Asep A 00800

How China Managed the COVID-19
Pandemic*
Wei Tian
School of Economics
Peking University
weitianpku@163.com
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Abstract
The COVID-19 pandemic has swept across China and the world, causing more than 30 million infec-
tions and incalculable damage. China was seriously damaged and threatened by the disease in the first
quarter of 2020, but finally succeeded in halting its spread in a short period. This was achieved through
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quick and strong measures in self-protection, mobility control, resource allocation, professional health
care, and disinfection, under the organization of the government and the cooperation of all the Chinese
people. The measures that were taken to prevent the spread of COVID-19 proved to be efficient in
fighting the outbreak in Beijing in June 2020. This paper reviews China’s experience with COVID-19, the
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Chinese economy’s performance during the pandemic, and the government’s policies to protect lives,
maintain markets, and promote the economy. The data show that strong monetary and fiscal policies
accelerated the country’s economic recovery. These policies, including tax reductions and credit sup-
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port, targeting small- and medium-size enterprises (SMEs) and industries and regions that were severely
damaged, have helped to create jobs and encourage production and investment.
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1. Introduction
The COVID-19 pandemic has spread worldwide, harming the people and economies of
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most of the countries in the world. In China, the outbreak of COVID-19 in early January
2020, in Wuhan (in Hubei province), was a huge challenge to China’s society and economy.
More than 85,000 people across all of China’s provinces were infected by the virus. The
Chinese people and government have made great efforts to bring COVID-19 under control
and minimize the resulting harm. The first and strongest wave of the pandemic started at
the end of 2019; it was finally pinned down near the end of March. By 2 July, as reported in
Table 1, daily new confirmed cases of the virus were reduced to a small number. In total,
the country had around 85,000 confirmed cases, 80,000 people recovered, and more than
4,000 people died of COVID-19. China set a good example of quickly bringing the epidemic
under control, and has shared information with other countries on preventing the spread
of the disease. By 19 August, more than 22 million people worldwide had been infected by
* The author thanks Wing Thye Woo and Miaojie Yu for their suggestions and comments.
Asian Economic Papers 20:1 © 2020 by the Asian Economic Panel and the Massachusetts Institute of
Technology
https://doi.org/10.1162/asep_a_00800
How China Managed the COVID-19 Pandemic
Table 1. Summary of COVID-19 cases in China (by 2 July 2020)

Confirmed cases Recovered cases Deaths
Cumulative Incremental Cumulative Incremental Cumulative Incremental
National 85,278 15 80,102 15 4,648 0
Beijing 925 2 592 3 9 0
Hubei 68,135 0 63,623 0 4,512 0
Source: National Health Commission of the People’s Republic of China. The number of incremental cases is the change in
cumulative cases from the previous day.
the virus, including 89,980 people from China. The infection rate in China is around 0.006
percent, far lower than the world level of 0.31 percent. The death rate in China is also lower
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than the average level for the world.
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Figure 1 shows the trends of COVID-19 in China and Hubei province. Daily new con-
firmed cases increased drastically before early February and then started to decrease
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slowly.1 There was a similar trend in Hubei province. Most of the confirmed cases were
from Hubei, particularly Wuhan, the capital city of Hubei province, which was also where
the first case of COVID-19 was identified in China. The rapid growth of the early confirmed
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cases in Wuhan could be attributed to lack of information and underestimation of the se-
riousness of the disease. The first case was detected in late December 2019, but it did not
receive enough attention, and effective treatment was not developed until late January
2020. In January, the public was not aware of the disease. Several large gatherings, includ-
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ing the Chinese New Year party in Baibuting community, with more than 10,000 people,
contributed to the explosive spread of the virus.
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The number of daily new close contacts also reached its peak in early February, then
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started to drop in the middle of the month. The incremental new close contacts in other
provinces other than Hubei increased significantly in late January (Figure 2), largely be-
cause of people traveling before the Chinese New Year, which is the largest annual pe-
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riod of travel in the country. The large movement of the population brought the virus from
Wuhan to the whole nation. By the end of January, when the national health authorities
arrived in Wuhan and officially confirmed the transmission of the disease, the confirmed
cases had already reached more than 9,000. As China has the largest population in the
world and is a developing country where vast rural areas lack medical resources, losing
control of COVID-19 could have led to many more infections and deaths.
Wuhan and most other cities in Hubei province were closed within a few days after 23
January, and transportation within the city was strictly controlled to reduce mobility. In
addition to population mobility, insufficient medical resources—especially the lack of test
1 A sharp jump of around 14,000 newly confirmed cases appeared on 12 February was dropped
from the figure because of a change in the statistical measure—clinical confirmed cases were not
included until that date.
102 Asian Economic Papers

Figure 1. Trend of COVID-19 in China and Hubei Province
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Source: National Health Commission of the People’s Republic of China.

Note: The data of 12 February is dropped from the figure because of the changing of statistical caliber.
kits, masks, and other personal protective equipment—was a huge challenge for the gov-
ernment. A large share of the potentially infected population was concentrated in Wuhan,
generating an urgent need for medical facilities and basic supplies. The government car-
ried out systematic measures to control mobility and reallocate resources effectively: Var-
ious government departments implemented policies to support regions and patients, who
were classified into different groups according to the level of seriousness. Regions that
were less affected were designated as support cities in Hubei province, and government
officials were sent to work in the grassroots communities. With the intensive information
campaign and population control, population mobility dropped quickly. Resources were

Figure 2. Trend of new close contacts in China and Hubei Province
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transported with the highest priority to Wuhan and other cities in Hubei province, volun-
teer medical professionals from other regions were sent to Hubei province to provide sup-
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port, hospitals were expanded, temporary cabin hospitals were built, and complementary
policies largely reduced personal medical costs. The spread of the disease was successfully
contained in one month, and the number of daily new confirmed cases started to decline in
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early February.
The effective and rapid response to the disease received high recognition from the World
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Health Organization (WHO) and countries around the world. By the end of March, all re-
gions in China returned to the low-risk level, and the number of daily new confirmed cases
reported originally from China dropped below ten.2 In the middle of June, however, a sec-
ond wave broke out in Beijing, but it soon subsided due to the government’s immediate
and effective response. The Chinese economy and people suffered from the pandemic,
as have all nations, among which SMEs and frontline workers have suffered the severest
damage and frontline workers endured seemingly insurmountable challenges.
The pandemic continues to cause serious damage to the world’s safety and economic well-
being. The literature focuses on measures to prevent the spread of COVID-19, spatial dif-
fusion, and the impact on economies. One strand of the literature analyzes the impact of
2 Although there are still dozens of new confirmed cases imported from other countries each day.

policies like lockdowns on economic outcomes (Alvarez et al. 2020; Argente et al. 2020;
Farboodi et al. 2020; Glaeser et al. 2020). Alvarez et al. (2020) study the optimal lockdown
policy under which a planner pays the minimum cost to control the number of fatalities
caused by COVID-19. They find that under the optimal lockdown policy, the welfare loss is
equivalent to a one-time payment of 2 percent of GDP. Glaeser et al. (2020) further discover
that every 10 percentage point decrease in population mobility leads to a reduction of ap-
proximately 20 percent in COVID-19 cases per capita. Fajgelbaum et al. (2020) explore the
optimal dynamic lockdown within a commuting network; they find that spatial lockdown
achieves higher income returns than uniform lockdowns. Farboodi et al. (2020) quantify
the expected cost of the pandemic in the United States under laissez-faire equilibrium and
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an optimal policy equilibrium; the results indicate that the cost in the laissez-faire equi-
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librium is 1.5 times higher than the cost in optimal policy equilibrium. Alfaro et al. (2020)
consider the impact of social distancing on the dynamic of the pandemic. According to
their conclusions, when people are more patient and altruistic, a stringent lockdown policy
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becomes less necessary.
Others study the spatial diffusion of the pandemic. Antràs et al. (2020) examine the cross-
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country epidemiological externalities, which generate substantial reductions in aggregate
welfare through deaths and declining trade. Birge et al. (2020) focus on a spatial model of
epidemic spread and suggest that targeted closures can achieve a similar goal at lower cost
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than a policy of citywide closure. Bisin and Moro (2020) explore the role of the geographic
characteristics of the spread of COVID-19. Argente et al. (2020) quantify the economic effect
of disclosure of information about individuals who tested positive for COVID-19 in Korea.
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Compared with a lockdown policy, disclosure of information has lower economic cost of
social isolation.
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Another line of work explores the impact of the pandemic on the macroeconomy. Bonadio
et al. (2020) focus on the role of global value chains during the pandemic. They conclude
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that for economies participating in global value chains, the COVID-19 shock contributed to
an average reduction in real GDP of 7.4 percent; without global value chains, the average
reduction in real GDP would have been 30.2 percent. Similarly, Eichenbaum et al. (2020)
develop a framework that finds that the best policy saves approximately half a million lives
in the United States, although it increases the severity of the recession in short run. Based
on the study by Eichenbaum et al., Krueger et al. (2020) explore the mitigation mechanism
of private consumption behavior, which can avoid more than 80 percent of the decline in
output within one year. Atkeson (2020) uses susceptible-infected-removed (SIR) theory to
show that there will be a severe shortage of staff for financial and economic infrastructure if
the fraction of active infections in the population exceeds 10 percent. Glover et al. (2020) ex-
amine whether the shutdown policy is Pareto-improving in practice. Their results indicate
that a partial shutdown is the best choice for a utilitarian planner, and the shutdown in mid
April was too expensive.

