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Coronavirus

Coronavirus forces China’s neighbors to make tough choices over health, fear and trade

Grady McGregor
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Grady McGregor
Grady McGregor
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Grady McGregor
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Grady McGregor
Grady McGregor
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February 3, 2020, 7:41 AM ET

Thailand’s capital city of Bangkok has one of the highest rates of coronavirus outside of mainland China with 19 confirmed cases, masks are nearly ubiquitous in public spaces, and there are growing online calls to implement an outright ban on travelers from mainland China.

Yet Thailand’s borders remain open and dozens of flights continue to arrive in Thai airports from cities across China, even as a growing list of countries near and far from China have imposed strict restrictions on travelers from mainland China.

This decision has subjected the Thai government of Prime Minister Prayut Chan-o-cha to heavy criticism, but he has so far limited himself to noting the two countries’ “special bond of friendship” and offering “moral support and spirited encouragement” to China.

For countries like Thailand, the coronavirus brings up a particularly thorny set of questions that have forced authorities to balance their citizen’s health and fears with China’s economic weight.

One the one hand, Thailand (along with many of its neighbors) have grown increasingly dependent on Chinese investment, trade and tourism to help sustain their economies. On the other, domestic concerns about the virus are growing and governments don’t want to be seen as making the situation worse by kowtowing to Beijing.

“Government officials are likely considering not only the short-term economic impacts of a drop in Chinese visitors and trade, but the longer-term economic and political effects of upsetting Chinese officials and investors,” said Ian Rowen, professor of Geography and Urban Planning at Singapore’s Nanyang Technological University.

The WHO and China’s response

On Friday, the World Health Organization (WHO) classified China’s coronavirus outbreak as a ‘global health emergency,’ but WHO chief Tedros Adhanom Ghebreyesus went out of his way to urge countries not to implement travel bans.

“WHO doesn’t recommend and actually opposes any restrictions for travel and trade or other measures against China,” Tedros said. “If anyone is thinking about taking measures, it’s going to be wrong.”

Thus far, the list of countries to impose full or partial travel restrictions from Chinese travelers includes, the United States, Israel, Japan, South Korea, Vietnam, Iraq, Indonesia, Australia, the Philippines (which just reported the first virus-related death outside China), and several others.

China has cited Tedros’ comments when rebuking countries for imposing travel bans from China. “While the WHO has only just specifically advised against any travel restrictions, the U.S. has decided to act in the opposite way,” said Hua Chunying, a spokeswoman for China’s Ministry of Foreign Affairs. “This has set a bad example. It is certainly not a gesture of goodwill.”

When Israel decided to impose its travel ban, China’s embassy in Jerusalem even said the choice was “reminiscent of the holocaust,” though they later apologized for the remarks.

“[Such] overheated public rhetoric… can only make one wonder what is happening off the record,” Rowen said.

Tourism impact

As China has battled with the U.S. and Israel over their travel restrictions, countries closer to home—and more dependent on China’s tourists—have taken a softer approach.

In the last few years, China’s outbound tourists have become an increasingly powerful force on the global stage. In 2018 alone, Chinese tourists spent $277 billion on international trips, which far outpaced the second closest country, the U.S., whose tourists spent only $144 billion abroad, according to the United Nations World Tourism Organization (UNWTO).

This impact has been especially felt in southeast Asia.

In Thailand, where tourism accounts for over 10% of the country’s GDP, Chinese tourists now make up over a quarter of all visitors to the country, according to the Bangkok Post. In Cambodia and Vietnam, Chinese tourists also make up nearly a third of all visitors to each country.

In addition to tourism, China has invested billions of dollars into southeast Asia in the last few years as part of the country’s Belt and Road Initiative. In Cambodia, for example, China is helping transform the city of Sihanoukville through funding the construction of infrastructure projects and a special economic zone.

As he addressed the impact of the coronavirus, Hun Sen, the prime minister of Cambodia, which has not restricted incoming travel from China, stuck close to Beijing’s line. “Is there any Cambodian or foreigner in Cambodia who has died of the disease?” he said. “The real disease happening in Cambodia right now is the disease of fear. It is not the coronavirus that occurs in China’s Wuhan city.”

Anti-Chinese attitudes

On a personal level, however, anti-Chinese sentiments across southeast Asia have been spreading long before the outbreak.

As the coronavirus outbreak widens, these attitudes have taken even stronger hold as shops in countries like Japan and Vietnam told Chinese tourists that they weren’t welcome. In Indonesia, protesters even gathered to protest outside a hotel with Chinese tourists.

For Rowen, this treatment “illuminates not only racism and prejudices between [Chinese] guests and [local] hosts, or between people of Chinese descent and others, but also fear of the Chinese state.”

In the end, Rowen explained, countries that manage to stay on China’s good side during the outbreak may see benefits down the line.

“Cambodia, and perhaps even the Philippines, which took a bit longer to close its borders, and only did so after a considerable public backlash, may be rewarded later for their tacit support, whether with increased tourist arrivals or other forms of investment,” Rowen said.

More must-read stories from Fortune:

—Global companies enter lockdown mode as coronavirus rocks China
—Deutsche Bank’s “annus horribilis” reveals the true cost of negative interest rates
—As the coronavirus spreads, these stocks are the most exposed
—Mysterious GPS outages are wracking the shipping industry
—Fortune Explains: Tariffs and trade wars

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Grady McGregor
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