Commentary: China’s rise is still not a given

MELBOURNE: When discussing the rise of China, a sense of inevitability often pervades. 

China’s sheer population size and economic base will inevitably see it become the dominant regional power – or so the argument goes. China’s faster reopening from COVID-19 lockdowns has added to such arguments.

But just how far will China rise? Given the price tag of Australia’s new defence posture – and the significant opportunity costs at a time when COVID-19 will stretch budgets – it is worth still asking the question.

READ: Commentary: Is national security a good reason to ban TikTok?

READ: Commentary: Domestic politics may delay India’s truce with China

China’s social contract is built in part on the ability of party elites to provide prosperity, public goods and oversee national unity. The Communist Party  of China, which values maintaining power above all else, cannot safely ignore the bounds of this social contract.

Nationalism – and by extension achieving foreign policy goals – is arguably an increasingly important part of the social contract, but remains somewhat secondary.

What matters is that China is likely to have no shortage of stresses to its social contract. While China is by no means alone in facing significant future challenges, its ability to do so will be constrained by the fact that it is still a developing country.


The results of the One Child policy mean that China’s already ageing population may begin shrinking as soon as 2027. This is bad news for a government aiming to transition its economy towards domestic consumption.

The dependency ratio – effectively ratio of non-workers to workers – will increase substantially. China has few social safety nets to protect the elderly and may well “get old before it gets rich”.

An elderly man uses a magnifiying glass to see the description on a pack of medicine at a pharmacy
File Photo: An elderly man uses a magnifiying glass to see the description on a pack of medicine at a pharmacy in Dandong, Liaoning province, China. (Photo: REUTERS/Jacky Chen/File Photo)

An often overlooked challenge facing China is water security, especially with the impact of climate change. Up to 80 per cent of China’s water is concentrated in the country’s south, leaving significant population centres suffering from acute shortages.

Proposed solutions such as the US$70 billion South-North Water Diversion project are costly.

Pollution of groundwater aquifers, which up to two thirds of Chinese cities rely on for some or all of their water, has also become a serious health hazard. It will also be extremely expensive to fix.

The potential for unrest in frontier regions will divert resources away from military spending. China’s paramount leader Xi Jinping has left no stone unturned in his drive to ensure national unity by pacifying Xinjiang, Tibet and now Hong Kong.

China’s tactics are unlikely to determinatively quell unrest. Spending on domestic security outstripped the military budget in 2018 and will continue to be a significant burden.

READ: Commentary: The intractable tug of war between China and Hong Kong

READ: Commentary: Why are Chinese officials acting like Internet trolls and entertaining online fights with the US?

Combined with other pressing problems such as China’s inequality, grossly-uneven development and paltry social safety net, these issues will divert precious resources and attention away from China’s foreign policy ambitions.

China’s mountainous debt, reflecting a cheap debt-fuelled growth model focused on fixed assets, will also significantly constrain policymaker’s options.


This leaves Chinese foreign policy ambitions in a weaker position than is often assumed. China must also realise that destabilising measures will be met with an array of strategic and economic costs.

This matters, as it difficult to envisage a peaceful transition to Chinese hegemony. More costs will presumably have to be incurred.

Military vehicles carrying DF-26 ballistic missiles travel past Tiananmen Gate
Military vehicles carrying DF-26 ballistic missiles travel past Tiananmen Gate during a military parade to commemorate the 70th anniversary of the end of World War II in Beijing, on Sep 3, 2015. (Andy Wong/Pool via REUTERS/File Photo)

Consider the example of Taiwan, which remains the People’s Liberation Army’s “primary contingency” and a considerable drain on resources.

More fundamentally, even without the US, the Indo-Pacific is likely to be a crowded region, as Rory Medcalf aptly describes in his recent book.

The idea that the US will simply exit the region given its extensive interests, current posture and the importance of its superpower status to its national identity, is of course very debatable.

Together, India, Japan, Indonesia and Australia (leaving aside Vietnam and South Korea) – all countries that have various grievances with China – are projected by 2050 to have a combined population of 2.1 billion and GDP of almost US$64 trillion.

China will have 1.4 billion people and a GDP of about US$58 trillion.

READ: Commentary: China and India – the region’s twin growth engines – are stuttering

READ: Commentary: Embattled China knows its national priority is the economy

Of course, there is no guarantee that these countries will form alliance-type arrangements. China will try to prevent this, attempting to prosecute territorial disputes with each country in an individualised and favourable way.

This realisation alone should be enough for the region’s middle and emerging powers to cooperate in countering China. 

Of course, it is possible that China may somehow prove capable of maintaining its social contract while also achieving regional dominance, even in the face of concerted opposition. Defence policy is focused on insuring against worst-case scenarios.

Nonetheless, with precious dollars at stake, it is important that policymakers consider in depth these hinderances to China’s rise.

Henry Storey is an editor at Foreign Brief and currently works as an analyst for a political risk consultancy in Melbourne. This commentary first appeared on the Lowy Institute’s blog, The Interpreter.

Commentary: Look out for the oncoming great China-India split

LONDON: The Sino-Soviet split was a critical moment in the cold war. A Sino-Indian split could be just as crucial to the “second cold war” that seems to be developing between the US and China.

Until now, the Indian government, led by Prime Minister Narendra Modi, has tried to avoid choosing sides in the fast-developing antagonism between Washington and Beijing.

But a parting of the ways between India and China now seems inevitable following last week’s border clashes between the two nations’ armies, which left at least 20 Indian soldiers dead and an unknown number of Chinese casualties.

READ: China likely lost at least 40 soldiers in border clash: Indian minister

Mr Modi has met President Xi Jinping of China several times since becoming India’s leader in 2014 and has made five visits there.

As recently as last October, the Indian and Chinese leaders held a friendly summit, after which Mr Modi hailed “a new era of co-operation between our two countries”.

The mood in New Delhi is now very different. Whatever happened high up in the Himalayas, Indians feel assaulted and humiliated by China.

On Friday, Mr Modi held emergency meetings with leaders of the Indian opposition – a remarkable development in itself, given the extreme partisanship of Indian politics today.

READ: Commentary: China’s boundary skirmishes with India have wider economic and geopolitical implications


There is now near-consensus in the Indian policymaking elite that China is a hostile power and that India’s only feasible response is to move closer to the US and to Asian democracies, such as Japan and Australia.

Despite Mr Modi’s efforts to build a close relationship with Mr Xi, Indian anxiety about the rise of China has been growing for years. Indians have watched nervously as China has built up a special relationship with Pakistan – a country India has fought multiple wars with.

Armed encounters are frequent in the Himalayan region disputed by India and Pakistan
Armed encounters are frequent in the Himalayan region disputed by India and Pakistan AFP/TAUSEEF MUSTAFA

The expansion of Chinese influence in neighbouring states such as Sri Lanka, Myanmar, Bangladesh and Nepal has also gone down badly in New Delhi. India signalled its displeasure by refusing to send a top-level delegation to China’s Belt and Road forums in 2017 and 2019.