The Chinese economy suffered seriously from the epidemic in the first quarter of 2020,
when all the major economic indexes experienced a large fall. It has rebounded since the
second quarter using a basket of recovery policies. For example, to stimulate the economy
while keeping people safe, the government implemented several rebooting policies while
following everyday quarantine procedures. The economic rebooting policies, under the
guideline of the two sessions of China’s Congress of 2020, cover all aspects of the economy
and particularly foster low-income groups and small firms through strong financial sub-
sidies and tax reductions. For example, the People’s Bank of China has specially arranged
RMB 300 billion of special re-loans to support financial institutions providing loans to key
enterprises for epidemic prevention and control, and the procedure for firms was simpli-
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fied to the great extent to save time. The everyday quarantine approach includes guidelines
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for individuals; mobility control; detailed sanitation requirements for public buildings, in-
cluding office buildings, malls, gyms, and transportation stations; and specific standards
for certain industries, like food, delivery, and education.
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Section 2 of the paper introduces the background of the COVID-19 pandemic in China and
how it was successfully controlled. Section 3 describes how the second wave of the disease
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in June in Beijing was conquered in a short time and the experiences and lessons learned
from the battle. Section 4 reviews China’s economy during the epidemic and the policies
and measures that helped to increase welfare and employment, reduce business costs, and
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stimulate the economy. Section 5 concludes the paper.
2. Background of COVID-19 and major measures

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2.1 Mobility control and COVID-19 in China

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COVID-19 erupted in China just before the Chinese New Year, the country’s most impor-
tant traditional festival, which is associated with the largest population flow in the world.
The New Year break usually lasts seven days, and the total population flow during the
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break is about 300 million. The largest concentration of travel occurs from 20 days before
to 20 days after the festival, mostly consisting of migrant workers and students who return
home and the tourist population. Before the break, the population moves from the large
cities—including Beijing, Shanghai, Guangzhou, Shenzhen, and other capital cities—to the
prefecture- and county-level cities, and after the break it moves back. In addition, there is a
surge in movement within and across provinces around the New Year break, of which the
cross-provincial flow is mainly long-distance. The volume remains at an extremely high
level from the second to the sixth day of the New Year break, in addition to the peaks be-
fore and after the break, because many people are visiting relatives.
The extent of the population mobility greatly amplified the spread of COVID-19 and made
the situation more dangerous. The period between 1 and 23 January 2020, the month be-
fore Wuhan was locked down, coincided with the peak period of population return. As the

Table 2. Migration from Wuhan during the Spring Festival, by destination

Migration from Wuhan (by January 20) Confirmed cases (by July 2)
Major destination Population mobility
Rank province (10,000s) Number Rank
1 Hubei 68,135 1
2 Henan 33 1,276 3
3 Hunan 21 1,019 5
4 Anhui 14 991 6
5 Guangdong 13 1,642 2
6 Jiangxi 13 932 8
7 Jiangsu 10 654 12
8 Chongqing 7 582 14
9 Zhejiang 7 1,269 4
10 Sichuan 7 595 13
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Major cities
Beijing 6.3
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Shanghai 5.3
Guangzhou 3.8
Shenzhen 3.6
Nanjing 2.1
Hangzhou 2
Metropolitan regions
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Yangtze River Delta 12
Pearl River Delta 9
Chongqing-Chengdu 10.1
Source: Baidu Co. and National Health Commission of the People’s Republic of China.
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tenth largest outflow city in China, Wuhan had an average daily outflow of 250,000 peo-
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ple. Among the entire movement of the population, the population flowing from Wuhan
to other cities in Hubei province totaled 4.3 million, accounting for 70 percent of the total
outflow (Table 2). Xiaogan and Huanggang were the cities with the largest numbers of re-
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turnees from Wuhan, and they were also among the hardest hit areas. Most destinations
of the interprovincial flow are surrounding provinces and cities throughout the country.
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Metropolitan regions and large cities are densely populated hubs of population flows,
which may have spread the COVID-19 virus to all parts of the country through cross in-
fection. Henan received the largest number of returnees from Wuhan, followed by Hunan,
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Anhui, Guangdong, and Jiangxi. Chongqing, Zhejiang, and Sichuan also received large
return flows of travelers. The ranking of the population flows to these provinces and cities
is basically consistent with the severity of the pandemic in those areas. The urgency of the
situation called for rapid and effective measures to stop the transmission of the virus. Un-
der these circumstances, it was decided to shut down the city. On 24 and 25 January, after
the lockdown, the outflow of people from Wuhan decreased by 140,000 and 80,000, respec-
tively, and it was close to zero after 26 January. The shutdown measure played an impor-
tant role in reducing the spread of the virus.
Figure 3 shows the migration index constructed by the Baidu company based on its moni-
toring data on population movement. The population flow out of Wuhan fell substantially
after 23 January, and within-city population movement also dropped compared with the
previous year.

Figure 3. Trend of migration from Wuhan during the Spring Festival
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Source: Baidu Co. Pr
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It was particularly worrying that after the end of the Spring Festival holiday, among the 5
million people who left Wuhan before it was closed, a considerable number of them may
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have been exposed to COVID-19, and the large-scale backward flow of these potentially
infected people would certainly cause difficulties in curbing the pandemic. The concern
was that a large wave of the population would be moving across the country after the end
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of the holiday on 31 January. Such movement of people would have increased the spread
of the virus. Therefore, the government extended the Spring Festival holiday according to
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the epidemic situation in different regions. In Hubei province, the holiday was extended to
10 March; in other provinces and cities, it was extended to 9 February, to make the holiday
longer than the longest incubation period of the virus.
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To decrease population mobility nationwide, the government implemented a series of

measures, including an information campaign to increase social distancing during the
Spring Festival holiday, to reduce the number of contacts between people and increase
the distance between people, which played a role in curbing the spread of the epidemic.
These measures included encouraging home recuperation; reducing mass gathering
activities; canceling or delaying large-scale public activities; closing schools, libraries,
museums, some government agencies, and factories; and stopping some bus lines and
provincial passenger transport. At the same time, the township, village, and street gov-
ernments strengthened publicity to popularize knowledge about protective measures
through television, mobile devices, banners, and other social media, to encourage the pub-
lic to wash their hands frequently, disinfect frequently, and wear masks when going out.
The information campaigns also emphasized the importance of self-isolation and reducing

Figure 4. Number of doctors per 10,000 people
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Source: WHO World Health Statistics 2019.
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going out to visit relatives during the Spring Festival. The general public had a sense of
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self-protection, thanks to this series of measures, information disclosure, and health public-
ity and education.
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The government relied on community mobilization, implemented grid and carpet screen-
ing and management, and used contact tracing to detect and treat patients as soon as
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possible. As a result of these measures and the extension of the holiday, the flow and ag-
gregation of the population during the epidemic was greatly reduced. Almost everyone
conscientiously wore masks and took effective self-protection measures when going out,
and asymptomatic infected people isolated themselves before symptoms appeared and
received treatment immediately. These measures played a crucial role in the control of the
epidemic in a short time.
2.2 Reallocation of medical resources and COVID-19 in China

The second huge challenge, in addition to the large population and population mobility
around the Chinese New Year, was that the country had an insufficient amount of medi-
cal resources. According to the WHO’s World Health Statistics 2019, in China, the number
of doctors per 10,000 people is 17.9, which is only slightly higher than the global average
(Figure 4). This figure is significantly lower than that of many developed countries, and

