The HINDU Notes – 11th March 2020 - VISION

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Wednesday, March 11, 2020

The HINDU Notes – 11th March 2020

📰 LPG scheme closed, but only 3 States have gone kerosene-free

Parliamentary panel says there is still a lot of ground to cover

•A parliamentary committee has said only three States and five Union Territories have become kerosene-free, though the government last September met the target of eight crore LPG connections under the Pradhan Mantri Ujjwala Yojana.

•The report of the Parliamentary Committee on Petroleum, which was tabled last week, points to the gap between the continuing use of kerosene and the claim of 97% LPG coverage nationwide. The committee is headed by BJP member Ramesh Bidhuri.

•The allocation for the scheme has been cut down by 58% from Rs. 2,724 crore during 2019-20 to Rs. 1,118 crore during 2020-21. The Petroleum Ministry informed the committee that the government had met the target on September 7, 2019, and 96.9% coverage had been achieved nationwide, except in Jammu and Kashmir. The Ministry said the scheme was no longer running, and the present allocation was meant to meet the arrears in the reimbursement of expenditure.

•The 97% coverage has been calculated on the basis of the number of households — it stands at 2,850.5 lakh as on February 1 this year — and the domestic LPG consumers, at 2,772.2 lakh.

•The committee was upset at the closure of the scheme, and said there was still a lot of ground to cover. “There are poor households in the general category in urban and semi-urban localities that also need to be covered. The committee, therefore, recommends that the scheme be extended to poor households in urban and semi-urban slum areas and achieve a higher LPG coverage of the population by providing connections to households that do not have LPG,” the report said.

•At the same time, the committee said, large segments of people in various States still depended on kerosene for cooking and household lighting. The Ministry has justified the low number of ‘kerosene-free’ States and Union Territories, saying their consent is critical. Karnataka, Telangana, Haryana, Nagaland, Bihar, Gujarat, Rajasthan, Maharashtra, Goa, Andhra Pradesh, Chandigarh and Puducherry have gone for a voluntary cut.

•Only three States — Haryana, Punjab and Andhra Pradesh — and the Union Territories of Delhi, Chandigarh, Daman & Diu, Dadar & Nagar Haveli, Andaman & Nicobar Islands and Puducherry have become kerosene-free.

📰 Oil surges on hope of economic stimulus

Russia may smoke peace pipe with OPEC

•Oil prices surged by around 8% on Tuesday, a day after the biggest rout in nearly 30 years as investors eyed the possibility of economic stimulus and Russia signalled that talks with OPEC remained possible.

•U.S. President Donald Trump on Monday said he will be taking “major” steps to gird the U.S. economy against the impact of the spreading COVID-19 outbreak, while Japan’s government plans to spend more than $4 billion in a second package of steps to cope with the virus.

•Brent crude futures were up $2.80, around 8%, to $37.16 a barrel by 7.24 p.m. IST, after hitting a session high of $38.22 a barrel.

•West Texas Intermediate (WTI) crude gained $2.42, or around 8%, to $33.55 a barrel, after hitting a high of $34.60.

Black Monday

•Both benchmarks plunged 25% on Monday, dropping to their lowest levels since February 2016 and recording their biggest one-day percentage declines since January 17, 1991, when oil prices fell at the outset of the first Gulf War.

•Trading volumes in the front-month for both contracts hit record highs in the previous session after three years of cooperation between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday, triggering a price war for market share.

•Saudi, the world’s biggest oil exporter, escalated tensions with plans to supply 12.3 million barrels per day (bpd) in April, well above current production levels of 9.7 million bpd, Saudi Aramco CEO Amin Nasser said.

•April’s crude supply will be “300,000 barrels per day over the companys maximum sustained capacity of 12 million bpd,” Mr. Nasser said in a statement.

Joint steps with Russia

•Russian Oil Minister Alexander Novak said he did not rule out joint measures with OPEC to stabilise the market, adding that the next OPEC+ meeting was planned for May-June.

•But in response, Saudi Arabia’s Energy Minister said he did not see a need to hold an OPEC+ meeting in May-June if there was no agreement on what stepsshould be taken to deal with the impact of the COVID-19 on oil demand and prices.

•“I fail to see the wisdom for holding meetings in May-June that would only demonstrate our failure in attending to what we should have done in a crisis like this and taking the necessary measures,” Prince Abdulaziz bin Salman said.