But while the China hawks in New Delhi have been gaining in influence, there remains a dovish school that has long argued it is not in India’s interests to get sucked into an American effort to “contain” China.

In part, this reflects the legacy of history. During the original cold war, India pursued a policy of non-alignment and was, in reality, often closer to Moscow than Washington.

As a country of nearly 1.4 billion people, India is understandably determined to forge its own path and maintain strategic autonomy. There are also sound economic arguments for trying to maintain a good relationship with China, which is India’s second largest trading partner.

READ: Commentary: Is this the end of China’s peaceful rise?

READ: Commentary: The clash with China is India’s biggest test


Any thought of trying to maintain equidistance between the US and China, is now likely to be abandoned by India. There are even hints that India may consider a formal alliance with the US.

One Indian intellectual, close to the Modi government, observed pointedly last week that one reason China might feel free to kill Indian soldiers – but not Japanese or Taiwanese troops – is that Japan and Taiwan are sheltering under a US security umbrella.

Donald Trump’s hostility to the American alliance system makes it highly unlikely that the US president would consider extending a security guarantee to India, at least, not without considerable financial inducement.

But an administration led by Joe Biden, his Democratic rival in November’s presidential elections, might well jump at the idea of a formal alliance.

FILE PHOTO: Democratic U.S. presidential candidate Biden speaks during campaign event in Darby, Pen
Democratic US presidential candidate and former Vice President Joe Biden speaks during a campaign event at a community center in Darby, Pennsylvania, US, Jun 17, 2020. (Photo: Reuters/Jonathan Ernst)

In recent years the US has become more overt in its efforts to woo India, as a balancing force to a rising China. In 2018, the US military renamed its Pacific command, the Indo-Pacific command and India’s increasingly close military ties with the US has been reflected in arms purchases, port visits and joint military exercises.

An intensification of that co-operation, in co-ordination with Japan and Australia, looks inevitable.

READ: Commentary: A search for India’s vision for the Indo-Pacific as Modi speaks at Shangri-La Dialogue


Indians are wary of further direct confrontations with China in the Himalayas. But they may try to challenge Beijing on other fronts by working with allies in the Indian Ocean and the South China Sea.

India is also likely to make more concerted moves to lessen its economic dependence on China. The chances of Chinese telecoms company Huawei being awarded contracts to build a 5G network in India now seem vanishingly small.

Should China care? Beijing’s confrontational posture suggests the Chinese have discounted the dangers of any Indian retaliation. China knows that its economy is nearly five times the size of India’s and that its military has more firepower.

READ: Commentary: Why are Chinese officials acting like Internet trolls and entertaining online fights with the US?

The Chinese may even have judged that now is a good time to put India in its place when the country is stricken by the coronavirus and the US is distracted.

In the aftermath of last week’s border clashes, the Global Times, a nationalist newspaper in Beijing, wrote, in an editorial, that India should learn from this incident and cannot rely on Washington for support and succour.

In the short-term, that might well be right. Over the long-run, China should be worried.

The four largest economies in the world, ranked by purchasing power, are China, the US, Japan and India. All four nations are intensely concerned by the balance of power in the Indo-Pacific region.

It is folly for China to drive India into America’s arms.

Commentary: That low-carbon future for Singapore isn’t so far-fetched

SINGAPORE: The question of whether Singapore can or, more interestingly, should strive toward low-carbon energy transition has been raised recently in climate debates.

In an opinion piece by The Straits Times titled Can Singapore really transit to a post-oil economy?, economists Dr Tilak Doshi and Professor Euston Quah responded to a CNA commentary by Yale-NUS climate data scientist Angel Hsu and attempted to make a case against what they call “an over-hasty transition to newer but less efficient technologies”.

READ: Commentary: Forget bamboo straws. Let’s name the elephants in the room of Singapore’s climate debate

The opinion piece made a strong statement: “Policies fashioned by green ideology will lead to Singapore collapsing economically first before it may drown in sea level rise”.

However, we find the narrative of green ideology posing risk for Singapore’s development rather unbalanced.

The authors argue that Singapore’s legacy as a major petrochemical and refining hub must be central to climate policy discussions, which is indeed undeniable. Oil refining, petrochemicals and specialty chemicals production is one of the key pillars of Singapore’s economy, contributing around 22 per cent of nominal gross domestic product in 2018.

READ: Commentary: Have Singaporeans been mollycoddled on climate change?

But a green economy does not preclude the petrochemical and refining industry altogether, and there are multiple scenarios of a low-carbon transition for Singapore.

For example, adopting technologies for carbon capture, storage and utilisation could cut carbon emissions of the petroleum refinery and chemical industries without significantly affecting economic output.

However, the technology’s cost and energy efficiency have to be improved first, which is why Singapore needs to focus on research and development in that area.

Jurong Island
File photo of infrastructure on Jurong Island. (Photo: AFP) 

It is fair to argue that pace of energy transition is critical – rapid transition might bring devastating consequences. But there are solid reasons to suggest that achieving a greener economy deserves to be an end-goal for Singapore.


One of the criticisms that the green energy transition received in the opinion piece concerned its slow pace.

But oil giant BP’s 2019 Energy Outlook suggests that renewable energy’s penetration into the global energy system is poised to be the quickest compared to any other fuel in history.

While oil and gas took around 40 to 50 years to rise from 1 per cent to 10 per cent in the global energy mix, renewables can take less than 25 years to achieve the same share.

READ:  Commentary: Big Oil talks a good low-carbon game but does little to back that up

Further data from BP and the US Department of Energy indicate that renewable energy would comprise around a third of global electricity generation by 2040. At the same time, in Southeast Asia, the share of renewables in electricity supply would be around 15 per cent in 2040.

Although that seems to be mild progress, a higher share of renewable electricity paves the way for deeper decarbonisation of Singapore. To really understand the island’s low-carbon transition, we must take a closer look at the ongoing moves toward a greener economy and the opportunities these afford.


At the recent Institute of Policy Studies Perspectives 2020 conference, Minister for Trade and Industry Chan Chun Sing said that Singapore is looking at a post-fossil fuel future given the global trends in decarbonisation.

He said however, that this was dependent on how fast Singapore is able to adopt the necessary technologies and address the shift in economic structure that decarbonisation would bring.

CCS at IPS Conference Jan 20, 2020
Minister for Trade and Industry Mr Chan Chun Sing speaking at the Institute of Policy Studies’ Singapore Perspectives Conference 2020 on Jan 20, 2020.

Last year, Mr Chan also announced that Singapore would develop “four switches”: Natural gas, solar power and energy storage, regional power grid and low-carbon energy options.


Despite the growth in solar photovoltaic (PV) capacity, Singapore will continue to rely on natural gas over the next 50 years. Natural gas is the cleanest form of fossil fuels, at 50 per cent of carbon intensity of coal and 70 per cent that of oil.

Singapore, like all countries, is concerned about threats to energy security, such as supply disruptions and price increases.

READ: Commentary: Singapore’s rising natural gas ambitions face big challenges

Because we are still studying how much solar electricity Singapore’s grid can take while still ensuring stability and reliability of supply, natural gas is a compromise between more polluting fossil fuels and renewable energy.