Table 3. Medical resources in Hubei Province

Panel A: By year
Number of Number of
medical registered
Number of beds in health technical Number of licensed nurses per
care institutions per 1,000 personnel per (assistant) doctors per 1,000
Year persons 1,000 persons 1,000 persons persons
2015 5.79 6.26 2.21 2.64
2010 3.26 4.16 1.62 1.53
Panel B: By city
Number of Number of Number of
Number of health care beds in medical Number of
health care institutions at health care technical licensed
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institutions the grassroots institutions personnel (assistant)
Inhabitants per 1,000 level per 1,000 per 1,000 per 1,000 doctors per
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City (k) persons persons persons persons 1,000 persons
Wuhan 10,607.7 0.43 0.40 7.50 8.53 3.06
Huangshi 2,458.0 0.45 0.43 6.06 6.80 2.12
Shiyan 3,383.0 0.84 0.80 7.85 7.86 2.73
Yichang 4,115.0 0.73 0.69 6.12 6.87 2.45
Xiangyang
Ezhou
Jingmen
Xiaogan
Jingzhou
5,614.0
1,059.5
2,896.3
4,878.0
5,705.9
0.66
0.45
0.69
0.55
0.59
0.63
0.43
0.65
0.53
0.56
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5.01
5.67
4.09
4.67
5.86
1.92
6.05
4.57
5.11
2.26
1.92
2.45
1.68
1.92
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Huanggang 6,291.0 0.67 0.65 5.24 5.15 2.01
Xianning 2,507.0 0.51 0.49 5.31 6.62 2.63
Suizhou 2,190.8 0.63 0.59 4.59 4.64 1.81
Enshi 3327.0 0.90 0.87 6.82 5.84 2.09
Xiantao 1155.0 0.75 0.73 4.20 4.49 1.67
Qianjiang 958.0 0.74 0.70 4.31 7.24 2.91
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Tianmen 1292.0 0.71 0.70 4.27 4.19 2.15

Shennongjia 76.8 0.96 0.89 5.56 5.21 1.64
Source: Medical and Health Service System Planning of Hubei Province 2015–20.
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also lower than that in many developing countries. Furthermore, the number of nurses
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and midwives per 10,000 people in China is only 23.1, which is far lower than the global
average of 34.8. According to a survey report on the survival status of Chinese doctors,
more than 50 percent of the doctors who were surveyed said that they worked more than
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60 hours a week on average, and nearly 25 percent of them worked more than 80 hours a
week on average. As a consequence, doctors are generally overworked.
The shortage of medical staff is only one aspect of the lack of medical and health resources.
China’s medical resources are unevenly distributed across regions, as the top-level hos-
pitals are highly concentrated in the coastal developed areas, provincial capitals, and big
cities. As a province in the middle of the country, Hubei has 280,000 beds in health insti-
tutes (Table 3)—that is, roughly 5.8 beds and six doctors per 1,000 people, which is far
behind the average level of China and the world. According to China’s National Bureau
of Statistics data, the usual utilization rate of hospital beds is as high as 92.7 percent in
Hubei province, which is the second highest among all the provinces. Thus, there were
only 20,000 beds available that could be used to treat COVID-19 patients. And among those
beds, many were not suitable for patients with infectious or respiratory diseases.

By the end of January, the number of confirmed cases in Hubei had already surpassed
66,000, with a large potential infected population. The shortage of medical resources was
a significant concern for the treatment of patients. The distribution of medical resources
within Hubei was also uneven across cities. By 5 February, the number of people diag-
nosed in Wuhan was 9.1 per 10,000 people, which was far higher than other cities, and
about 2.3 times the number in Ezhou, followed by Xiaogan, Suizhou, and Huanggang.
As the capital of Hubei province, Wuhan had 38,000 doctors, and the number of doctors
per thousand people was the highest among cities in the province. In Xiaogan and Suizhou,
there were fewer than two doctors per thousand people. The smaller numbers of infected
people in other cities in Hubei province might have been attributed to the lack of test kits
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in the early stage of the pandemic, which implies that hospitals and health systems in those
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areas had to bear an increasing burden as more infected people were confirmed.
Furthermore, the whole country was facing a severe shortage of medical resources, partic-
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ularly health institutions and personal protective equipment for health care professionals.
According to the press conference held by National Health Commission on 11 February,
the national mask capacity utilization rate had reached 94 percent; and the utilization rate
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of medical N95 masks, which were urgently needed in frontline prevention and control,
had reached 128 percent. Polices were implemented to promote the resumption of pro-
duction of key industries, increase capacity, and expand production through various ap-
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proaches, like modifying the existing production equipment from nonmedical products
to medical products. The government took measures such as subsidies and credit support
to expand the production of masks, by rapidly organizing enterprises to resume produc-
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tion, vigorously promoting the expansion and transformation of enterprises, and ensuring
the coordinated operation of the whole industrial chain. To meet the increasing need for
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beds and medical institutes, Leishenshan and Huoshenshan, two temporary but profes-
sional hospitals, were constructed within 20 days to receive and treat patients in severe
conditions, following Beijing’s experience fighting against SARS in 2003. Sixteen large
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public buildings, like the gymnasiums, convention centers, and exhibition centers, were
transformed into temporary health facilities within three weeks, to treat patients with mild
symptoms, and hotels were organized as isolation centers.
To overcome the shortages and end the epidemic, more than ten ministries—including
health, transportation, commerce, and trade—jointly strengthened resource allocation
policies to prioritize to the needs of key areas. Medical materials were allocated and trans-
ported to Hubei at the fastest speed. By 12 February, 726,000 pieces of medical protective
clothing, 358,000 medical isolation masks and eye masks, 156 negative pressure ambu-
lances, 2,000 ventilators, nearly 7,000 EKG monitors, and 761 automatic infrared ther-
mometers had arrived in Hubei province. By the end of March, more than 8 million pieces
of medical protective clothing; 1.65 million pieces of medical isolation clothing, medi-
cal isolation masks, and eye masks; 357 tons of disposable disinfectant; 660,000 sets of

Table 4. Survey of medical staff participation in response to COVID-19 (%)

Infectious Critical
All disease Respiratory care
Work in epidemic area 3 9 12 15
Received local COVID-19 patient 14 62 35 20
Indirectly involved with COVID-19 77 29 52 64
Not involved with COVID-19 5 0 1 1
Source: “Hello Doctor 2020,” reported by Dingxiangyuan in the 7th DHC (DXY Healthcare Convention) Summit.
hand-held infrared thermometers; more than 1,000 negative pressure ambulances; 70,000
sets of ventilators; and other medical treatment equipment were allocated for Hubei
province and other regions. In addition to epidemic prevention and control materials, daily
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necessities, such as food and other items, were given priority to areas where the epidemic
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was severe.
The efficient reallocation of resources during the epidemic was mainly achieved through
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policy guidance and encouragement, support, and donations from other regions. Most
of the medical personnel who assisted Hubei province took the initiative to enroll. More
than 20,000 medical personnel from 29 provinces formed more than 180 medical teams
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to support Hubei and Wuhan. In view of the large number of severe cases in Hubei and
Wuhan, more than 7,000 critical care medical professionals volunteered to be sent to in-
crease the intensity of critical care. According to the “Hello Doctor” project survey, 95 per-
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cent of the medical staff across the nation took part in the work related to the epidemic, and
almost all the professionals working in infectious, respiratory, and critical care diseases
participated (Table 4).
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3. Second wave of COVID-19 in Beijing

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3.1 Picture of the second wave in Beijing

On 11 June, one confirmed COVID-19 case was reported in Beijing, after two months of
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zero reports since the middle of April. The number of new confirmed cases increased
within a few days, ringing the alarm for Beijing again. It was detected that the virus orig-
inated in a food market called Xinfadi in Fengtai district, where the virus was brought from
other countries through imported seafood. The market is the largest fresh food trading
center in Beijing, providing 90 percent of the daily demand for fresh food of the whole
city. The market covers an area of 210,000 square meters, its daily average vehicle flow
is more than 30,000, and its passenger flow is more than 50,000 people per day, sourcing
from restaurants, supermarkets, and customers all over the city. According to the sta-
tistical report of the Beijing Municipal Health Commission, from 11 to 23 June, 253 cases
(98.8 percent) were clearly associated with the outbreak at Xinfadi.
Compared with the situation in January, the second wave of the epidemic spread more
quickly, and more cases were confirmed within the first few days with a rapid growth

