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Breaking the Winner’s Curse

Jul 21, 2021
  • An Gang

    Research Fellow, Center for International Strategy and Security, Tsinghua University

Singapore’s government announced recently that it would stop updating the number of daily cases and severe cases of COVID-19, and it told its citizens that COVID-19 would be treated as an endemic illness.

“It is possible to live normally with it in our midst,” the authorities said. Nevertheless, the government said it would continue with stringent border testing and vaccine passports and normalize vaccinations year by year.

Singapore, a city-state that relies heavily on globalization and foreign exchanges, and which is home to a large number of foreign workers, has been struggling during the pandemic for more than a year. After several lockdowns, it has kept its people safe and returned to normal. A relatively small number of infections — approximately 60,000 — and a mortality rate as low as 0.1 percent were recorded, making it one of those countries that coped best with the pandemic.

During the pandemic, I chatted online occasionally with some of my friends in Singapore, and they told me how life and work had been affected. They believed that, except for a cluster of infections in the workers’ dormitories in early 2021, Singapore had not made any major mistakes in handling the coronavirus. Nowadays, many advanced vaccines from around the world are available, and people have developed habits for living with the virus, which is why the authorities decided to adjust their policies. They also said that many Chinese citizens in Singapore were concerned about the long-term efficacy of Pfizer vaccines, so they line up to procure Sinovac shots from China at their own expense.

Singapore’s move suggests that the global fight against COVID-19 is entering a new phase. Given the constant mutations of the virus, some governments have come to the conclusion that based on the way people live in society and their preference for personal freedom, China’s response to the virus is worth learning from, but cannot not be replicated. The goal of zero transmission is impossible without absolute quarantine.

Meanwhile, substantial progress has been made in the research and development of vaccines, antiviral drugs, and treatments. These developments have proved effective in dealing with COVID-19 and new variants, especially in reducing severe illness and death. Global vaccination is gathering pace, and humankind continues to gain more experience in beating back a resurgent threat.

These days, advisers to the Singapore government often mention the “winner’s curse,” a concept from the auction industry and stock market. They believe that East Asian citizens have been well protected from the pandemic by their governments, that they had a strong sense of discipline and that they were willing to follow government instructions, which formed a closed-loop framework. People are content where the coronavirus is well contained, and would be loath to see a COVID-19 resurgence if restrictions were eased, which makes government hesitant to roll back restrictions. As such, the East Asian countries that were the first in the world to quell the pandemic may turn out to be the last to eradicate it.

Singapore, as a bridge between East and West, is the first East Asian country that decided to adjust its COVID policies to break the winner’s curse. It could be felt that Singapore is confident in its capability to prevent and control the spread of the virus, and it has developed a model for handling COVID-19 that is compatible with its own circumstances. Furthermore, this small city-state has quickly grasped the trend of the emerging international order in the post-pandemic era.

Despite the pandemic, the international community will not remain closed and cloistered for long. The U.S., which botched its COVID-19 response, and its allies and partners are eager to ease restrictions and open their borders to each other, based on the resolution they reached in the G7 Summit this year. They will use vaccines and antiviral drugs as a safety net and deal flexibly with an array of challenges in an attempt to return to “normal” soon.

To compete with China, the Biden administration is engaging closely with the U.S. Congress in a bid to initiate a strategy for boosting domestic innovation and renew the country’s supply chain. This strategy requires support from Washington’s allies and partners all over the world. And so the Biden administration, in the guise of common values, coaxed them with vaccine assistance, re-opening borders and global infrastructure initiatives, all part of its effort to define the post-pandemic international agenda.

Many small and medium-sized countries acknowledge China’s increasing influence. Confronting a new polarization in the world, however, they are more dependent on the U.S. in terms of security. They are most worried that the future international order, fueled by the pandemic and Washington’s renewed China policy, will split into two supply chains and two value systems. If the U.S. and its Western partners open to each other first, restructure global supply chains and double down in the tech fight against China, the shift in the way the world runs will accelerate, thus worsening the dilemma these small and medium-sized countries face.

For these countries, the essential issue of the international order in the post-pandemic era is whether they will face one world or two. They understand that they cannot move smoothly between two worlds, and they must prepare.

China is among the first countries in the world to defeat COVID-19 and secure an economic recovery. It plays a critical role in stabilizing the global supply chain. New international public goods provided by China, including programs like the Belt and Road Initiative, have gained all-around momentum. The effectiveness of the Chinese model has also been evaluated by the international community. As a result, slanders of China have been questioned.

Up to now, China is a big winner in the global COVID-19 crisis, which the U.S. and other Western countries are reluctant to admit. Of particular note is that the novel coronavirus will linger on a global scale for a long time and continue to threaten humankind — or to exert deeper influence in some areas. China, therefore, must be cautious and break the winner’s curse. It must remain levelheaded and modest, sustain its victory over the pandemic through diligence and timely adjustments based on the changing situation and keep the elbow room it obtained in diplomacy and public opinion during the pandemic. This way will ultimately help it cope better with international changes in the post-pandemic era.

“Post-pandemic” does not mean the end of the pandemic, but an era in which human coexist with the virus. This will open a new chapter in the evolution of the international order, and the modes of states’ engagement, international mobility, border management  and economic and trade models will change accordingly. China, which has the upper hand, cannot afford to lag.

China should pay attention to the compatibility of its COVID-19 policies with those of the rest of the world. While carrying out vaccinations, upgrading vaccines and improving treatment methods, China should intensify research into the challenges it might encounter in the global recognition of vaccination certificates. It should also continuously improve its long-term COVID-19 response mechanism, keep its citizens fully informed and avoid an “openness gap” resulting from long-term restrictions on personnel exchanges between China and other countries.

China should pay close attention to changes in the structure and center of the global supply chain after borders reopen. Some goods China provided to the world, sought-after in the overseas market, may end up with a surplus. Consequently, Beijing must adjust its macro policy and product mix in time and ramp up its “dual circulations” in the economic-industrial landscape.

China should also prepare for the arrival of a new era of power competition, step up to develop its strategies and policies toward the U.S. and redefine its future relations with Washington. Whatever its choice, China must strike a balance between rivalry and dispute management and remain ready to work with the U.S. It should also seek support from third-party forces to avoid a shift from “bipolar competition” to “bipolar confrontation” between the two powers due to policy differences and clashes on specific issues.

Regarding China’s international strategies and foreign policies, the end is not to win but to create favorable conditions for its smooth growth and peaceful rise and to contribute its energy, solutions and assurances of world peace and development.

Behind closed doors, China cannot develop itself, nor can it move to the center of the world stage. In meeting challenges and realizing its ambitions, “opening-up” is a key phrase that can not just counter U.S. containment of China but can help keep its initiative moving forward in a shifting world.

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