Singapore’s total electricity generation capacity is around 1.9 times the peak system demand, according to the Energy Market Authority’s Singapore Energy Statistics 2019. 

Solar PVs contributed 174.3 MW, or 1.3 per cent of total electricity capacity in 2019 but more information on solar energy demand can help inform Singapore’s energy transition.

The lack of technical need for additional capacity, and a limited understanding of the percentage of solar energy in Singapore’s current energy mix could also be a reason for the inertia in adopting solar energy at a faster pace.

READ: Commentary: A sustainable future increasingly looks more Chinese

This shift towards solar energy should focus on both reducing peak demand and consuming less electricity all around. 

Greater transparency in data and better understanding of energy terminologies could be helpful for an assessment of how Singapore’s electricity mix could become greener.

Additionally, the traditionally vertically integrated power generation utilities were fully divested from Temasek Holdings in December 2008. 

But corporate ownership of utilities in Singapore could add to delays in decision-making on adoption of renewables, especially when Singapore’s Nationally Determined Contribution or climate pledge currently does not include a specific renewable energy target.

Solar panels Sembcorp
Solar panels on the rooftop of an HDB block in Singapore. (Photo: Sembcorp Industries)

However, recent initiatives by the Singapore Government inspire optimism for the future of solar PV on the island. 

The second “switch”, solar power, sets ambitious targets of reaching at least 2 gigawatt peak (GWp) of installed capacity by 2030, or around 4 per cent of current electricity demand.

Knowing that intermittency of generation is one of the key barriers to solar power development, the Singapore Government is planning to deploy energy storage capacity of 200 megawatts beyond 2025.

This way the power can be accumulated when the sun is shining and used later to minimise potential interruptions in electricity supply.

READ: Commentary: The future for Singapore’s energy burns bright

Among measures to achieve the solar target is the installation of decentralised solar power in residential sector.

A significant progress in that area was made by the SolarNova programme launched in 2014 by HDB and EDB of Singapore. 

Since its launch, the programme has installed solar panels on rooftops of about 2,000 HDB blocks, with the installation at additional 2,370 HDB blocks ongoing.

It is worth noting that large-scale solar power in Singapore achieved “grid parity” in 2013, meaning that the cost of solar electricity generation has become equal to or less than that of conventional energy.

Government-led energy storage deployment, falling costs for utility-scale battery storage and grid parity of solar energy build strong prospects for the solar power as commercially feasible and promising industry in Singapore.


The Government is also exploring the possibility of creating a regional power grid as the third switch. Creation of such a grid can open vast opportunities for renewable energy trade.

Power Station 01
File photo of a power station in Singapore. (Photo: Jeremy Long)

For instance, companies in Singapore could invest in regional renewable energy projects and use renewable energy certificates (RECs) to receive the same amount of electricity from the grid.

RECs are proof of electricity generation from renewable sources, and can be bought and sold by companies to achieve their green targets. In 2019, Singapore utility firm SP Group became the first authorised issuer of renewable energy certificates (REC) in the Asia Pacific.


Besides solar power, Singapore is also tapping into low-carbon energy alternatives, named a fourth switch.

Hydrogen as a clean fuel is gaining attention in Singapore’s energy agenda. Last year, the National Climate Change Secretariat, housed under the Strategy Group in the Prime Minister’s Office announced a tender for a feasibility study of hydrogen imports and downstream applications.

READ: Explainer: Why Asia’s biggest economies are backing hydrogen fuel cell cars

Development of hydrogen in Singapore’s energy system could allow to significantly reduce carbon emissions and boost production of valuable chemicals, provided that hydrogen is generated using renewable energy. Currently, the vast majority of hydrogen is generated using natural gas.

Another strategic opportunity pursued by the government is carbon capture and utilisation (CCU). 

Singapore has a number of stationary sources of carbon emissions including refineries, power plants and petrochemical facilities. Carbon capture technology traps the emitted carbon, which then can either be transported to a geographical storage or converted to other valuable products.

Lack of available storage sites in Singapore makes utilisation of captured carbon, for example to produce methanol or mineral aggregates, a meaningful option to reduce the island’s emissions and capitalise on its economic value.

Carbon dioxide storage tanks are seen at a cement plant and carbon capture facility in Wuhu
Carbon dioxide storage tanks are seen at a cement plant and carbon capture facility in Wuhu, Anhui province, China September 11, 2019. Picture taken September 11, 2019. REUTERS/David Stanway

With access to hydrogen, carbon dioxide could be used to produce fuel and chemical feedstock, which can supply domestic needs or sold internationally. Carbon dioxide can also be utilised in production of construction materials.


Singapore should continue its commitment to decarbonising its economy outside of the energy generation sector.

Solar power, hydrogen, carbon capture and utilisation and other energy efficiency technologies have a strong potential to reduce Singapore’s emissions while contributing to its economy.

READ: Commentary: What if governments and firms measure the one thing that matters most – carbon productivity?

Energy security cannot be the last concern for Singapore given its heavy reliance on natural gas imports for power generation. Rising demand for liquefied natural gas (LNG), mostly driven by Asia, renders Singapore’s energy sector potentially vulnerable to volatility and price shocks.

By diversifying its energy mix, Singapore can reduce its dependence on imported LNG and strengthen its energy resilience.

Therefore, the focus should be on controlling the growth of natural gas consumption. It doesn’t matter how laudable Singapore’s solar targets are if the growth in energy consumption offsets renewable energy capacity additions. Singapore should strive toward meeting new energy demand through expansion of solar power deployment and energy efficiency measures.

LISTEN: Heart of the Matter: Talking about the Madrid climate talks, what happened and what’s next?

One critical way to facilitate that is setting a more ambitious Nationally Determined Contribution (NDC) for 2030.

At the Madrid COP25 climate conference last December, Singapore’s Minister for the Environment and Water Resources Masagos Zulkifli announced in his speech that Singapore will update its NDC and communicate a long-term low emissions strategy soon.

Singapore’s updated NDC should translate into more specific targets for long-term energy mix of Singapore. 

Having specific targets for solar and hydrogen will indeed send a market signal and galvanise action toward a greener future in Singapore.

Magzhan Sovetbek is a Research Associate at the Energy Studies Institute, National University of Singapore. Melissa Low is a Research Fellow at the Energy Studies Institute, National University of Singapore.

Commentary: Novel coronavirus reveals old vulnerabilities in the global economy

NEWPORT BEACH, California: Last week’s fretting over the coronavirus was a good illustration of a tug of war that has been playing out in financial markets for a while: Between favourable sentiment and mounting longer-term economic uncertainties.

Until now, at least, that contest has been resolved in favour of ever-higher stock prices.

But investors need to decide if they want to opt for more of the same, by continuing to implement an investment playbook that has served them well, or if they want to treat the viral outbreak for what it is — a big economic shock that could derail global growth and shake markets out of their “buy-the-dip” conditioning.

Entering 2020, investors faced the challenge of balancing favourable short-term market technicals with weaker fundamentals, and doing so with government bonds providing little protection given the very low — and, in some cases, negative — level of yields in advanced countries.