Figure 5. Distribution of confirmed cases in the second wave of COVID-19 in Beijing
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rate. It took only five days to link the first case to more than 100 cases, compared with 11
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days for the first wave in January. New challenges came in short and concentrated bursts,
suggesting that the earlier phase of the epidemic had strong transmission and diffusion.
Geographically, the epidemic was mostly spread around the Xinfadi market, or along the
public transport lines of the key areas and other related markets. More than 70 percent of
the confirmed cases were within a five-kilometer radius around Xinfadi—more than 70
percent were in Fengtai, followed by Daxing, Haidian, Xicheng, Dongcheng, and other
districts (Figure 5).
Based on the experience at the beginning of the year and the SARS outbreak in 2003, Beijing
had been implementing standardized and effective daily prevention and control measures.
These included monitoring and management of personnel flow, disinfection and cleaning
of public areas, isolation, testing, and screening. People were familiar with and cooper-
ated with daily protection, wearing masks, accepting isolation and testing, and reducing

Figure 6. Daily incremental confirmed cases in Beijing
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unnecessary travel. The government, social institutions, and medical institutions had accu-
mulated sufficient experience in the treatment and systematic management of patients,
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which, along with the commitment to saving lives, formed a relatively perfect system.
Without this comprehensive and systematic management and the concerted efforts of all
sectors of society, the second round of COVID-19 in Beijing could not have been effectively
controlled in such a short period (Figure 6).
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3.2 Major measures and quick response

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Rapid response and comprehensive and effective measures are the most important ac-
tions to contain the epidemic in a truly short period. On the same day that the first case
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was found on 11 June, a team of professionals immediately started to conduct a detailed

epidemiologic investigation on the cases. With the help of information technology and
other means, the patients reviewed their activities and persons with whom they had con-
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tact during the 14 days before the onset of the disease; they identified 38 close contacts and
all suspected exposure sites.
According to the results of the investigation, the disease control team quickly sampled
and tested the environment of every place where each infected patient had visited and ev-
ery individual with whom they had come into close contact. On the morning of 12 June, it
was found that the environmental samples from the comprehensive trading hall of Xinfadi
market, where one of the patients had visited, were detected positive for the nucleic acid
test. With a second confirmed case reported to have visited the comprehensive trading hall
of on the same day, Xinfadi market was flagged for epidemic transmission. The beef and
mutton complex building, which was the location of the positive environmental detection,
was sealed off and nucleic acid detection was carried out for the staff in the building. After
thorough and complete sampling and testing of Xinfadi market was conducted, the whole

market was closed on 13 June, and the staff in the market were all transferred to observa-
tion points in the city for centralized isolation. It was announced that Fengtai district was in
an emergency situation, and nearby communities were also closed for traffic. As the largest
fresh food trading center in Beijing, Xinfadi was connected with the water and drainage
system and transportation system of the city, with tons of products that might have been
infected. Rapid, regular, and thorough disinfection was carried out by professional disin-
fection teams on 4 July to block the transmission. More markets and 12 residential areas
around the market were blocked and started to close simultaneously, and 22 nucleic acid
detection points were set up to test all the residents.
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The epidemic control team worked against the clock in conducting detailed epidemiologic
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investigation on the activity scope of each confirmed case. The team carried out verifica-
tion and information supplementation with relevant departments. Strict management
measures, such as centralized medical observation, were implemented for all those who
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may have been in close contact with the infected individuals. All town, street, and town-
ship governments conducted a comprehensive investigation of the individuals who had
visited Xinfadi market and carried out home isolation and observation. Communities
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and zones where new cases or close contacts were discovered were upgraded to middle
or high risk level. All schools were suspended. And to prevent more severe transmission
and spread to other regions, Beijing’s public health emergency plan was raised to level 2 (it
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had been at level 3), which meant that leaving Beijing would require a negative test result
within 7 days.
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Since the new outbreak on 11 June and the first confirmed case, Beijing made decisive de-
cisions and took various measures to improve the nucleic acid testing capacity and expand
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the scope of detection. According to the suggestions of the National Health Commission
and an expert group, populations were divided into target groups and other groups. Full-
coverage inspections were uniformly organized and carried out on the target industries
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and areas for free. Tests for the non-target groups were also fully available in official testing
institutions at an affordable price. The number of official COVID-19 testing sites in Beijing
was expanded from 98 in early June to 184 by 8 July, and the daily testing capacity was
increased from 100,000 to more than 500,000. Technology played a large role as well. In ad-
dition to the nationwide uniform tracing system through GPS in mobile applications, the
COVID-19 online consultation platform for Beijing was encouraged to support the devel-
opment and demonstration of key technologies in medical artificial intelligence.
Thanks to the rapid response and effective measures in Beijing, the epidemic was quickly
and effectively checked, and the number of daily new confirmed cases fell back to zero in
less than one month (Figure 7). The routine COVID-19 defense system played an important
role in helping Beijing fight the outbreak quickly. China had entered a new stage of nor-
malized daily prevention, which had maintained the major measures during the high-risk

Figure 7. Trend of the second wave COVID-19 in Beijing and major measures
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Source: National Health Commission of the People’s Republic of China; Beijing Health Commission.
period in a simpler way as routine. For example, information tracing, security checks, and
socially distanced dining in public places are still required. Wearing masks is not neces-
sary in open areas, but is required in closed gatherings like classrooms or meetings. Epi-
demic prevention in customs, markets, restaurants, construction sites, schools, and hotels is
still the focus. To ensure the safety of resuming school and work, health departments have
systematic and standardized requirements of key areas, such as confined spaces and dor-
mitories. At the same time, the health and food safety departments have strengthened the
investigation of and prevention of contamination in the entire food supply chain. Cross-
regional population flow is strictly supervised and managed by the combination of big
data supervision and mobile terminals. Additionally, the different mobile monitoring apps

in different regions have been integrated to improve the traffic efficiency. Nucleic acid de-
tection has been incorporated into the normal project of the routine prevention system of
expanding testing agency resources and ensuring test quality and efficiency.
Accurately blocking the transmission channel and implementing containment measures

quickly were crucial to China’s success in fighting COVID-19. The staff of the Xinfadi
market and people who had close contact with the market were investigated quickly. Nu-
cleic acid detection, centralized isolation, home observation, and health monitoring were
all implemented.
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Large-scale nucleic acid detection was necessary to prevent the disease from spreading
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quickly. The detection effort was organized and carried out with the strong support of
municipal medical units and partner districts, basically realizing the full coverage of the
whole region. Because of the limited number of testing sites and test kits, the Beijing Health
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Department opened up a number of new locations for testing and adopted the policy of
classified management of targeted and non-targeted testing groups. For the key areas and
groups that must be tested, unified door-to-door testing was carried out. At the same time,
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the department adopted the use of one kit in groups of five people and many medical in-
stitutions provided drive-through testing, which greatly improves detection efficiency.
Seventy-eight observation points were set up for centralized isolation, and transporta-
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tion of the quarantined individuals was conducted under specific procedures to prevent
transmission in transit. From 7 to 16 July, more than 11,000 quarantined people were trans-
ported in and out of Fengtai.
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Each of these quick response measures could not have been implemented without the or-
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ganization and cooperation of grassroots officials. Nearly 6,000 cadres were transferred to
the community, and 450 cadres from government departments, enterprises, and institu-
tions were successively dispatched to Fengtai. With streets and towns as the “prevention
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and control unit” and communities (villages) as the basic starting point, the district divided
the area into different risk levels, formulated corresponding prevention and control poli-
cies, and made dynamic adjustments according to the development of and changes in the
epidemic situation. All the districts in the region strengthened their technical prevention
measures, and the high-risk areas carried out unified and close management, home obser-
vation, and internal and external disinfection of the environment, effectively blocking the
transmission path of the virus. Service support teams, including material support, express
delivery, and medical service delivery, were established to ensure that their basic needs
were provided to the residents. In line with comprehensive and professional management,
humanitarian care and personalized follow-up service were provided for quarantined
people by community staff and volunteers. They provided basic necessities and medical
materials and psychological counseling and solved problems that were encountered, par-
ticularly for the elderly, poor, and disabled.

