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While Chinese-owned businesses struggle through a downturn, questions remain about whether Australia’s coronavirus response stoked racist fear. By Mike Seccombe.

COVID-19: Racism, economics and the aftermath

The Norwegian Jewel cruise ship docked in Sydney Harbour last week while health authorities tested a man for coronavirus.
Credit: Lisa Maree Williams / Getty Images

Even as we speak, Faye Zheng, managing director of Variety Travel in Chatswood, Sydney, is watching her business fall away.

Part way through our interview, an email drops into her inbox and she pauses to read it: another cancellation.

“One of my very regular clients booked an Alaska cruise with Princess, but they’re cancelling that,” she says. She’s disappointed but doesn’t sound surprised.

The outbreak of coronavirus has hit Zheng’s travel business hard. But Alaska seems a long way from Wuhan. The booking involved a flight connection on Japan Airlines, she explains, via Tokyo.

And Japan is the country worst affected by the virus after China, with more than 700 cases of COVID-19 – as the disease now is officially designated. Ninety per cent of those cases are aboard the Princess Cruises vessel Diamond Princess, quarantined in Yokohama.

“We can see cancellations coming day by day,” says Zheng. “It is scary. I mean, I totally understand where they are [coming] from.”

But business is down 60 to 70 per cent. In the first couple of weeks after the coronavirus outbreak, the dropoff was mostly in the inbound market, a consequence of the government’s travel ban on those visiting from China, which was implemented on February 1. Increasingly, though, Zheng says the outbound market has suffered, too.

Cruise bookings are down sharply, likely due to the wall-to-wall coverage of the ever-escalating infection rate aboard Diamond Princess.

Variety Travel has operated since 1997 from the same premises in Chatswood, where more than a third of the population is of Chinese background. Zheng’s clientele also is heavily Chinese and Chinese Australian, and she specialises in the Asian market. She says this means her operation was probably hit harder than most by the collapse of the inbound market. But now the virus is affecting the whole tourism sector equally.

“This is a global issue now,” she says.

The effects are likely to be protracted, whatever the future course of COVID-19. Cruise and tour bookings are often made six or nine months in advance, and travellers have an incentive to cancel early and cut their losses, sacrificing “the minimum amount of their deposit”.

Maybe things will get better in a few months, in the new financial year, Zheng hopes. For now, though, Variety Travel has no option but to “tough it out” – pushing staff to take holidays, cutting work hours.

Steven Zheng, no relation, has a similar story to tell from Melbourne’s hospitality trade. He and his family own a couple of restaurants in the suburb of Box Hill, an area with a high proportion of residents from a Chinese background. At the end of January, he says, his restaurants’ trade “fell off a cliff”.

It’s worth recalling just how fast the coronavirus crisis developed. It was only in mid-January that the Chinese government health authorities confirmed person-to-person spread of the virus. The number of cases and deaths grew rapidly and began to turn up outside Wuhan and Hubei Province – first in other parts of China, then in other countries. Less than a month ago, on January 25, the first case was identified in Australia, followed by several more.

It was reported that a man who had tested positive for the virus had eaten at a Chinese restaurant in Glen Waverley, about seven kilometres south-east of Box Hill, on the evening of January 26.

Despite assurances from health authorities that there was no danger to anyone who was not in that restaurant at that time, customers stayed away.

“This is normally a vibrant area,” Zheng says. “Almost overnight, Box Hill turned into a ghost town.”

The suburb’s big annual event, the Orion festival celebrating Chinese New Year, which was slated to happen on February 1, was postponed indefinitely. Last year, it had drawn 200,000 people; now the organisers were scared no one would turn up.

Zheng says his customers fell by about 70 per cent, although this has recently bounced back somewhat, to about half its normal level.

A survey by the local business association revealed similar dramatic falls in trade for other Chinese-run businesses, according to Zheng, resulting in “a few” closures and many more owners reducing staff numbers or hours and seeking to negotiate breaks with landlords. Zheng points to the shopping centre giant Vicinity, which this week cited coronavirus as a reason for cutting its revenue forecast for this year by about 2.2 per cent.

Grant Kelley, Vicinity’s managing director, said nearly 60 per cent of malls owned by the group have experienced a downturn because of coronavirus.

Zheng lays some blame on sensationalist reporting, in particular by Melbourne’s Herald Sun.