The coronavirus outbreak amplifies two vulnerabilities: Structurally weak global growth and less effective central banks.

It is becoming harder for markets to treat such fragilities as being beyond the immediate horizon, especially with a host of other uncertainties not far behind, including the recurrence of trade tensions, growing realisation of the impact of climate change, technological shocks, political polarisation and changing demographics.

READ: Commentary: China in a coronavirus lockdown – life is normal but not really

READ: Commentary: Tourism in Asia takes a beating after novel coronavirus outbreak

Retail, trade and travel are simple ways to illustrate what is going on in China.

Stores are facing dramatic disruptions involving a virtual halt in traffic, while suppliers are finding it harder and slower to move their merchandise, both within and in and out of the country.

And there is a huge drop in travel to China, dealing another blow to economic activities undermined by less internal mobility.

This virtual stoppage of economic activities is cascading throughout the second-largest economy in the world, and one with considerable regional and global ties. It is fundamentally weakening the country’s services sector, at a time of considerable challenges for manufacturing.


With both engines of growth now sputtering, internal and external, China will also find it harder to navigate its transition from a middle-income economy.

The country’s increasing “sudden stop” economic dynamics also involve adverse spill-over effects, first and foremost for emerging Asian economies with strong economic and financial linkages with China. 

Apple has closed its stores in mainland China due to the new virus which has killed 259 people and
Apple has closed its stores in mainland China due to the new virus, which is fundamentally weakening the country’s services sector, at a time of considerable challenges for manufacturing. AFP/NICOLAS ASFOURI

A weakening China is also a problem for Europe, where the European Central Bank is effectively out of productive ammunition and politicians are yet to implement a comprehensive pro-growth policy package.

And with the virus affecting the movement of people and goods, there is an increased risk of a multi-year process of de-globalisation that neither the global economy nor markets are wired for.

The coronavirus also has the potential to constitute a structural break for markets: A big enough shock that fundamentally shifts sentiment.

READ: Commentary: Coronavirus – Where should Koreans evacuated from Wuhan stay?

LISTEN: Novel coronavirus – The WHO, Singapore’s infectious diseases authority and a global outbreak expert answer your burning questions


Previously, markets had been underpinned by the belief that central banks were always willing and able to repress volatility and boost asset prices. That fuelled investors’ fear of missing out on a seemingly never-ending rally.

Until last Friday (Jan 31) when US stocks dropped about 2 per cent, markets’ inclination was to respond to sell-offs by deploying a game plan that worked well in 2019 and early 2020, including in response to shocks such as the US missile attack that killed a top Iranian general and the disruption to half of Saudi Arabia’s oil production.

International Monetary Fund Managing Director Kristalina Georgieva said China is like to experience
International Monetary Fund Managing Director Kristalina Georgieva said China is like to experience an economic hit from the virus outbreak at least in the first quarter. (Photo: AFP/Fabrice COFFRINI)

For the previous year, traders and investors quickly bought every dip in the belief that the latest shock would prove temporary, contained and reversible.

Now, the multi-year gap between elevated asset prices and weaker economic conditions is becoming increasingly unsustainable.

The global economy and markets are getting closer to the neck of a T-junction. What comes after that involves a stark contrast, depending on how policymakers respond.

One way involves recession, financial instability and even more complicated politics; the other, a genuine growth process that validates elevated asset prices in an orderly fashion and opens the way for more constructive politics.

If investors still insist on immediately buying dips, they should do so in a much more differentiated manner by favouring higher-quality issuers that are underpinned by strong balance sheets. 

They should also avoid swapping US assets for more international exposure, which — although more attractively valued — is much less resilient to global economic weakness. 

For the remainder, which is probably most investors, they should consider that this latest shock to fundamentals could prove severe enough to dislodge for a while the bullish market conditioning that has been so critical to this historic stock rally.

Given that the negative economic effects of the virus are yet to be sufficiently absorbed by markets, this also calls for much greater immediate attention to potential vulnerabilities in portfolios, in the form of equity and liquidity risk.

Mohamed El-Erianis Allianz’s chief economic adviser and president-elect of Queens’ College, University of Cambridge

Commentary: Why the UK had to say yes to Huawei

GLASGOW: The UK’s decision not to ban China’s Huawei from being a supplier for its next-generation mobile network has caused ructions.

US politicians are outraged, with Newt Gingrich calling it a “major defeat” for his country.

In the UK, there could be a Tory rebellion against forthcoming legislation on the matter.

In truth, the government had little choice. When you look at the background, the decision is at least understandable – and more complex than just a security issue.

READ: Commentary: Out from the ashes of Brexit, the UK emerges into a brave new world

Mobile phone networks comprise two parts: the core and the radio access network or RAN. The core handles security-sensitive aspects such as user authentication, routing calls, data and so on. The radio network consists of base stations and other networking equipment across mast sites nationwide.

When a user makes a call or uses the internet, a signal from their phone is picked up by a base station and is passed across the radio network to the core, where it is routed to wherever it is supposed to reach.

While your call or data is encrypted, it is decrypted on the base station before being passed on – the base station can therefore see its content.

In the UK, the 5G equipment roll-out is well underway, with more to come. It’s difficult to get figures for the outlay by the four network operators – Vodafone, O2, EE and Three – but the radio network upgrade is certainly most of what is required and is spread throughout the country.


Huawei has been banned from supplying the network core, but is to be allowed to supply a maximum of 35 per cent of the radio network equipment. Let’s be clear here: the UK operators were lobbying hard for Huawei not to be excluded.

READ: Commentary: The US-China tech rivalry is fracturing the world and affecting trade, firms and jobs

They are all using the Chinese company’s equipment to some extent in the 5G upgrades to their radio networks. Though they are still having to rethink their 5G plans because of the partial ban, they were facing huge costs and delays to rolling out 5G if the equipment had to be removed altogether.

The British flag and a smartphone with a Huawei and 5G network logo are seen on a PC motherboard in
The British flag and a smartphone with a Huawei and 5G network logo are seen on a PC motherboard in this illustration picture taken January 29, 2020. REUTERS/Dado Ruvic/Illustration

This is partly because today’s 5G equipment piggybacks onto existing 4G base stations, and both the 4G and 5G kit tends to have to be supplied by one vendor. Banning Huawei would therefore mean replacing both 4G and 5G equipment. Vodafone alone said this would cost the company “hundreds of millions” of pounds.

Secondly, there are only three major radio suppliers: Huawei, Ericsson and Nokia (all of which manufacture in China). Excluding Huawei risked exposing operators to duopoly pricing. Partly for this reason, the government commissioned a review of the telecoms supply chain in 2018.

READ: Commentary: China makes inroads into Europe. That’s creating some discomfort

The resulting report last July said the government would develop a new security framework, and consult with industry on the best way forward. It also highlighted the need for more supplier competition, but there seems no easy solution.


Without a doubt, the network operators’ commercial interests are potentially at odds with UK security interests over Huawei. People often worry about the threat of “backdoors” in Huawei equipment and software that would allow remote control from outside the UK, but the issue is more systematic security failings in the software that could be remotely exploited.