4. China’s economic recovery
4.1 China’s economy during COVID-19

The Chinese economy was seriously affected and greatly challenged by the COVID-19 epi-
demic, struck by the trade war with the United States (Guo et al. 2018; Liu and Woo 2018;
Yu 2018). The economy also displayed strong vitality, as it has recovered rapidly from the
regression, despite huge international uncertainty and volatility. Statistics from the China
Statistical Bureau show that although China’s GDP decreased by 6.8 percent in the first
quarter, and the first half-year GDP growth averaged 1.6 percent, but it soon recovered in
the second quarter to an increase of 3.2 percent. These growth rates dramatically exceed
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the 1.2 percent projection of the IMF and are much better than the performance of many
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other countries.
Different sectors experienced different degrees of decline during the epidemic, among
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which the secondary industry suffered the most. The main reasons may have been the de-
cline in world demand as well as the labor supply, due to the strict control of population
mobility in the phase of the rapid increase of the disease. Decomposing the GDP growth
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rate shows that the output of primary industry dropped by 3.2 percent, secondary industry
by 9.6 percent, and tertiary industry by 5.2 percent. This is highly consistent with the fact
that the epidemic prevented workers from moving back to industrial cities and postponed
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the resumption of manufacturing, while labor in the agriculture sector remained in the ru-
ral areas, which alleviated the damage. As China is the world’s factory, the large decline in
the secondary industry had a serious impact on China and the world economy. The slow-
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down in the tertiary industry was more mild, partly due to the switch from offline services,
like catering and entertainment, to online modes. The information industry represented
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by online business apps prospered during the epidemic, with a GDP growth rate of 13.2
percent. The financial industry increased by 6 percent, which also helped to mitigate the
negative impact on the tertiary industry.
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The third and the fourth quarters are a critical period for China’s economic performance
in 2020. With a highly likely average growth rate of about 6 percent in these two quarters,
China would experience an annual growth rate of about 2 percent. Thus, the Chinese econ-
omy is promptly recovering from the damage of the epidemic. The industrial value-added
growth rate, particularly that of high-end manufacturing industries, has returned to its
corresponding level in June 2019. Firms that are above a designated size (annual sales of
RMB 20 million3 ), which are the major contributors to economic growth, experienced a
fall of 13.5 percent in the first two months of this year, but they soon rebounded to reach a
growth rate of 4.4 percent in the second quarter. Among all the industries, the high-tech,
3 US$1 is around RMB 7.

equipment manufacturing, integrated electrical apparatus, industrial robots, and informa-

tion transmission and software industries have achieved accelerated growth, enjoying a
blessing in disguise. Although the output of the tertiary industry dropped by 1.6 percent in
the first quarter, it increased by 1.9 percent in the second quarter. It is also noteworthy that
as an important indicator of economic activity, the manufacturing Purchasing Managers
Index has remained higher than 50 percent over the past five months. In sharp contrast to
China, U.S. GDP decreased by 30 percent on average month-to-month in the second quar-
ter of this year, and the recession was even more considerable compared with the same
period last year, reaching the lowest level of growth rate since 1947.
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Investment, consumption, and trade, respectively, contributed 58, 31, and 11 percent of
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China’s GDP growth last year. As the major impetus to economic growth, investment in
traditional infrastructure has declined, but high-tech investment is on the rise, mainly fo-
cused on the medical manufacturing industry and e-commerce. This is largely encouraged
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by the policy of accelerating investment in new infrastructure projects, which authorities
put in place to arrest the economic slowdown.
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Imports and exports were hit hard by the epidemic, but they will soon be back on the road
to recovery. China’s imports fell by 4 percent year-on-year in the first two months of the
year and rose by 2.4 percent in March. Exports fell drastically in January and February,
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with a sharp decreased of 17.2 percent in February; however, they returned to a mild de-
crease of 3.5 percent in March. This led to a significant decline of 11.7 percent in exports for
the first quarter and 0.7 percent in imports. However, in contrast to an average fall of 12
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percent in other countries, China’s import and export volume, totaling RMB 14.2 trillion,
fell by only 3.2 percent in the first half of the year. The RMB 7.7 trillion of exports enabled
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China to maintain a large surplus of RMB 1.2 trillion, which will probably grow in the sec-
ond half of the year given that last year’s surplus reached RMB 2.9 trillion. Among all prod-
ucts, exports of final consumption goods, integrated electrical appliances, and medical
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devices are on an upswing. Private enterprises are becoming the driving force of exports.
Among all trading partners, ASEAN countries have replaced the EU as China’s largest
trading partner, and Belt & Road countries are absorbing an increasing proportion of the
roughly 30 percent of China’s total exports (Figure 8).
4.2 Government policies and economic recovery

After a tough time in the first quarter, the Chinese economy recovered to a growth tra-
jectory. Despite the international economic environment still being in a harsh situation,
the Chinese government launched several policies to foster economic activation, raise
public confidence, and stabilize employment. Positive monetary and fiscal policies have
been implemented to strengthen employment, financial markets, foreign and domestic in-
vestment, and public expectations. Particularly in April, policies targeting employment,
people’s livelihoods, the functioning of the market, food and energy safety, production

Figure 8. Chinese economy during COVID-19
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Source: Chinese Statistical Bureau.

chains, and the work of grassroot institutions emphasized the guiding principles of the
central government.
Fiscal and monetary policies On 4 March, the People’s Bank of China stressed that it
would aim to stabilize market expectations and increase aggregate economic activity
through prudent monetary policy. Specifically, the initiatives include releasing the po-
tential of the loan prime rate, issuing RMB 300 billion in special refinancing to promote the
development of advanced manufacturing industry, poverty alleviation and employment
promotion, and vigorous support for micro and small enterprises through the rediscount
of RMB 500 billion in refinancing. The monetary policy emphasizes more flexible, moder-
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ate, and accurate positioning and maintains reasonable growth of the money supply and
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scale of social financing to ensure the flow of new financing to manufacturing industries
and to micro enterprises and SMEs.
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Fiscal policies are one of the most effective approaches to combat recession and stimu-
late social demand through government expenditure and reduced government income.
China’s fiscal revenue last year was RMB 19.7 trillion, and the budget deficit in 2020 is es-
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timated to be RMB 3.76 trillion, with a deficit rate of 3.6 percent. Thus, the deficit is still
within a safe and controllable range, unlike that of the United States and India. In addi-
tion, the government will issue RMB 1 trillion in special Treasury bonds and RMB 3.75
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trillion in special bonds, an increase of RMB 1.6 trillion over last year. Fiscal expenditure in
2020 will go mainly to the following areas. First, about RMB 2 trillion will be transferred to
grassroots units at the county level. Second, fiscal expenditure will be used to encourage
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employment, ensure the livelihoods of residents, support enterprises, and maintain the
operation of the market. Third, taxes and fees, the value-added tax rate, and the endow-
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ment insurance tax rate are expected to be reduced by about RMB 2.5 trillion. Fourth, the
rent interest of enterprises will be reduced; for example, loan repayments of SMEs will be
extended to March 2021. Fifth, local government special bonds will be used for the con-
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struction of new infrastructure, new urbanization, transportation, water conservation, and

other major projects. For example, the bonds will be used to encourage the development
of commercial 5G technology, artificial intelligence, and new energy industries; rebuild
39,000 old urban residential areas; and provide RMB 100 billion to increase the capital for
railway construction. Steady monetary policy and reductions in taxes and fees will increase
residents’ disposable income, assist the survival of SMEs, and expand consumer demand.
New urbanization will drive investment and consumption demand and promote the ur-
banization and integrated development of metropolitan areas.
To support the prevention of the epidemic, especially to protect people’s health and safety,
the Ministry of Finance, together with the relevant departments, has issued a series of poli-
cies and measures. These include the subsidies for patients’ treatment expenses and tem-
porary work subsidies for frontline medical personnel, funds for epidemic prevention, and

strengthened allocation of treasury funds. The COVID-19 infection prevention policy was
promulgated on 25 January, the personal income tax policy regarding the epidemic was
announced in early February, and more than RMB 140 billion in funds for epidemic pre-
vention and control were allocated by mid April. Funds for epidemic prevention and con-
trol in various regions were also guaranteed. Fiscal policy efforts have reduced the costs for
patients. The personal part of the medical expenditure of confirmed cases is subsidized by
public finance after basic medical insurance, illness insurance, and medical assistance are
paid according to the regulations.
The funds needed are paid by local and central governments through a subsidy to the lo-
f
cal budget of 60 percent of the actual expenses incurred. The central government issued
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transfer payment funds in a timely fashion. At the county level, RMB 70 billion in balanced
transfer payments and 40.6 billion in subsidies for the basic financial security mechanism
have been allocated to enhance local financial systems and support local governments to
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prevent the epidemic as well as guarantee basic livelihood. At the same time, part of the
central infrastructure investment funds was allocated to encourage the resumption of pro-
duction, stabilize the economy, and promote development.
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To reduce business costs and the cost of living, strong measures have been implemented,
reducing the value-added tax for micro and small enterprises and individual businesses
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and providing tax reductions and exemptions for industries and enterprises that have been
greatly affected by the epidemic, according to the policies jointly issued by several gov-
ernment departments. For instance, small-scale taxpayers in Hubei are exempted from
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the value-added tax at a 3 percent levy rate, and other regions at a reduced rate of 1 per-
cent. Further, the maximum carrying forward period has been extended from five to eight
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years in some regions in 2020. Property tax and urban land use tax exemptions have been
granted to enterprises in industries that were greatly affected by the epidemic, including
transportation, catering, accommodation, and tourism. Policies on periodic reduction and
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exemption of enterprise social security contributions and deferment of payment of housing