•“Price wars and pandemics are nothing new to the commodity markets, but both occurring simultaneously is something we have yet to witness in our careers,” RBC analysts said.

•Crude was also supported by hopes for a settlement to the price war and potential U.S. output cuts, although analysts warned gains may be temporary as oil demand continues to be hit by COVID-19 outbreak, which has spread beyond China and prompted Italy to implement a nationwide lockdown.

📰 For a universal status of personhood

In instilling a regime where there is a presumption against citizenship, the Foreigners Act denies the weakest their rights

•A series of judgments delivered by the Gauhati High Court over the course of the last few weeks has brought into sharp focus the utter brutality of the regime governing the Foreigners’ Tribunals in Assam. These verdicts entrench the establishment of an unreasonable burden on people declared as deemed foreigners by seeking from them a standard of proof that is wholly incommensurate with the consequences that befall the ultimate finding — in many cases, consignment to detention camps and a pronouncement of a condition of statelessness. From a reading of the judgments, the standard, as it were, is so disproportionate that it is virtually impossible to glean what a petitioner actually has to do to succeed. Indeed, the chances of success are so negligible that, an analysis of 787 orders and judgments of the High Court between 2010 and 2019, by Leah Verghese and Shruthi Naik of Daksh India, shows us that in 97% of the cases, the petitioner before the court was confirmed as a foreigner.

•This statistic is scarcely surprising given the list of documents deemed inadequate for the purposes of establishing a person’s citizenship. Consider the following: electoral photo identity cards, voters’ lists bearing petitioners’ names, land revenue receipts, certificates issued by the local panchayat, bank passbooks, permanent account number (PAN) cards and ration cards. Each of these has been variously rejected as proof of citizenship. What is more, according to the court, not only must a petitioner adduce documentary evidence, whatever that might actually be, establishing that their parents or ancestors were present on Indian soil prior to March 25, 1971 — a cut-off date distinct to Assam — but they must also independently validate those documents by securing the testimony of their issuing authorities. For example, if a petitioner produces a certificate of her marriage in an attempt to establish her lineage, and should that document be accepted by the Tribunal, the petitioner will still have to lead evidence through the authority that was responsible for dispensing the certificate. Is there, we might want to ask ourselves, a more noxiously labyrinthine exercise than this?

Assam and tribunals

•The Foreigners’ Tribunals (FT), which work as quasi-judicial bodies, were originally created through an executive order made by the Union government in 1964. Their task was to furnish opinions on whether persons referred to them were “foreigners” or not within the meaning ascribed to the term under the Foreigners Act, 1946. This legislation, which was enacted by the colonial government with a view to regulating migration into India, defines a foreigner as any person who is not a citizen of India. It also accords to the government a wide-ranging power to control the entry, exit and movement of foreigners to and within the territory of the country.

•In Assam, the FTs have played a role unique to the State’s history. Typically, the tribunals there have seen two kinds of cases: those concerning persons against whom a reference has been made by the border police and those whose names in the electoral roll has a “D”, or “doubtful”, marked against them. The references made to the FTs in the State have arisen out of a mandate contained in the 1985 Assam Accord. The agreement was a product of a student-driven movement against, among other things, immigration into the State following the declaration of Bangladesh’s independence on March 26, 1971. It made a number of stipulations, including a direction to government to identify and have declared as foreigners any person who entered Assam between January 1, 1966 and March 24, 1971—the names of the persons so identified, the accord says, ought to be deleted from the electoral rolls. What is more, the pact also demanded that the government identify those who came into Assam on or after March 25 of that year and have them deleted and expelled. It was to this end that in 1997 the electoral rolls were revised in the State and more than three lakh individuals were marked as doubtful voters. This revision was made without any prior and independent verification. Out of those left out, nearly two lakh people have already been referred to the FTs.

Burden of proof

•Ordinarily, under the Indian Evidence Act of 1872, the burden of proof in any court of law lies on the person who seeks to make a claim or assert a fact. This would mean that before the FTs, it is the government, which avers that a person is a foreigner, on whom the burden ought to lie. But Section 9 of the Foreigners Act reverses this burden. It places the responsibility on every person referred to an FT by the State to establish before the Tribunal that he or she is, in fact, a citizen of India.