READ: Commentary: Is Huawei dangerous because it’s Chinese? What about Facebook?

The 2019 report of the board that oversees the Huawei Cyber Security Evaluation Centre (HCSEC) said much of the software “lacks basic engineering competence” and “significantly increased risk to UK operators”.

The board could only give “limited assurance” about managing the risks, and said Huawei’s coding practices make the “job of any code auditor exceptionally hard”. In other words, the verifiers could miss insertions or oversights that might enable security breaches.

Another risk is that equipment suppliers usually have authorised remote access to their hardware to provide support or fulfil a managed services contract, and the equipment needs regular software security updates and bug fixes. Security updates could be vetted by HCSEC, but this would probably be a difficult undertaking to scale. 

There is also a lot of outsourcing in this sector, including to Huawei, which opens up further potential for security breaches.

The UK National Cyber Security Centre, which advises the government, concedes the risks of admitting Huawei, but thinks they can be made “acceptable” by limiting access.

FILE PHOTO: Branding hangs outside a Vodafone shop in Oxford
FILE PHOTO: Branding hangs outside a Vodafone shop in Oxford, Britain, May 16, 2017. REUTERS/Toby Melville/File Photo

This may be challenging with the changes 5G may bring to mobile networks. For example, connected and driverless vehicles needing to exchange information quickly won’t route all their data traffic via the network core.

Instead, many 5G core functions may take place in the radio network, making it increasingly harder to define Huawei’s permitted area. And with base stations inherently connected to the network core, there is a limit to the isolation which can be put in place anyway.


Overall, however, the government seems to have been caught between a rock and a hard place: faced with wounding the UK network operators and slowing the 5G roll-out, it has sought a compromise.

READ: Commentary: Big Tech is showing some love to the US government – which comes as no surprise

To some extent, this is the consequences of deciding too slowly. Had the UK banned Huawei in 2018 like the US and Australia, the mobile operators’ 5G roll-out plans would have been at an earlier stage. The US also compensated some of its networks for the costs of equipment removal.

The UK government is instead looking to the future. Nicky Morgan, the culture secretary, told the House of Lords on January 28 that the government wants to attract established equipment vendors to the UK who are not already present, to support new disruptive entrants, and reduce barriers to market entry.

On established vendors, she may be referring to companies that make radio network equipment but don’t compete aggressively in this space: Samsung, for example.

FILE PHOTO: Britain's Digital, Culture, Media and Sport Secretary Nicky Morgan is seen outside
FILE PHOTO: Britain’s Digital, Culture, Media and Sport Secretary Nicky Morgan is seen outside Downing Street in London, Britain October 24, 2019. REUTERS/Hannah McKay

As for new entrants, there may be a hope of enticing players who supply different types of networks, such as Cisco or Juniper. There is also significant potential to innovate in 5G networks. The UK’s Testbeds and Trials programme is enabling this and will continue to do so.

For the time being, the government can hardly be enjoying the fallout from its decision. To date, much focus has been on the confidentiality of communications over mobile networks, and risks of spying.

A bigger issue is the need to keep the mobile phone network running. We are in an era where everything from Uber and Deliveroo to most credit card machines cannot function without it

The nightmare scenario is a hostile state-affiliated actor shutting down or damaging the mobile networks. It may have effectively been impossible for the UK to say no to Huawei, but the current compromise is far from ideal.

Greig Paul is Lead Mobile Networks & Security Engineer at the University of Strathclyde. This commentary first appeared in The Conversation.

Commentary: Lucky to have flown out of Wuhan, but many feel mixture of concern and uncertainty

Having defied logistical obstacles to leave, evacuees now face two weeks in quarantine. But that’s one of the few certainties they have, says the Financial Times’ Tom Hancock.

Passengers board buses past personnel in protective clothing after arriving on an aircraft, charter
Passengers board buses past personnel in protective clothing after arriving on an aircraft, chartered to evacuate government employees and other Americans from the novel coronavirus threat in the Chinese city of Wuhan. (Photo: Reuters)

LONDON: As our Boeing 747 from the Chinese city of Wuhan touched down at a military base in Oxfordshire on Friday (Jan 31) lunchtime, the overwhelming emotion was concern.

This was no ordinary flight.

The passengers on board had been trapped in a city sealed off from the outside world, shut down by Chinese authorities struggling to get to grips with the coronavirus outbreak that has killed more than 200 people and spread panic around the world.

Two weeks ago I arrived in Wuhan to cover the virus outbreak for the Financial Times. But what started as a regular assignment quickly turned into a surreal captivity.

READ: Commentary: Coronavirus – Where should Koreans evacuated from Wuhan stay?


On Friday, 110 people were allowed to leave by air as part of an evacuation effort.

One of my fellow passengers was an unaccompanied three-year-old girl who had been staying with her grandparents in Wuhan while her parents were in the UK. She was cared for on the flight by staff from the UK Foreign Office.

The eldest was Veronica Theobald, an 81-year-old from Lancaster, who suffers from chronic obstructive pulmonary disease and who was taken to the flight in a wheelchair.

Wuhan virus medical professionals
Medical staff in protective clothes are seen carrying a patient from an apartment suspected of having the virus in Wuhan, in Hubei province on Jan 30, 2020. (Photo: AFP / HECTOR RETAMAL)

Our flight’s departure had been shrouded in uncertainty until the last minute and was originally meant to have left on Thursday morning. When the call came, we only had a few hours to get to a meeting point near Wuhan airport.

Like my fellow passengers I wore a face mask throughout most of the journey.


For other passengers, leaving the centre of the outbreak was mixed with uncertainty about the future and the lives they have left behind. “It’s bittersweet,” Emma Wang, a Chinese national travelling with her British partner and three-month-old baby, told me.

“I like living in Wuhan but the situation there is difficult for us, there’s a lot of sick people,” Dani Carmona, a Spaniard who had been working as a football coach in Wuhan, told me.

LISTEN: Wuhan virus – The WHO, Singapore’s infectious diseases authority and a global outbreak expert answer your burning questions

READ: Commentary: Wuhan virus – when social media and chat groups complicate crisis communication

He had to leave his girlfriend behind. “It was a difficult decision,” he said. “Of course, I will come back to Wuhan as soon as I can.”

The cabin crew also wore masks and gloves during the 12-hour flight. One female attendant, who did not wish to be named, revealed that she would not earn extra money for the job.

“I want to help people wherever they’re from,” she said. “We’re on three-month contracts, so it might have been possible to say ‘no’ to doing this flight, but it could have meant losing work in future.”

“I feel it can’t be too dangerous, as the British government wouldn’t put us at risk,” she added.


As we neared the UK, a Foreign Office official told us that the flight was “nothing short of remarkable” given the logistical issues, including “obstacles thrown by Beijing”.

When we landed there was no clapping or cheering from the passengers, who included 27 EU nationals as well as pilots and a Spanish crew.

