On the evening of March 18, 2020, the Tsinghua PBCSF Online Executive Education held the third lecture session for the month. Ju Jiandong, Unigroup Chair Professor at Tsinghua PBCSF lectured on “China-US trade disputes and restructuring of global order during an unprecedented pandemic in the century”.
Presently, the COVID-19 epidemic has been effectively contained in China, while it is showing a trend of spreading around the world. Facing the “unprecedented pandemic in the century”, Ju Jiandong put forward his analysis and countermeasures from the perspective of an economist in three aspects of epidemic, financial market and macro-economy to realize “optimal prevention and control”. He also shared his insights into the potential medium- and long-term impacts of the pandemic on the China-US economic and trade relations and the world order.
According to Ju, “optimal prevention and control” means that the cost and effect of epidemic prevention and control should be matched with each other. On the one hand, the epidemic has been effectively contained in China. Therefore, the marginal cost of easing the quarantine for domestic epidemic prevention is close to zero, but its economic benefits are enormous. He suggested reducing the intensity of domestic quarantine, resuming production as soon as possible, and stabilizing the economy. On the other hand, the spread of the epidemic in other countries has given rise to risks of imported cases. He believes that “the benefits of intensifying entry quarantine would outweigh the disadvantages thereof”. However, Ju holds that “easing domestic restrictions” does not mean an end to epidemic prevention and control; instead, a long-term prevention and control system comprising mechanisms at national, provincial and county levels can be put in place to achieve sustained prevention and control and steady economic growth. According to Ju, the best prevention and control strategy is to “apply strict border control and ease domestic control”.
The rapid spread of the epidemic overseas is likely to turn the global prevention and control into a long-term and phased effort. Ju believes that China’s victory against the epidemic in the initial stage has provided a data base for the scientific analysis of prevention and control measures, and indicated that it is totally possible for China to prevent and control the epidemic systematically. No matter how the pandemic develops outside of China, when the overseas risk is greater than the domestic risk to the strategy of “applying strict border control and easing domestic control” is the best choice while when it is the other way around, to “ease border control” is preferable. Ju believes that “easing domestic control” should be based on the effective operations of the three-level prevention and control system.
Recently, the international financial market has experienced severe fluctuations due to the impact of the pandemic. People are puzzled if this lead to a financial crisis and how should the Chinese market respond. Ju believes that “it is of uttermost importance for the financial market to prevent uncertainties”. The domestic capital market should also put in place effective firewalls, for which an alternative is to impose a progressive cross-border capital flow tax.
In regard to if the pandemic affect China-US economic and trade relations and the world order, Ju believed the general trend of the world towards a new order of pluralistic coexistence has not changed because of the epidemic, nor the United States has abandoned its strategy of containing China and dominating the world. The epidemic prevention and control, however, has indeed expanded the horizons and possibilities for China-US cooperation. He believes that China is still a developing country, “but the fight against the pandemic cannot proceed without upholding the concept of a community of shared future for mankind”. “At present, it is only ideal to establish a global cooperation system for epidemic prevention and control. But we can first establish cooperative relations in Asia, and open to other countries, to form an Asian health and economic community to fight the pandemic together,” said Ju.