•In 1983, the Union government, sensing the oppressive nature of the burden placed, introduced the Illegal Migrants (Determination by Tribunal) Act. This law, which overrode the Foreigners Act, subtly shifted the onus to prove citizenship from the individual to the government. But, in July 2005, the Supreme Court, in Sarbananda Sonowal vs Union of India , declared the legislation unconstitutional. The Court found, through an almost cavalier consideration of history and facts, that migration into Assam constituted “external aggression” against the State, and, therefore, that the Central government had violated Article 355 of the Constitution. Given this, the burden to establish citizenship, the Court held, ought to always rest on the individual.

•It is this judgment in Sarbananda Sonowal that has since served as the fundamental premise on which the Gauhati High Court has ruled on various petitions made against the verdicts of the FTs. But even assuming the burden ought to lie on the individual to establish her citizenship, these rulings could still benefit, as Madhav Khosla recently pointed out, by the outlining of a sensible test on what degree or level of proof ought to be sufficient to discharge the burden. However, by holding, for example, that persons suspected of being foreigners ought to not only provide documentary evidence but also have those documents attested by the authority that issued them, the Court has foisted on the petitioners a standard that is virtually impossible to meet.

•Perhaps, the solution lies, as Gautam Bhatia has written, in an approach taken by the African Court on Human and Peoples’ Rights. That is that the burden to establish citizenship might well lie on the individual, as the Foreigners Act stipulates, but once he or she has produced a basic set of documents that, on the face of things, make out a plausible claim, the onus ought to then shift to the State to rebut the evidence provided. Ultimately, as the Gauhati High Court has itself held, individuals are not expected to establish “beyond reasonable doubt” that they are citizens of India. What is expected of them is to show on a balance of probabilities that they are not foreigners. In such circumstances, the rational answer would be to allow the onus to shift to the State once the individual has met a basic threshold of proof.

•This approach is, no doubt, far from perfect. In a country like ours, where the weakest and poorest among us are often denied access to basic goods, requiring individuals to produce documents to establish citizenship can by itself represent an onerous demand. We often see rights as universal, but as political philosopher Hannah Arendt pointed out in The Origins of Totalitarianism, to truly possess rights, individuals often need to belong to a political community. In other words, “the right to have rights” is seen as contingent on citizenship. In instilling a regime where a presumption against citizenship operates, the Foreigners Act denies to the weakest among us this right to have rights. It treats them as less equal beings. To reverse this damage, we must do as Seyla Benhabib has suggested. We must recognise a universal status of personhood of every human being independent of their nationality.

📰 The public unravelling of Yes Bank

The manner of its collapse raises questions on the central bank’s role and the late action by the Enforcement Directorate

•On Sunday, the Enforcement Directorate (ED) arrested Yes Bank’s swashbuckling co-promoter Rana Kapoor, accusing him and his family of using shell companies to receive kickbacks from the bank’s corporate borrowers.

•On March 5, the Reserve Bank of India (RBI) had used its powers to supersede the bank’s board and impose restrictions on its operations. The bank’s depositors cannot withdraw more than Rs. 50,000 for the next four weeks at least. Predictably, the State Bank of India (SBI) has emerged as Yes Bank’s knight in shining armour. Surprisingly, though, it is crowd-sourcing the rescue plan.

Balance sheet scam

•The manner in which the Yes Bank collapse has unravelled raises several questions. The full extent of its troubles spilled into the public domain two years ago, when, in September 2018, the RBI had declined to extend Mr. Kapoor’s term as managing director and chief executive officer by three years. It directed the bank to end his tenure by January 31, 2019.

•The scam on the bank’s balance sheets must have been visible to the RBI as far back as in 2015. The RBI’s asset quality review (AQR) had forced Yes Bank, as it had several other banks, to report transparently their previously unstated non-performing assets (NPAs).

•Before the AQR in 2015, bankers avoided recognising bad loans on their books. They did this by restructuring the loans susceptible to defaults or by extending new loans, called evergreening, to keep the stressed borrowers afloat. Thus, while the borrowers were able to avoid defaults on repayments, the lenders managed to show low NPAs.

•The RBI found that for the year ended March 2016, Yes Bank had classified loans worth Rs. 749 crore as gross NPAs, understating the figure by a whopping Rs. 4,176.70 crore. It directed Yes Bank to reclassify more loans as NPAs. Disclosing this to the stock exchanges in May 2017, Yes Bank assured investors that the higher NPAs would not have further ramifications as it had already taken remedial action.