accumulation funds were also introduced to reduce the burden on enterprises and indi-
viduals. During the first half of the year, a total of RMB 600 billion in social security fees for
the elderly, unemployment, and work-related injuries were reduced. All of these reduction
and exemption policies, together with additional measures, such as a tax reduction on au-
tomobiles, road toll exemptions, and electricity and gas price reductions for business use,
lighten the burden on enterprises and help to activate businesses.
In addition to reducing the tax burden, issuing special treasury bonds and raising the tar-
get rate of the fiscal deficit are strong supportive measures. Since the special treasury bonds
are off budget funds, this action required only a relatively simple approval process. The
bonds can be issued flexibly and within a short time to raise government funds quickly
to supplement and support epidemic control and economic recovery. Local governments

have also issued a large number of treasury bonds, including regular bonds and special
bonds, which are for transportation infrastructure, agriculture, forestry and water conser-
vancy, industrial parks, and other major infrastructure projects. Cooperation with private
capital through special funds for investment in large projects, such as airports and other
infrastructure, has been launched in some cities to encourage investment while revitalizing
the idle capital in the private sector.
Policies in favor of SMEs Joint policies have been issued on the epidemic,4 proposing
more than 30 measures to support the economy, especially SMEs. The government will
effectively reduce the survival and operating costs of SMEs by means of providing refi-
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nancing and rediscounts, reducing taxes and fees, delaying the payment of social security
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contributions, and reducing rent. It will encourage the development of SMEs through mul-
tichannel actions, by providing special support to enterprises and industries in areas that
were severely hit by the epidemic, and building industrial parks. Local policies have also
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been issued to support SMEs, to tide them over the difficulties, mainly in the areas of finan-
cial and credit support, rent and tax deductions, and job stability.
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Several cities have established credit policies, emphasizing that loans to enterprises that
have had operational difficulties caused by the epidemic situation should not be blindly
withdrawn or cut off. To reduce the financing costs of enterprises, the policies encourage
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banks and other financial institutions to reduce loan interest rates or adjust the floating
level, extend loans, deduct or exempt interest, and adjust repayment schedules for SMEs.
Various policies have been proposed that enterprises’ credit balances should not be re-
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duced in 2020. Financial institutions and banks were encouraged to improve and accelerate
the process of loan approvals. Some regions have proposed granting interest rate subsi-
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dies to small loan companies and financing to guarantee companies, and increasing the
financing support for micro, small- and medium-size enterprises. In Ningbo, new loans
are provided to key enterprises for epidemic prevention and control at the refinance rate
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of the People’s Bank of China. Yancheng has set up a credit guarantee fund of RMB 600
million for SMEs.
To reduce the cost of business and discourage layoffs, the collection of social security con-
tributions was postponed in most regions. Enterprises that have not laid off workers would
receive a 50 percent rebate on unemployment insurance premiums paid in the past year in
some regions, such as Jiangsu and Shanghai. Ningbo also announced a temporarily down-
ward float of the premium rates of social insurance, basic pension insurance, and medical
insurance. SMEs experiencing difficulties could apply for a reduction in the proportion
of the housing provident fund deposit, and they can apply to delay the payment in some
4 On 1 February, policies for COVID-19 infection epidemic prevention were issued jointly by the
People’s Bank of China, the Ministry of Finance, the Banking Regulatory Commission, the Securi-
ties Regulatory Commission, and the Foreign Exchange Bureau.

regions. Property tax and land use tax were also reduced or exempt for enterprises that
were seriously affected by the epidemic. Some regions initiated inclusive tax reductions
for SMEs, and the payment may be delayed for at most three months. Firms renting stated-
owned and collective-owned properties were exempt from or given reduced rental fees for
one to three months; industrial parks and technology incubators were also encouraged to
reduce rental fees for those firms.
Local supporting policies and work resumption rate Various cities have issued sup-
portive follow-up policies and measures to reduce the burden on enterprises, stabilize
employment, and ensure people’s livelihoods. Beijing has issued 19 supporting policies,
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emphasizing government service from five aspects, including approval, financial support,
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business services, fostering innovation, and city operation. Innovation in epidemic preven-
tion is highly encouraged. Preferential policies are granted to enterprises engaged in the
research and development of anti-COVID-19 drugs, tackling key technical problems and
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epidemic prevention materials. Green channels were opened for production, procurement,
import, funding, and foreign exchange processing of epidemic-related materials. A special
fund pool has been established to increase credit support for enterprises and individuals
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who have been severely affected by the epidemic, with the central bank’s help in special
refinancing. By way of subsidies and discounted rental rates for factories and markets, the
operation of SMEs is well resumed.
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Suzhou (the capital of Jiangsu Province) issued the Suzhou 10 Rules focusing on the three
aspects of increasing financial support, stabilizing the workforce, and reducing the burden
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on enterprises. In particular, unemployment insurance is partly returned to reduce layoffs

and maintain employment, and an SME park is also emphasized to support the agglomer-
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ation of medium-size enterprises. Shanghai also announced that it would postpone the ad-
justment of the social security payment base, which is expected to reduce the social security
payment burden by RMB 10.1 billion. Compared with other cities, Shanghai has a wider
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policy audience providing all-round support to enterprises to tide them over difficulties
by reducing fees, delaying payments, and increasing subsidies. For example, companies
with employees that participate in various online vocational training during the shutdown
period would receive a 95 percent subsidy of the actual training cost.
Through epidemic control and stimulus packages, all parts of the country finally started
to resume work after having been suspended for over a month (Figure 9). As an important
foundation of the national economy, the primary and secondary industries have resumed
work. Baidu Maps released the index of work resumption of major cities in China. Accord-
ing to these data, by late February, the number of people returning to work in each city was
less than 40 percent of that before the epidemic. Under the influence of favorable policies,
cities with production in infrastructure, processing, and manufacturing industries as their
pillar industries performed well. According to the ranking of the return-to-work index for

Figure 9. Return-to-work index of cities
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Source: Baidu Co. The return-to-work index is calculated as the active working population after the Spring Festival divided by the benchmark
working population in December 2019.
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major cities, Shenyang, one of the country’s foremost heavy industry bases, ranked first, at
37.27 percent; followed by Qingdao, an international port city; and Shanghai, the national
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economic development center. In addition to the first-tier cities, which have the highest
return-to-work rates, Dongguan, a neighbor of Shenzhen, and Ningbo and Suzhou, the
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capital cities in the Yangtze River Delta, also have return-to-work rates that are higher than
30 percent, all of which are emerging cities in the processing and manufacturing industries.
Affected by the epidemic situation, Wuhan’s return-to-work index was only 12.23 percent.
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The “work-at-home” mode brought about by Internet tools has also delayed people return-
ing to work, particularly in Hangzhou, Beijing, and Shenzhen, where the Internet industry
is concentrated.
5. Conclusion
This paper has described China’s experience in fighting the COVID-19 pandemic during
2020, how the Chinese economy has responded to the shock of the pandemic, and the ma-
jor measures the country has taken to boost economic recovery. The spread of COVID-19
during January and February was severe all over the country, which led the government
to quickly shut down the channels of transmission and allocated medical and other re-
sources to the affected areas. These actions were key for getting the outbreak under con-
trol. Having learned from past experience and by implementing standardized disease

prevention practices, China rapidly halted the second wave of COVID-19 in Beijing in June.
That outbreak was under control in less than one month, with the quick response of the
professional teams and the cooperation of the whole city and the Chinese people.
Although the pandemic has seriously affected China’s economy, it is already on the road
to recovery. The growth rate declined drastically in the first quarter, but it has rebounded
since the second quarter. Monetary and fiscal policies are recharging local economies, cre-
ating jobs, and injecting fresh impetus to firms that were seriously hit by the epidemic.
These policies include quantitative easing, increasing fiscal expenditure, and integrating
social capital. Together with the routine epidemic prevention procedures, these measures
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help to lighten the burden on SMEs, save jobs, and boost investment in new infrastructure
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and high-tech industries. Most factories have resumed production and the service and en-
tertainment industries are also returning to normal, suggesting a promising outcome of the
policies that were put in place to respond to the COVID-19 pandemic. There is reason for
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having confidence in the Chinese economy for the rest of the year.
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Comments on How China Managed the
COVID-19 Pandemic
Liming Wang, University College Dublin: The paper presents a comprehensive