An aircraft chartered by the U.S. State Department to evacuate government employees from the novel
An aircraft chartered by the U.S. State Department to evacuate government employees from the novel coronavirus threat in the Chinese city of Wuhan, arrives at Ted Stevens Anchorage International Airport. (Photo: Reuters)

None of the passengers on board had shown symptoms of the flu-like coronavirus before boarding, the flight attendants said. And none of the passengers became ill during the time in the air.

After we left the plane, the flight took off again for Spain.

For those of us who disembarked at Brize Norton, two weeks of quarantine await. There is no such certainty for the millions still in Wuhan.

BOOKMARK THIS: Our Comprehensive Coverage on the Wuhan coronavirus and its developments

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Commentary: Some companies target toilet breaks to improve productivity. But it’s wrong and won’t work

LONDON: Productivity growth in the UK has stalled since 2008. The puzzle has become so tricky that toilet makers are getting in on the act of suggesting solutions.

The company StandardToilet has designed a tilted toilet, whose seat slopes downward at a 13 degree angle. Its goal is to stop users lingering too long on the lav.

After about five minutes, sitting on a tilted toilet will put a strain on users’ legs, said to be similar to a “low level squat thrust”.

The idea is it would save employers money because, according to the company’s press release, “extended employee breaks cost industry and commerce an estimated £4 billion (US$5.2 billion) per annum” in the UK.

An uncharitable commentator might question where the company pulled this (unsubstantiated) figure from.

But a steady stream of news reports suggests that employers around the world are indeed clamping down on toilet breaks in a bid to improve productivity.

A Chicago-based firm hit the news when a union filed a complaint against it for “bathroom harassment”. The firm, which had introduced swipe cards to monitor toilet use, advised that employees should spend no more than six minutes on the loo per day and even gave gift cards to workers who didn’t use the toilet at all during work time.

Meanwhile, in Scotland, call centre staff were asked to sign a new contract limiting toilet breaks to 1 per cent of their shift – just two minutes for those working a four-hour part-time day. 

In Norway one company required female employees to wear red bracelets while menstruating, to show they were allowed to visit the toilet more often.


Time away from the desk or production line may not be an employer’s only concern when it comes to toilet use.

Toilet rolls sitting on a tiled ledge in the toilet
(Photo: Unsplash)

As studies on workplaces as diverse as Japanese-owned car firms in the UK and textile factories in Kenya have found, toilets are also places where workers express anti-company sentiment, share advice and even covertly organise.

A study of Italian factories in the post-war period – an era of union suppression – found that toilets became a focal point for resistance. As one of the few places in a factory that wasn’t monitored, toilets were used as a meeting point as well as a place where anti-company feelings could be more freely expressed and union literature shared.

In one case, a female worker found graffiti accusing the factory boss of being an “idiot and a buffoon” inscribed on a toilet door. Perhaps scared that she would be accused of writing it, she reported the infraction to management.

The door was removed and, to root out the culprit, all workers were forced to write out the phrase in front of a handwriting expert. The guilty party was found and relieved of their position – but, as researcher Ilaria Favretto points out, at least they got to see every worker in the factory repeat the insult.

READ: Commentary: Does the thought of using public toilets make you anxious? You’re not alone

READ: Commentary: Is it okay to hold in your pee?

One thing stands out in all these examples: It’s lower paid, more precarious workers who are more likely to have their workplace activities – and toilet breaks – more tightly controlled and monitored.

Writing about workplace surveillance technologies, economist Joelle Gamble points out that as employers collect more data on their workers, they increase their power over them. In some cases, workers’ wages are directly affected.

People working in the office
(Photo: Unsplash/LYCS Architecture)

Companies using just-in-time scheduling technologies have been cancelling workers’ shifts at short notice when sales are down.


But is this drive for ever more rigid control of workers’ (bowel) movements actually good for productivity?

A new collection of essays published by Carnegie Trust and the RSA think tank suggests not. Instead, it makes a strong case that good quality work is the key to improving productivity, especially at the bottom end of the labour market, where job quality is poorest.

Instead of trying to optimise every minute of their workforce’s time, employers might be better off improving working life.

Rather than punitive measures, several of the essays argue that giving workers voice and agency is crucial in increasing productivity. New workplace technologies are more likely to be successful when workers feel involved in decision-making.

A report by the Living Wage Foundation makes similar points. Focusing on the retail sector, it argues that standardising tasks while empowering staff to use their discretion is important in improving productivity and profits. This helps improve staff retention and motivation, among other benefits.

READ: Commentary: Are you better off working from home than in the office?

READ: Commentary: Not enough time? Transforming work and sleeping better in a digital world

In a knowledge-driven economy, the mostsuccessful firms are constantly innovating. We need to spread the practices that these firms use – collaboration, decentralisation, autonomous teams – if we want a step-change in productivity.

So the next time someone tries to sell you a productivity-enhancing toilet, don’t just take it sitting down.

Madeleine Gabriel is Head of Inclusive Innovation at Nesta. This commentary first appeared in The Conversation.

Commentary: Indonesia seeks to abolish national exams but could end up creating a new rat race

JAKARTA: In December last year, Indonesia’s Minister of Education Nadiem Makarim announced sweeping changes to the education sector through four priority reforms. One of them is the abolition of the country’s annual national exams.

The exams will be replaced by what the minister dubs a “minimum competency assessment and character survey”. Inspired by concepts used in the Program for International Students Assessment (PISA), it aims to measure students’ numeracy and literacy levels at grade four, eight, and eleven.

Set as an important factor determining students’ graduation, the national exams have been notorious for causing high levels of anxiety in students, parents and teachers.

The exams have also failed to contribute to improvements in the quality of school education.

READ: Commentary: What Nadiem Makarim brings to the table as education and culture minister

A 2018 study by think tank SMERU looked at education policies in 13 regencies and cities across Indonesia. It found no meaningful correlation between the 2017 national exam results and the adoption of policies aimed at improving teacher skills.

In 2019, the ministry confirmed 126 cases of cheating nationwide – a 59 per cent increase from the previous year.

Studies have also shown how the exams have caused “measurement-driven teaching”, where teachers focus mostly on items being tested in upcoming exams.

Scholars argue moving away from a high-stakes graduation exam to an evaluative assessment can help focus Indonesia’s education towards improvements in classroom teaching and learning.

indonesia school
(Photo: Pixabay/aditiotantra)



Goldy Fariz Dharmawan, a researcher at SMERU said Minister Nadiem’s focus towards numeracy and literacy made sense.

“The test items would probably have to be based on either literacy or numeracy as students’ core competencies, but this could be designed to cover a variety of subjects including the social sciences,” he said.

He suggested the test could, for instance, use questions with economic themes or give problems aimed at testing financial literacy.

READ: Commentary: The fear of failure cannot help Singapore reach our best

The PISA tests – which are centred on mathematics, science and reading – were criticised in 2014 by a coalition of more than 2,000 academics from 40 countries. They say the tests can “dangerously narrow our collective imagination regarding what education includes and ought to be about”.

Goldy was also concerned assessments like these only focus on the results of students’ learning and not on things that happen inside the classroom, which he considers the true “blackbox” of education.