•However, just five months later, in October 2017, the bank disclosed, once again, that the RBI had discovered more underreported gross NPAs on its books. For the year ended March 2017, the under reporting was of the tune of Rs. 6,355 crore.

•Why has the ED then swung into action so late, giving Mr. Kapoor 18 months to cover his tracks and potentially remove all the money he can from the bank in this period? If the RBI’s inspections of the bank’s books left it with no confidence in Mr. Kapoor, surely then that ought to have been a smoking gun to suspect if not investigate his role in Yes Bank’s serial under-reporting of NPAs. Also, Yes Bank was looking for investors for the last few months. The moratorium and the investigation against Mr. Kapoor seem to have been triggered by the failure to find investors. This suggests that had investors been found, Mr. Kapoor may have escaped action. After all the RBI’s discomfort with him was known even back in 2018. Why didn’t the ED take action at that time?

•In December 2018, barely two months after Mr. Kapoor’s extension was rejected, former RBI Governor Urjit Patel resigned from the central bank. Did the RBI and other authorities go soft on Yes Bank after that? Its transgressions continued even after the RBI fined the bank and forced changes in its management. For the year ended March 2019, the RBI discovered underreported NPAs worth Rs. 2,299 crore. Incidentally, around the time the moratorium was announced last Thursday, news broke of another resignation at the RBI. This time of its well-regarded Deputy Governor N.S. Vishwanathan, a specialist in regulation, supervision of banks and non-banking finance companies. The exit follows a four-decade career at the RBI and just three months ahead of his retirement in June. Was it prompted by the health issues cited or a protest against the RBI’s stance on policy matters such as handling of Yes Bank?

Shareholders’ role

•And what of the bank’s shareholders? Why did they ratify remuneration hikes and a renewal of tenure for Mr. Kapoor despite public information of the serial underreporting of NPAs? The regulators must ensure now that all current equity held by Yes Bank holders should get wiped out since it represents a pure risk capital. If this is not done, any investment by Yes Bank’s saviour, the SBI, will be a subsidy to them. Let us not forget that barely two years ago, the SBI and its associate banks received Rs. 8,800 crore in recapitalisation from the Central government. Other public banks received more.

•How credible can the rescue be when barely three months ago the SBI had disclosed that the RBI has discovered under-reported NPAs — of Rs. 11,932 crore for the year ended March 2019 — on its books?

•Most importantly, why are public comments being sought on the restructuring scheme for Yes Bank? This is unfair to the SBI. The restructuring scheme is no one’s business other than the SBI’s. After this precedent, next time a bank, say a Kotak Mahindra Bank or HDFC Bank, is to get an investment from a new investor, will that scheme also be put up for public comments?

•If this were a commercial decision taken by the SBI, and not capitulation before the government of the day, it would have put greater financial might and a well-crafted plan behind the rescue.

•Finally, what other options were considered by the RBI? Did they include a market-based solution? DBS Bank has just turned into a wholly-owned subsidiary of its Singaporean parent. Could Yes Bank’s network of branches been of interest to it? Ideally, the moratorium ought to have been announced, together with the scheme for restructuring, over a weekend. That would have made it less disruptive, the limit of Rs. 50,000 on withdrawals by depositors would not have been needed, and the RBI’s credibility would not have suffered as much.

📰 A progressive system of taxation

Why reverting to the classical system of taxing dividendis a good move

•As a concept, ‘dividend’ has been in existence since the inception of the Income Tax Act. Any shareholder in a company is entitled to dividend as a return on investment. Dividend covers various elements of payouts from a company and seeks to tax those at some stage. The question is: at what point should the dividend be taxed and how? The matter assumes significance since corporates pay tax on their profits and any tax on the distribution of post-tax profits amounts to double taxation. The Finance Bill, 2020 has reverted to the classical system of taxing dividends (in the hands of the shareholders). The Bill seeks to withdraw the dividend distribution tax (DDT) payable by the company. This move has created ripples since high-net-worth individuals never expected a full tax in their hands, which is being sought to be achieved by the proposal.

Three methods of taxing dividend

•The three methods of taxing dividend are the classical system; the simplistic system or DDT regime; and the imputation system. The classical system was in vogue till 1997-98. According to this system, the dividend was taxable in the hands of the shareholder, subject to the then available deduction under Section 80L for a maximum of Rs. 12,000. This was a progressive system.