overview of China’s experience of fighting the COVID-19 pandemic in 2020. Following a
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chronological review of the major measures the Chinese government took to prevent the
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spread of the epidemic, as well as to boost the country’s economic recovery, the author
concludes that China has responded in a timely and effective manner to halt the spread of
the pandemic and to accelerate economic recovery afterwards. According to the available
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evidence and data, mainly from official sources, the author believes that China’s economy
is on the road to recovery due to both monetary and fiscal policies, adopted to respond to
the COVID-19 pandemic, with promising outcomes already indicated.
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The paper is well written and structured. It makes a timely and valuable contribution to
ongoing efforts in fighting the COVID-19 pandemic worldwide. However, I would like to
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draw the author’s attention to the following aspects for the benefit of readers.
First, it might be most disappointing for readers that China’s experience in fighting the
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COVID-19 pandemic is not reviewed in a global context with comparative perspectives,

although the paper has merits in presenting China’s case separately. Across the world at
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present, views on how China has handled the pandemic are truly diverse among people
with different perspectives and from different countries, especially between those within
and those outside China. According to a new Pew Research Center survey in 14 countries
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with advanced economies,1 a median of 61 percent think that China has done a bad job in
handling the outbreak (Silver et al. 2020). As shown in Figure 1, the negative view of China
is greater than, say, the view of how the COVID-19 pandemic was handled by their own
country or by the World Health Organization (WHO) or the EU (apart from the United
States). The rise in unfavorable opinion comes amid widespread criticism over how China
has handled the pandemic.
Outside of China, we have unfortunately witnessed increased criticism of China, and

attacks by western politicians, led by the U.S. government. As Richard Horton2 rightly
pointed out, the scale of anti-China reaction is disproportionate to the reality of courageous
1 Those countries include France, Japan, Italy, Australia, the United Kingdom, Germany, the Nether-
lands, Sweden, the United States, South Korea, Spain, Canada, Belgium, and Denmark.
2 Richard Horton is a doctor and edits the Lancet.
Asian Economic Papers 20:1 © 2021 by the Asian Economic Panel and the Massachusetts Institute of
Technology
Comments
Figure 1. International view of the handling of the COVID-19 pandemic
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Source: Silver et al. (2020).

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contributions made by Chinese scientists to our global understanding of this pandemic.

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In December 2019, Chinese doctors quickly reported the outbreak of a novel coronavirus
to the Chinese government who warned the world in January 2020. Western democracies
failed to listen to those warnings. The Chinese government needs to answer certain ques-
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tions like why it took a whole month to alert the world to the risks of a highly contagious
new epidemic, but to blame China for this pandemic is to rewrite the history of COVID-19
and minimize the failings of western nations (Horton 2020). In 2020, the COVID-19 pan-
demic started in Wuhan, China, and then quickly spread to all countries throughout the
world like wildfire, devastating millions of lives in the process. This presents a test for all
governments on how to respond and handle public health emergencies. The only differ-
ence is that China was facing a closed-book exam, while other countries have open-book
exams. The failures in this exam may be attributed to many factors but share one thing in
common—the hubris and prejudice of human beings.
Second, the author argues convincingly, supported by facts and evidence, that the actions
and measures adopted by the Chinese government were effective and successful in re-
sponding to the COVID-19 pandemic. Regarding the analysis, however, one would expect

Comments
Table 1. China’s National Day (1st October) tour trips in selected years
Year Number of tourists (100 million) Tourism revenue (100 million RMB)
2017 7.05 5836.0
2018 7.26 5990.8
2019 7.82 6497.1
2020 6.37 4665.6
Source: Ministry of Culture and Tourism of the People’s Republic of China.
to learn the underlying reasons why China has been relatively successful in implementing
strict physical distancing policies to reduce socializing and in mobilizing medical resources
across the country to fight the pandemic. More in-depth analysis is required to answer
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these questions. China is different from other countries, such as the United States, and has
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comparative advantages in handling such an emergency, with its unique institutional set-
tings of omnipresent government control and cultural traditions and values dominated by
Confucianism. In terms of institutions, the governance capacity and power of central gov-
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ernment in China is reinforced and enhanced by its party and administrative systems all
the way down to the grassroots level (i.e., rural villages and urban street/neighborhood
committees). In their cultural traditions, Chinese people are very influenced by Confucian-
ed
ism and tend to respect and cooperate with state government and authority at all levels,
especially during this pandemic. According to Confucius, the state is but an extension of
the family and its ruler is the patriarchal father of his people. Chinese people have lived in
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and experienced an agricultural society for thousands of years in which individual peasant
households always needed protection from a powerful centralized government. Long-
lasting features such as excessive reliance on the state for the provision of public goods
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and government control of resources are largely consistent with China’s historic record
of state development (Zheng and Wang 2015). Therefore, individualism and liberalism—
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whether it is the curse or nightmare of fighting the pandemic—are relatively limited in

Chinese thinking.
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Third, Section 4 of the paper indicates that the Chinese economy has displayed strong vi-
tality and recovered rapidly, despite huge international uncertainty and volatility. The
author’s assessment and evaluation are mainly reliant on statistics and data from official
sources (e.g., the China Statistics Bureau). However, it would be more convincing or inter-
esting if a Keqiang index3 was presented to measure China.fs economy, especially relating
to its industrial economy. Table 1 shows an alternative measure of gauging the Chinese
service sector’s economic recovery. During National Day in 2020, China received 637 mil-
lion tourists, a recovery of 79.0 percent year-on-year. With a total of 466.56 billion yuan in
tourism revenue, a 69.9 percent year-on-year recovery was achieved.
3 The Keqiang index is an economic measurement index using three indicators, i.e., electricity con-
sumption, railway freight, and bank loans, as more reliable indicators. However, it makes a lot
of sense when applied to China’s industrial economy rather than its growing services economy
(Cai 2016).

Comments
References
Cai, Peter. 2016. The Li Keqiang Index is dead, long live the new Li Keqiang Index. Available at www.
lowyinstitute.org/the-interpreter/li-keqiang-index-dead-long-live-new-li-keqiang-index.
Horton, Richard. 2020. This Wave of Anti-China Feeling Masks the West’s Own COVID-
19 Failures. Guardian. Available at www.theguardian.com/commentisfree/2020/aug/03/
COVID-19-cold-war-china-western-governments-international-peace.
Silver, Laura, Kat Devlin, and Christine Huang. 2020. Unfavorable Views of China Reach His-
toric Highs in Many Countries. Available at www.pewresearch.org/global/2020/10/06/
unfavorable-views-of-china-reach-historic-highs-in-many-countries/.
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Zheng, Jinghai and Liming Wang. 2015. Institutions and Development: The Case of China in Compar-
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ative Perspectives. Emerging Markets Finance and Trade 50(6):4–20.
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Comments on How China Managed the
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COVID-19 Pandemic
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Wang Xiaolu, National Economic Research Institute: This paper convinc-

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ingly presents data to describe in detail the outbreak of COVID-19 in China in the first half
of 2020, outlines the response measures taken by the government and the private sector,
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evaluates the effects of these measures, and explains how China quickly controlled the epi-
demic and achieved both economic and social recovery.
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Official statistics show that as of 31 October, there are a total of 91,931 confirmed COVID-19
patients nationwide, with 4,746 deaths, 86,671 recoveries, and only 514 patients who are
still in hospital (CCTV News, 1 November 2020).
Aside from minor outbreaks in Qingdao and Kashgar in October that were quickly con-
tained, economic and social activities throughout the country have returned to normal
since the third quarter of the year. According to the National Bureau of Statistics, China’s
cumulative GDP in quarters 1–3 recorded a positive growth of 0.7 percent from the previ-
ous year, becoming the only major economy in the world to achieve positive growth.
This situation suggests that China has performed far better than most countries in terms
of epidemic control and economic recovery. This may seem too good to be true to some,
however. The following comments will focus on a few questions:

