PENING STATEMENT BY VICE CHAIRMAN C. RICHARD D’AMATO

U.S.-China Economic & Security Review Commission

Hearing on SARS in China: Implications for Media Control and the Economy

June 5, 2003

124 Dirksen Senate Office Building

Thank you, Roger. I also welcome Senator Nelson and Senator Burns, who have recently been to China traveling with the Majority Leader on official Senate business, and Senator Kyl and Representative Cox, principal supporters of the Global Internet Freedom Act.

Our topic is timely. The Chinese Government’s initial denial — to its own people and the world — that it faced a serious SARS problem brought condemnation and criticism from many quarters. Not least from China’s neighbors and international public health officials who found themselves battling an unknown disease without the benefit of full access to information from its country of origin.

Ordinary Chinese citizens have been eloquent in their expressions of mistrust of their government. In late April one million voted with their feet when they vacated the capital soon after the government revealed that the number of SARS cases in Beijing had been seriously underreported. Before that, cell phone text messaging volume broke all prior records as citizens frantically sought sources of reliable information on the spread of this new disease. Since the April 20^th dismissal from office of China’s Health Minister and Beijing’s Mayor, the Chinese Government — led by President Hu and Premier Wen — have ordered full and accurate reporting of SARS cases in government channels. China now reports a steep decline in new SARS cases and deaths from the disease. What degree of confidence should we have in these new numbers?

The basic question is: What does the public health problem of Severe Acute Respiratory Syndrome — SARS — mean for China’s future, and what does it reveal about China’s present? Within this Commission’s mandate of assessing Chinese media control efforts and economic development, there are many questions needing exploration. I note with disappointment the account in the Washington Post a couple of days ago that the Chinese government is back-pedaling furiously, denying the problem again and asserting that everything is under control.

We will examine the strains put on China’s political system by the SARS public health challenge. How effectively has the new leadership has responded? What does the SARS episode reveal about leadership dynamics and about public confidence in the state apparatus? What does it mean for long-term openness in China?

There is a fundamental contradiction in the PRC Government’s approach to information which has been brought into sharper focus during the SARS epidemic. China continues to build out rapidly a modern telecommunications infrastructure, involving billions of dollars of investment and millions of new internet and cell phone users each year. Information technology is vital to China’s success in a densely-connected global production system. China is more and more "wired" at home and "connected" abroad. Yet in the face of this remarkable expansion of "IT" and business information, the Chinese Communist Party continues to attempt strict control on broadly-defined categories of "sensitive information" and "political expression."

Those controls may tighten or loosen depending on conditions; but the Party clearly wants to tightly control propaganda and "thought work". We will hear about China’s "internet police" and the jamming and blocking of broadcasts and websites and consider whether these measures are keeping up with anti-censorship technologies and the inflow of independent sources of information. We will look at how media controls and secrecy exacerbated the SARS outbreak, but also assess how "new media" contributed to exposing the government’s cover-up. We will also examine how the US Government and non-government actors are working to facilitate broader access by the Chinese people to reliable, uncensored news and information. There are exciting new developments in this area which promise a permanent breach of the "Great Firewall" the government has erected around China.

We will also look at whether Chinese media organizations are being more assertive or not, in light of SARS. And at the political pressure faced by independent-minded journalists and editors.

Finally, we will consider the economic implications of the SARS situation for China. We will try to assess the direct costs to society of the disease itself and of longer-term investments that need to be made to China’s public health infrastructure. We will hear from experts on the economic and business outlook for China and the region. Are there new risks inherent in doing business in China? Has foreign investor confidence been shaken by SARS and by fears that future SARS-like crises will not be met with effective government action? Is the "SARS effect" — with the disease now apparently under control in most regions — going to be just a blip on the economic charts, having little impact on China’s economic growth and no transformational effect on its economic system? Or, if the disease continues to spread, or resurges in the fall, will it lead to a fundamental shift in trade and investment with China?

With the assistance of Senators Nelson, Burns, and Kyl, and later Representative Cox, we will touch on some of these questions in our opening discussion. Then we will assemble, in sequence, three panels of experts on media control and the economic impact of SARS.

We look forward to a productive day.