•The Finance Act of 1997 analysed the merits and demerits of the classical system and embarked on the route of the simplistic system of taxing dividend in the hands of the distributing company. In the process, millions of shareholders were spared the burden of offering dividends as tax in their hands. The DDT system replaced the classical system from 1997-98. The rate of DDT started at about 10% and climbed to 20.56%. The advantage of DDT was that tracking of dividend in the hands of the company became easier and collecting the tax on dividend was a painless process. The main drawback was that the treaty agreements with countries like the U.S. did not permit the set-off of the DDT paid against the tax liability of the shareholder. DDT was simple but inequitable since it made no distinction between a low taxpayer and a high taxpayer.

•With India registering substantial growth between 1997 and 2020, corporate performances also registered progress and dividend pay-outs increased. The income tax payer came under the radar of the IT department. This development made tracking of the shareholder much easier. The withdrawal of DDT came as a relief to the corporate sector which has wanted DDT to be removed and the effective corporate tax rate in India to be reduced. Corporates are also required to conserve cash for further growth. This largely prompted the government to revert to the classical system for taxing dividend.

Maximum tax rate

•However, this means that the starting rate of tax works out to 10% and the highest rate works out to, say, 43%. Tax paid in dividend is out of money earned and received and more often than not represents holding of shares passed on by generations without any cost incurred. On this score, discharging tax at the maximum marginal rate more than justifies the principle of equity and sharing with the government in the overall developmental agenda. Shareholders in other countries with a protective treaty regime can receive dividend attracting tax rates as low as 5%. The distortion in the current regime viz. the foreign shareholder being taxed at a much lower rate than the Indian counterpart is obvious. This would require some correction. The main contention of the high-net-worth individual is that while the classical system is acceptable as a concept, the maximum tax rate is an unexpected extra burden.

•Some countries follow the imputation system. The dividend is taxed in the hands of the shareholders but they are also allowed a set-off of a portion of the corporate tax discharged by the company. In many ways, the imputation credit resembles an underlying tax credit granted to non-residents under certain treaties entered into by India. While there are complexities in that system, it mitigates the hardships caused by the double taxation impact of dividend distribution.

•Indian promoter groups control a majority of shareholding in Indian companies. For them, the wealth is largely represented by the value of shares and the dividends received over a period of time. These have been passed on to successive generations. These shares can be held by individuals, HUFs, family companies, or family trusts. Any decision to declare dividend is analysed from the standpoint of the company and the standpoint of the entity receiving the dividends. As long as dividends were received tax-free, the structure was irrelevant. But with the current proposal even family trusts can be taxed at the maximum rate. This blow is bound to force companies to revisit their strategy of paying dividends.

📰 India needs all hands on deck

It is puzzling why the country relies solely on the National Institute of Virology for genome sequencing

•On February 6, the World Health Organization (WHO) recognised the Pune-based National Institute of Virology (NIV) as one of the 15 laboratories that would provide reference testing support for the novel coronavirus.

•The number of COVID-19 cases remained constant at three for nearly a month in India, but now it is going up steadily. Anticipating such a scenario, more labs are screening COVID-19 samples now. Besides the 52 labs belonging to the Viral Research and Diagnostic Laboratories network of the Indian Council of Medical Research (ICMR), 10 labs under the National Centre for Disease Control (NCDC) have been included for testing COVID-19 samples.

•Till recently, all the 52 labs were allowed to only screen samples; only NIV was authorised to confirm positive cases. With more suspected cases piling up, a long delay in confirming positive test results would have become inevitable for NIV. So, in a welcome move, ICMR has pre-empted such a scenario. “Four-five days ago, 13 labs were authorised to confirm positive cases without sending them to NIV. Another 17 labs will be authorised to do so on March 11 and the remaining labs on March 13,” says Nivedita Gupta of ICMR. With the 10 labs under the NCDC regularly confirming positive H1N1 cases, we can expect these labs to be authorised to also confirm positive COVID-19 cases.

•Unfortunately, several national labs have not been brought up to speed to perform other vital functions during an outbreak.

Sequencing the genome

•NIV is the only lab in India which has a bio-safety level-4 (BSL-4) facility to culture pathogenic, novel viruses, study the origin of such viruses and provide a comprehensive characterisation of them by sequencing the entire viral genome. NIV has sequenced the SARS-CoV-2 genome collected from two patients in Kerala.

