of year. Consumer confidence remains high - a Credit Suisse survey of 800 consumers found that 80% expect the same (33%) or higher (50%) disposable income in 2021.

While the Chinese government has yet to adopt fiscal and monetary stimulus, there remains room for additional credit stimulus and interest rate cuts if the situation worsens. This will be crucial to preserving privately-owned SMEs, key drivers of growth which may lack the financial depth to withstand further downturns.

The US remains, however, mired in economic uncertainty as the government’s weak response to the virus spooked local investors.

The Dow fell 4.44% (973 points) on April 2: its greatest percentage loss in eight days and largest point drop in a fortnight. Unemployment has soared as a record 6.65 million people claimed unemployment benefits in March as the Bank of America predicted “the deepest recession on record.”

“We’ve seen a stuttering, unprepared government trying to mask the problem with empty confidence. It’s been a terrible look for our leaders, and as far as the markets are concerned, a costly one,” remarked Sina Kian, former Vice President at the Blackstone Group and adjunct law professor at New York University.

While it is unclear when the situation will improve, Reingold believes that the pandemic will lift no later than autumn 2021. Developing a vaccine to conclusively end the crisis will require 12-18 months, with additional time required for general distribution.

David Wessel, a senior fellow at the Brookings Institution, expressed pessimism about the prospects of recovery in case of a prolonged pandemic in the US.

“A long lockdown without enough government help could mean a painfully slow recovery: businesses that have gone under will have to rebuild, and people who lose their jobs during the pandemic will come out of it with little savings, lower credit ratings, and more fear about the future,” he said.

(Source: WIND and Baidu via Andy Rothman, Matthews Asia)

(Source: Bureau of Labour Statistics, USA via Bloomberg)

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