READ: Commentary: Indonesia has big plans for education but severely lacks good teachers

He called for the new assessment to not just be conducted in one or two days. Instead, it should be held across a slightly longer period of time to accommodate field observations to understand the teaching-learning process in schools.

“The assessment should be a complete package which includes a numeracy-literacy evaluation, classroom observations, and also Minister Nadiem’s proposed ‘character survey’ if required,” he said.

Nadiem Makarim, founder of the Indonesian ride-hailing and online payment firm Gojek waves to journ
Nadiem Makarim, founder of the Indonesian ride-hailing and online payment firm Gojek waves to journalists as he arrives at the Presidential Palace in Jakarta, Indonesia, Oct 21, 2019. (Photo: Reuters/Willy Kurniawan)

He suggested classroom observations be conducted on a sample of schools that represent every province should budget limitations become an issue.

“The two assessments can then be analysed together to provide a complete picture of how students are really learning across Indonesia.”


Edi Subkhan, who teaches education technology at Universitas Negeri Semarang, argued the Ministry of Education and Culture must ensure the assessment results will be effectively used to improve the quality of schools.

“Those that should have played a big role in acting upon assessment results include school leaders, regional education agencies (dinas pendidikan), and forums such as the Teacher’s Work Group (KKG). However, their efforts don’t seem to have been very promising,” Edi said.

“To help them think of better solutions, we can involve research agencies such as SMERU, the Centre for Education and Policy Studies (PSPK), or even research centres within teacher education institutions (LPTK).”

READ: Commentary: Want smart Asian countries? Get governments to be digital ready first

Goldy agreed with Edi. He said the government could deploy research teams and education analysts to assist regional actors in identifying local problems. They could then draw from the assessment results to solve them.

However, he argued different local conditions must be taken into account.

“Our provinces have varying capacities, different dominant actors, and distinct education cultures. Yogyakarta for instance, has their own team of analysts. Other provinces aren’t so well-equipped,” he said.

He said it was important for the government to understand the needs of each region so it can deploy help accordingly.


(ks) Krayan junior high school
Indonesian students in the remote district of Krayan, North Kalimantan (Photo: Kiki Siregar)

Although the proposed assessment indicates a shift from the high-stakes exam students are used to, Edi warned of the possibility of it causing another rat race.

“If the government falls into the trap of making the proposed assessment all about rankings, schools and regional governments will be pressured to do everything they can to achieve the highest scores. This defeats the purpose of an evaluative assessment,” he argued.

“It would just be another national exam but with a different skin.”

READ: Commentary: A hyper-competitive culture is breeding severe test anxiety among many students

A study from the University of Oslo, Norway took note of how PISA caused its participating member nations to be obsessed with policies designed to increase their test scores.

The researchers said it has ended up “killing the joy of learning and led to the detriment of basic values that schools should strive for”.

To avoid this, Edi suggested the government prepare “policy packages” aimed at improving schools that are behind in the assessment results, and communicate them effectively to education units nationwide.

READ: Commentary: The progressive Indonesian leader set to make waves at the World Bank

“These policy plans must be formulated since the beginning so that schools are assured that attaining unfavourable but honest results will actually help them,” he said.

“This was another missing piece of our current national exams. There was no certainty.”

Luthfi T Dzulfikar is an associate editor of The Conversation Indonesia. This article first appeared on The Conversation.

Commentary: The Wuhan virus and the problem with the wildlife trade

NORWICH: The SARS outbreak in 2002 to 2003 was the first global pandemic of the 21st century.

There were over 8,400 reported cases and 11 per cent of those infected with the virus died. Its cause was a newly identified coronavirus (a type of virus that causes respiratory infections): SARS Co-V.

Early cases were linked to wildlife markets and restaurants in Guangdong, China, where researchers found SARS-like coronaviruses in animals including masked palm civets and a racoon dog.

A Chinese government team subsequently reported that 66 out of 508 wildlife handlers tested in other markets across Guangdong were positive for antibodies to the SARS virus.

The Chinese authorities responded by imposing a temporary ban on the hunting, sale, transportation and export of all wild animals in southern China. They also quarantined or culled civets reared for human consumption in the many civet farms across the area.

READ: Commentary: Allowing employees to work from home can help South Korea manage the Wuhan virus


Civets testing positive for SARS may have secondary infections rather being than the source of the virus.

They were probably infected during the “speed dating” of zoonotic viruses circulating among the jumble of different animal species packed together at markets or while being transported to markets, often in China.

READ: China deploys army medics to overwhelmed virus epicentre

MORE: Our coverage of the Wuhan virus and its developments

At the Royal Society’s international conference on Lessons from SARS in 2004 and in the related publication, we emphasised that wildlife trade was a threat to human health and a primary cause of biodiversity decline in China and South-East Asia.

But here we are again, 17 years later, with another novel zoonotic coronavirus, this time in Wuhan, China. Once again, initial human cases were linked to a market selling a variety of live animals.

A constantly changing range of species have been selected as the culprits in the past few days, including bats and snakes, (the latter results were quickly refuted), and even crickets and wolf cubs.

But, as yet, there is no scientific evidence that the virus has been isolated from any of these, although a recent report stated that “15 environmental specimens collected in the western section (of the Huanan Seafood Wholesale Market) were positive for 2019-nCoV virus through testing and genetic sequencing analysis”.

A seafood market in Wuhan has been identified as the centre of the outbreak
A seafood market in Wuhan has been identified as the centre of the outbreak. (Photo: AFP/NOEL CELIS)

The report continues: “Despite extensive searching, no animal from the market has thus far been identified as a possible source of infection.”

It is not evident what “environmental specimens” refers to here and a complete list of those animals present in, or available from, the market would be appropriate to release together with details of which and how many of these have so far been tested.

Wild rodents, which are often present in these markets, should also have been collected and tested as SARS-like coronaviruses have also been isolated from wild rats in China.


But we may be chasing our tails, as animals testing positive may not be the source of the current outbreak. We need to step back and learn the broader lessons here.

The perfect conditions for the emergence of human pandemics from previously unknown zoonotic pathogens has been created as a result of three things.

READ: Commentary: Wuhan virus sparks questions over local Chinese officials’ disclosure of information

READ: Commentary: Snakes possible source of Wuhan virus but more research needed 

First, the shift from subsistence hunting of wildlife to its sale into an international trade network largely driven by demand in China.

Second, the extensive cross-exposure within this wildlife trade of species and species populations, which would not mix or be in contact in the wild.

And, third, the exploitation of new source populations as areas become depleted of target species.

People wearing masks shop at a market in Wuhan
People wearing masks shop at a market in Wuhan, Hubei province, China January 23, 2020, in this still image taken from video. (Photo: China News Service/via REUTERS TV)

It is also important to emphasise that these wild animals are typically now more expensive to buy (sometime a status symbol) than domestic livestock, so the demand that perpetuates wildlife trade in the region is a dietary choice and not driven by low income.


The solution is collective action to remove the demand and also the supply chains to these wildlife markets and “farms” (often laundering animals from the wild rather than breeding them).