Comments
Question 1: How trustworthy are the data provided by the paper and other official gov-
ernment sources on the epidemic situation in China?
As mentioned in the paper, China’s first COVID-19 case was discovered in Wuhan in late
December 2019. The author believes that the initial rapid increase in infections in Wuhan
could be attributed to a lack of information and an underestimation of the seriousness of
the disease. This inference is reasonable. Moreover, because local authorities were slow to
react to the initial outbreak, Wuhan officials might have missed the opportunity to quickly
nip the epidemic in the bud. The lack of transparency in information sharing at the time
may also have caused some data distortion.
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But China quickly learned a lesson from these mistakes. Since 23 January, the central gov-
ernment intervened and implemented a strict lockdown in Wuhan. At the same time, var-
ious regions initiated different levels of emergency response procedures according to the
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severity of their situation. Epidemic information is now directly reported by local Chi-
nese Center for Disease Control and Prevention branches to the National Health Com-
mission, bypassing local governments. The direct reporting mechanism basically elimi-
ed
nates the motivation of local authorities to conceal information and centralizes knowledge
effectively and efficiently to coordinate pandemic response policies. This has greatly in-
creased the transparency of information, leading also to significant improvements in the
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epidemiological situation.
The epidemic information announced since late January can therefore be considered cred-
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ible. The cumulative number of confirmed cases and total number of deaths may be less
accurate than daily new incremental data to some extent due to earlier inaccurate report-
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ing or incomplete testing in January, but any discrepancy should be limited. In addition,
because the virus is highly contagious and spreads quickly, efforts to conceal information
would not last long and would quickly become meaningless.
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Since the third quarter of 2020, economic operations have been restored across the whole
country. Residents’ lives have all resumed, aside from the need to continue to wear face
masks in crowded public areas. During the National Day and Mid-Autumn Festival hol-
idays from 1–7 October 2020, railways, highways, waterways, and airlines transported
over 500 million people without any major new outbreaks except a small number of cases
in Qingdao and Kashgar. From April until October, the daily new confirmed cases in the
whole country remained in single or double digits, mostly entrants from overseas. This
return to normalcy would not have been achieved if information on the pandemic was
not centralized.
Question 2: What is the role of government in the response to containing epidemics

and pandemics?

Comments
The paper by Wei Tian has actually provided the answer through its detailed descriptions
of the Chinese government’s actions in response to COVID-19. In dealing with major ex-
traordinary events such as COVID-19, reasonably strong government intervention is in-
dispensable, and this has shown its effectiveness in China. After the COVID-19 outbreak
in Wuhan in January, the government quickly imposed lockdown measures on Wuhan,
strictly restricting the entry and exit of people and instructing residents to self-isolate at
home. Local governments at all levels organized communities and volunteers to provide
food and other necessities via home delivery services. Medical teams comprising more
than 40,000 doctors and nurses from all over the country were sent to Wuhan. At the same
time, two large, specialized hospitals were built in Wuhan within 20 days, while 16 large
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public facilities were urgently transformed into shelter hospitals to treat mild patients and
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isolate asymptomatic patients.
In other parts of the country, schools, manufacturing firms, public entertainment outlets,
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education and training institutions, and other non-essential commercial service facilities
were temporarily closed. Residents were only allowed to go out for essential activities and
were required to wear masks in public areas. Food catering, store shopping, classes, and
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training conferences moved online. Meanwhile, the production of medical supplies such
as face masks, disinfectants, protective clothing, and respirators were urgently arranged.
Personnel contact was minimized and the spread of the virus was soon suppressed.
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The adoption of these measures has indeed incurred high costs. The economy stalled in
the first quarter and residents’ lives were disrupted. However, in hindsight, these decisive
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measures greatly reduced or interrupted the spread of the disease at the time.
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These measures received severe criticism at the time, mainly from overseas, for restricting
personal freedom and violating human rights, at huge economic costs. However, the tem-
porary inconvenience experienced has significantly reduced illnesses, saved lives, and led
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to rapid economic recovery. Compared with the 9 million infections and 229,000 deaths
in the United States so far as of 31 October 2020, the price China paid in exchange for only
91,000 infections and several thousand deaths is worth it. Given that China’s population is
four times that of the United States, this comparison becomes more compelling.
On the other hand, China’s anti-pandemic performance has sparked other debates and dis-
cussions. For example, some in China argue that China’s success on both economic and
health outcomes proves that a system with strong government intervention has special ad-
vantages in general. They believe that the so-called whole nation system can be extended
from extraordinary emergencies such as COVID-19, to all economic and social fields. This
is obviously misleading. China’s achievements in response to the virus does not mean that
the role of the market can be replaced by the government. In fact, China’s economic suc-
cess during the past 40 years should be attributed to the reforms that transformed China

Comments
from a centrally planned economy to a market economy. A fair and competitive market is
an irreplaceable basic condition for economic success. Only in areas where the market fails
and in the event of extraordinary circumstances that government interventions are neces-
sary. If government interventions exceed reasonable boundaries, it would inevitably lead
to inefficiency and economic non-sustainability.
Question 3: Is the success of China’s epidemic control entirely dependent on the role of
the government?
No. The active cooperation of Chinese society and the sacrificial spirit of many individuals
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are important and indispensable. When the virus first broke out in Wuhan, 395 medical
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teams were organized in various regions of the country and sent to Wuhan and other cities
in Hubei province to help fight the epidemic. Despite the risk of infection and the lack of
information and protective equipment, 43,060 doctors and nurses rushed to the epidemic
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area (Tencent News, 9 March 2020). This played a decisive role in reversing the Wuhan
crisis, and could not have been done without the social responsibility of these individuals.
ed
During the epidemic, although many economic activities were halted, public utilities and
the production, sales, and distribution of medical supplies, food, and other daily necessi-
ties continued to operate. Millions of volunteers across the country participated in produc-
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ing a huge number of masks, disinfectants, respirators, and protective gear, not only for
domestic needs, but also exported to many countries across the world to support their fight
against the disease.
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During the lockdown of Wuhan and other cities experiencing sever outbreaks, residents
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suffered considerable inconveniences, but these strict control measures received strong
public support. During the epidemic, residents could be seen strictly abiding with the
requirement to wear face masks in public areas. This is in sharp contrast to the situation
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in other countries where non-compliance and even protests occurred over the issue of
mask wearing.
The act of mask wearing is just a small inconvenience, but reduces the individual’s risk of
infection while also protecting others. Compliance with regulations is a form of social re-
sponsibility that goes beyond self-interest. For a healthy society, the individual freedom of
citizens is indispensable, but equally indispensable is the collective concern of individuals
for public interests.

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How China Managed the COVID-19

Table 1. Summary of COVID-19 cases in China (by 2 July 2020)

102 Asian Economic Papers

Figure 1. Trend of COVID-19 in China and Hubei Province

Source: National Health Commission of the People’s Republic of China.

103 Asian Economic Papers

Figure 2. Trend of new close contacts in China and Hubei Province

104 Asian Economic Papers

105 Asian Economic Papers

stimulate the economy. Section 5 concludes the paper.

2. Background of COVID-19 and major measures

2.1 Mobility control and COVID-19 in China

106 Asian Economic Papers

Table 2. Migration from Wuhan during the Spring Festival, by destination

107 Asian Economic Papers

Figure 3. Trend of migration from Wuhan during the Spring Festival

To decrease population mobility nationwide, the government implemented a series of

108 Asian Economic Papers

Figure 4. Number of doctors per 10,000 people

2.2 Reallocation of medical resources and COVID-19 in China

109 Asian Economic Papers

Table 3. Medical resources in Hubei Province

Tianmen 1292.0 0.71 0.70 4.27 4.19 2.15

110 Asian Economic Papers

111 Asian Economic Papers

Table 4. Survey of medical staff participation in response to COVID-19 (%)

3. Second wave of COVID-19 in Beijing

3.1 Picture of the second wave in Beijing

112 Asian Economic Papers

Figure 5. Distribution of confirmed cases in the second wave of COVID-19 in Beijing

Source: National Health Commission of the People’s Republic of China.

113 Asian Economic Papers

Figure 6. Daily incremental confirmed cases in Beijing

3.2 Major measures and quick response

was found on 11 June, a team of professionals immediately started to conduct a detailed

114 Asian Economic Papers

115 Asian Economic Papers

116 Asian Economic Papers

Accurately blocking the transmission channel and implementing containment measures

117 Asian Economic Papers

4. China’s economic recovery

4.1 China’s economy during COVID-19

3 US$1 is around RMB 7.

118 Asian Economic Papers

equipment manufacturing, integrated electrical apparatus, industrial robots, and informa-

4.2 Government policies and economic recovery

119 Asian Economic Papers

Figure 8. Chinese economy during COVID-19

Source: Chinese Statistical Bureau.

120 Asian Economic Papers

struction of new infrastructure, new urbanization, transportation, water conservation, and

121 Asian Economic Papers

exemption of enterprise social security contributions and deferment of payment of housing

122 Asian Economic Papers

123 Asian Economic Papers

on enterprises. In particular, unemployment insurance is partly returned to reduce layoffs

124 Asian Economic Papers

Figure 9. Return-to-work index of cities

125 Asian Economic Papers

Working Paper, Harvard University.

the Disclosure of COVID-19 Cases. NBER Working Paper No. 27220.

126 Asian Economic Papers