On January 29, the Murdoch tabloid carried a cheap-pun headline: “Chinese Virus Pandamonium”. The same day, its Sydney stablemate, The Daily Telegraph, ran with “China kids stay home”. Neither reflected the nuance of official advice that only those who had been in, or transited through, China during the previous 14 days should self-quarantine – whether they were ethnically Chinese or not.

According to Steven Zheng, misinformation about the disease has stoked fear in his own community, too.

And though he recriminates the Murdoch tabloids and Daily Mail Australia, which on January 31 labelled his local area, along with Sydney’s Hurstville, Chatswood and Burwood, as “contagion hotspots … where Australians are most at risk of being exposed to deadly coronavirus”, he suggests most Chinese Australians were not influenced by these sources.

He points instead to social media, particularly WeChat, as the prime source of information for many in the Chinese community, “particularly for newer immigrants”.

And the directive coming through WeChat was that people should stay home and not expose themselves to the risk of catching the virus. Although it was directed at China’s domestic population, for whom the threat of contagion was real, the message was absorbed by many in Australia as well.

Three weeks ago, a petition was launched through Change.org on behalf of the Chinese–Australian community, condemning the News Corp papers’ sensationalism as “downright offensive and unacceptable race discrimination” and calling for a public apology. It has since garnered more than 80,000 signatures.

The Saturday Paper can also report that Colour Code, a GetUp! spinoff that campaigns on First Nations and multicultural causes, is organising a mass representation to the Australian Press Council about the headlines.

By midweek, it had collated more than 740 separate complaints from individuals who were offended by the papers, or believed they encouraged racist abuse, as well as from a variety of organisations claiming to speak for the broader Chinese community.

In a statement last Friday, the Federation of Ethnic Communities’ Councils of Australia (FECCA) did not specifically condemn any media, but it linked concerns about coronavirus to a “rising tide of subtle racism and discrimination in the community”.

FECCA called for the establishment of a national anti-racism strategy and campaign, and quoted its chairperson, Mary Patetsos, claiming racism and discrimination were “spreading much faster than the coronavirus” in Australia.

Asked for examples of racist behaviour, Patetsos responded with two. One, “a young person on a bus who felt very isolated because no one would sit next to them”; the other, a woman who went to the doctor and the surgery “basically emptied”, even though she was going for something that was completely unrelated.

Patetsos cited calls to FECCA and “a lot of activity on social media”.

But Patetsos said she could not speak to cases in which people had experienced “actual persecution or extreme racism” because those would have to be made as official complaints to the Human Rights Commission.

There have also been incidents well-publicised in the media, including the case of a Melbourne Uber driver who would not pick up an Asian passenger, texting him: “I don’t need coronavirus.” There was also the nightclub that promoted itself by offering free Corona beers and face masks, using an image of an Asian in a coolie hat and mask on its poster. And the Harvey Norman store in Ballarat that displayed a crudely lettered sign reading, “No Coronavirus in our mattresses as ours are Australian made!”

It is understood that the Australian Human Rights Commission has experienced an increase in people contacting them about issues of racial discrimination since the coronavirus outbreak. Specifically, some 45 per cent of complaints accepted – that is preliminarily assessed as prima facie racism – since the start of this month related to discriminatory treatment of Chinese people in relation to coronavirus.

A significant proportion related to discrimination in the provision of services to people because of their ethnicity.

This is illegal under section 13 of the Racial Discrimination Act. Which is to say that if a restaurant, or school – or, as noted earlier, an Uber driver – refuses service to a person solely on the basis that they look Chinese, it is an offence.

The commission proceeds under strict confidentiality, but the indications suggest there could be trouble ahead for some businesses.

There have also been an unusual number of complaints from people who say they have been subjected to abuse or disparagement on the basis of their race.

The commission will make its determinations in the coming months.

On February 7, the New Daily news site carried a report about Chinese research that suggested pangolins might have been an “intermediate host” between bats and humans in the evolution of the new virus. It was a very straight report and noted inter alia that pangolins are widely trafficked in Asia, despite being protected and endangered, because “the meat is considered a delicacy in China and its scales are used in traditional medicine”.

All accurate and true, but the story carried the headline: “The pangolin’s revenge? Rare ‘delicacy’ may be origin of coronavirus”.