The call to close wildlife markets across China – which started following the SARS outbreak – has also been echoed by experts in China and in external organisations worldwide, such as the Wildlife Conservation Society.

We have to hope that the Wuhan outbreak is a wake-up call for regulation of wildlife trade and animal health, action that is urgently needed to protect human health and the environment.

Diana Bell is Professor of Conservation Biology, University of East Anglia. This commentary first appeared in The Conversation.

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Commentary: Allowing employees to work from home can help South Korea manage the Wuhan virus

SEOUL: The website of South Korea’s public health authority currently features an image of a smartly dressed woman and man wearing masks while posing in front of a mishmash of signboards written in Chinese characters. 

In depicting two people who are remaining calm while exercising caution as a new coronavirus afflicts the country and businesses and families brace for disruption, the government appears to be telling its people: Do not panic but do wear a mask. 

Next to the photo is a message imploring all South Koreans to take part in efforts to prevent the spread of coronavirus, a mysterious new illness in the country.

READ: Wuhan virus: Number of cases in China tops 800, death toll hits 26

While the government is calling on the country as a whole to work to keep South Korea safe, this latest health scare underscores the reality that in this country, it is still the government that is responsible for management during challenging times. 


South Korea this week reported two cases of the new coronavirus that appears to have originated in the Chinese city of Wuhan and has also been reported in Singapore, Thailand, Taiwan and Japan. 

The number of cases in China grew to more than 800 this week, raising fears of a global pandemic, with even the US reporting a case. 

In an unfortunate bit of timing, while South Koreans are fretting over the disease this week, the country announced its weakest economic growth since the global financial crisis of a decade ago. 

Of late, South Korea’s export-dependent economy has dealt with tremors from the trade conflict between the United States and China, as well as the country’s own spat with Japan. 

READ: South Korea confirms second case of Wuhan virus

In announcing the weak growth figures, a central bank official highlighted how the new coronavirus could pose a risk to consumption as happened in 2015 when there was an outbreak of the Middle Eastern Respiratory Syndrome (MERS) in the country.


South Korea’s economy ought to be less vulnerable than ever to a public health crisis, as there are now ways for businesses to maintain operations with workers not being in the same physical space.

This is a country with some of the most widely available Wi-Fi connection anywhere in the world, meaning that it wouldn’t be difficult for workers to be just as productive from home.

South Korea was hit by the Middle Eastern Respiratory Syndrome (MERS) in 2015 which saw consumption and tourism decline.

But despite having the technological infrastructure, South Korea has generally been slow to adapt to workplace evolutions like remote working.

The country’s traditions of collectivism still posit that all members of a team should, whenever possible, be together in the office for the whole day. Someone who suggests that they would prefer to spend the day at home by themselves than in the office with the team might be seen as selfish or anti-social. 

READ: Commentary: Snakes possible source of Wuhan virus but more research needed

Beyond trust or perception issues, there is a deeper problem of a risk-averse culture in South Korea that deters employers from taking such bold moves.


If South Korea seems risk averse, part of this may be explained by the country’s national psyche.

Having fought a destructive civil war in the early 1950s, many Koreans were left feeling that the country got a late start and had to work harder than others to develop. 

Having built a successful economy, Korean policymakers sometimes fear potential blowback from risky moves.

That thinking is also extended to organisational cultures, where newer additions such as flexible work arrangements and remote working are deemed contrarian to and may dilute the ethos of a strong work ethic built into the national psyche.

I remember years ago one successful Korean businessman telling me over dinner, “You in the West had a head start on us. We lost our country once. We cannot lose it again.” 


That risk averse mind-set also extends to the government, which has been facing criticism for stifling innovation.

READ: Commentary: Wuhan virus compounds challenges facing China

A telling example is the case of Tada, a ride-sharing service. The country’s large and vocal taxi lobby successfully pushed the government to enact legislation that would ban Tada from operating, arguing that the company could push traditional taxis out of business.

To many, the case of Tada sent the message that the Korean government is more interested in protecting vested interests than in promoting innovation. 

TADA MVL founder-CEO Kay Woo
South Korean Kay Woo is the founder and CEO of MVL – the company behind blockchain-based ride-hailing app TADA. (Photo: Tang See Kit)

This week, in a case local media dubbed “revenge of the nerds,” a group of tech entrepreneurs launched a political movement with the hope of pushing through regulatory reform that would create conditions for innovation. 

The founders describe being frustrated at the government who promise to ease red tape, then fail to follow through.

According to one founder, South Korea has missed out on chances in cloud, big data, drones, autonomous driving, blockchain and sharing-economy technology because of the regulations.


That perception of an indecisive government was also reienforced during the last epidemic outbreak in South Korea – MERS in 2015. Many here are making comparisons with that episode to question if things will be managed better this time around.

The South Korean public was critical of the government in 2015 for bungling its response to the outbreak by failing to properly implement quarantine measures and not sharing information transparently with the public. 

READ: Commentary: Wuhan virus sparks questions over local Chinese officials’ disclosure of information

Still, even though 36 people died out of 186 reported cases, MERS never snowballed into the full-blown pandemic many feared, but the uncertainty surrounding the ailment took a toll on South Korea’s economy, leading to steep drops in travel and many forms of consumer spending. 

This time around, the country’s public health authorities appear to be more decisive in taking steps to manage the risk of contagion. Airports and seaports have announced stepped-up screening measures, with separate procedures for flights from Wuhan. 

But that boldness and decisiveness from the government must extend wider.


In times of crisis in South Korea, it is the government that is expected to lead. South Koreans look to official institutions for guidelines, and if things don’t go well, it’s the government that gets the blame.

Similarly, businesses and organisations will also be looking to signals from the government in implementing working arrangements to contain the risks to the workforce and the economy.

A new South Korean law will criminalise business owners who unfairly dismiss employees harassed at
Despite having the technological infrastructure, South Korea has generally been slow to adapt to workplace evolutions like remote working. AFP/Jung Yeon-je

Ironically, the outbreak of this virus may provide the government with an opportunity to ease flexible working arrangements into the workplace culture in South Korea. That may not be a bad thing in taking a step towards a more innovative and risk-taking culture overall.

More pressingly, if the South Korean government is serious about not letting the Wuhan virus take a significant hit on its economy, then implementing business continuity processes is a crucial step that has to come sooner rather than later.

During MERS in 2015, the slow response and lack of transparency by the government saw measures to contain the virus such as school closures and making public the list of hospitals affected with cases carried out almost a month after the first case in May.

Even then, without any clear signal from the government and lax isolation or quarantine measures, few companies implemented business continuity processes to isolate their staff from the risks. 

In the coming days, we will find out how much the South Korean government has learned from the experience with MERS. 

Yesterday, my phone buzzed with an urgent message from the government, the kind of text they send out when monsoon rains create risk of flood, or when air pollution rises to dangerous levels, imploring everyone to wash their hands, cover their mouths when coughing, and yes, wear a mask. 

I hope to receive another such government alert soon that advises employers to take the necessary steps to protect their business processes, including allowing their staff to work from home.

Steven Borowiec is the politics editor of Korea Expose.