•When the entire genome is sequenced it helps researchers understand the arrangement of the four chemical entities or bases that make up the DNA or RNA. The differences in the arrangement of the bases make organisms different from one another. Sequencing the genome of SARS-CoV-2 will help us understand where the virus came from and how it spread.

•In the last decade or so, many national laboratories have developed the expertise to sequence the entire genome of viruses and bacteria using the latest equipment (next-generation sequencing, or NGS). About a dozen labs have a BSL-3 facility to inactivate the virus and sequence the genome using advanced equipment. They also have the expertise to undertake such work.

•It is therefore puzzling why India relies solely on NIV for undertaking genome sequencing. If there’s a compelling need to have all hands on deck to sequence the genome, it is now.

•While NIV sequenced two of the three COVID-19 samples collected from Kerala in late January-early February, it is not clear if more samples have been sequenced. Contrast this with how other countries have responded. Many of the 263 sequences shared with the Global Initiative on Sharing All Influenza Data (GISAID), a public platform started by the WHO in 2008 for countries to share genome sequences, are by universities and hospitals. In mainland China, many of the sequences are shared by the Chinese Center for Disease Control and Prevention, which is present in all the 31 provinces. At 90, China has posted the most sequence data on GISAID. This is followed by the U.S. (37).

Unutilised expertise in India

•“We tested around 75,000 samples of H1N1 during the 2009-2010 outbreak. We have a BSL-3 facility and the latest sequencing equipment. We are ready to help out if ICMR reaches out to us,” says Professor V. Ravi, Head of the Department of Virology at the National Institute of Mental Health and Neurosciences (NIMHANS), Bengaluru, about sequencing.

•“It is time for team building, not the time to work in silos,” says Dr. Chitra Pattabiraman from NIMHANS. “If we are not given an opportunity to develop these skill sets and not encouraged to participate, then how are we ever going to get good at it?”

•During the 2018 Nipah virus outbreak in Kerala, a lab outside NIV, the Manipal Centre for Virus Research, successfully proved that given an opportunity it could not only diagnose the novel virus but also partially sequence it. The Manipal Centre confirmed the Nipah virus in 17 of the 24 samples it received from Kerala. Unfortunately, since April 2019, the Manipal Centre has been directed to restrict itself to processing the samples of pathogens specific to the BSL-2 facility. It is not even one of the designated labs to test for the novel coronavirus.

•Virologist Professor Gagandeep Kang, executive director of the Translational Health Science and Technology Institute, however feels that given that the number of COVID-19 cases in India is still under 60, NIV does not feel overwhelmed.

•While agreeing that many labs/ institutions in India have the ability to sequence the viral genome, Professor Kang emphasises that sequencing is useful to know where the virus strain came from and to check if the strain is evolving, but does not inform us of the immediate strategy to control the outbreak or its spread.

•With the latest sequencing equipment widely available in many research labs and the cost of sequencing falling, researchers are using genome sequences for genomic epidemiology. This becomes possible as scientists already know the number of mutations that arise on an average in a month in the case of COVID-19, its incubation period, and the average time between cases in a chain transmission (serial interval). Using this data, it has become possible to identify the index case even when the source of infection is not known, and find the link between two seemingly unconnected outbreaks.

How China built capacity

•China was completely unprepared when the Severe Acute Respiratory Syndrome (SARS) struck in 2002-2003. The outbreak infected over 8,000 people globally and killed nearly 800. The bird flu (H5N1) outbreak that followed in 2003 underscored the need for influenza detection and response in China. This led to a collaboration between the Chinese National Influenza Center and the Atlanta-based Centers for Disease Control and Prevention in 2004 to build capacity in influenza surveillance in China.

•For the next 10 years the collaboration worked in many ways: it led to developed human technical expertise in virology and epidemiology, a comprehensive influenza surveillance system, strengthened analysis, the dissemination of surveillance data, and improved early response to influenza viruses with pandemic potential. By 2014, the national influenza surveillance and response system included 408 labs and 554 sentinel hospitals.

•Today, there is a Centre for Disease Control and Prevention in each of the 31 provinces in mainland China. The infrastructure and capacity-building that was put in place by China for influenza surveillance stood in good stead when the H1N1 pandemic struck in 2009.

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