The implication that nature was striking back at Chinese cultural and dietary practices echoed a theme prominent on social media, much of which was very ugly, suggesting the victims of the virus deserved their fate.

Sparring matches between the pangolin’s supporters and critics of how the media framed the research eclipsed any discussion of a legitimate issue. Chinese markets, where a wide variety of species are kept in close proximity, have been blamed for harbouring new outbreaks – particularly zoonotic diseases such as coronavirus, which can make the jump to humans – as the Chinese government conceded after the SARS epidemic 17 years ago. But it did little to clean them up.

Without meaningful action, it is likely COVID-19 will not be the last coronavirus outbreak that begins in this way.

Professor Warwick McKibbin, director of the Centre for Applied Macroeconomic Analysis at the ANU Crawford School of Public Policy, has considerable history in calculating the cost of disease outbreaks.

The official World Health Organization estimate of the global cost of the 2002-03 SARS outbreak was taken from his modelling.

That was $40 billion.

No one can yet estimate the eventual cost of COVID-19, because we don’t know the future course of the disease. There are some signs its spread is being contained in China, but meanwhile it is spreading to other nations. What we can be sure of is that it will be much greater than SARS. China is far more enmeshed with global markets than it was in the early 2000s, and its economy is now by some estimates the second-largest in the world.

“Even if it stopped today,” McKibbin says, “the cost will be at least four times as great.”

And probably more. So far, McKibbin suggests, a reasonable estimate is “a couple of hundred billion dollars”.

He declines to put a figure on the cost to Australia – he’s still working on it – but it’s fair to say this country will be heavily impacted.

“During SARS,” McKibbin says, “it was relatively small, but it’s actually looking like it’s going to be a lot bigger this time – because you’ve got the education effects [which have] been large, the tourism effects have been very large and the impact on demand in China, which is much larger now it’s our biggest trading partner.

“The economic costs almost all come from changes to people’s behaviour, rather than the disease itself.”

In the case of SARS, 774 people died in about two dozen countries. It is invidious to place a dollar value on human life, but clearly the economic productivity lost with each of those lives was not $500-odd million.

It raises the question of why governments around the world have enforced such dramatic changes in behaviour, given that other diseases, including the seasonal flu, kill far more people each year than COVID-19 has thus far.

The answer, says McKibbin, is that we simply don’t know how bad this coronavirus outbreak could get. What we do know is that it spreads readily and has a mortality rate of about 2.3 per cent, compared with about 0.1 per cent for the regular flu. So, the precautionary principle necessitates a strong response.

McKibbin also suggests the Australian government’s money would be best spent undertaking an advertising campaign about hygiene, given that the single best preventative measure against the virus is simple handwashing.

Such a campaign could be effective in slowing the spread of the virus; allaying the fears of the public, and the subsequent economic impacts, may prove less straightforward.

Felicity Emmett, senior economist with ANZ, says by the bank’s estimates Australia’s GDP will be negative in the first quarter of this year. The impact of coronavirus will slash 0.5 per cent from the economy, on top of a 0.1 per cent hit from the bushfires.

And, she says, it could well be greater, because the figuring was predicated on the impacts in education and tourism.

“It depends a lot on the travel ban, which in turn depends on the evolution of the virus,” she says.

“I think there’s downside risk to it, because what we couldn’t really quantify was the other impacts there might be in terms of the disruption to the supply chain and how that might affect Australian [economic] activity.

“The supply chain has become very complicated and often China is central to it.”

If the crisis is protracted, we could see shortages in building materials, price falls in mineral exports, declines in tax revenue, the need for government stimulus, and the evaporation of its much-touted budget surplus.

Emmett spoke to me a couple of days ago, before Qantas announced it was cutting its flight capacity by 15 per cent until at least May, was laying off 700 staff and expected an earnings decline of between $100 million and $150 million this year. Core evidence of the “downside risk” of which she spoke.

Day by day, it seems, the news gets worse, here and around the world. And there is little point in apportioning blame.

As Faye Zheng says, it’s not a Chinese problem. This is a global issue now.

This article was first published in the print edition of The Saturday Paper on Feb 22, 2020 as "COVID-19: Racism, economics and the aftermath".

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Mike Seccombe
is The Saturday Paper’s national correspondent.

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