China’s zero COVID policy causes economic crisis

IIn mid-May, I traveled from London to Slovenia to interview the Ukrainian men’s football team in their bid to reach the Qatar World Cup in November. It was a four-day mission, requiring travel via train stations, airports and taxi ranks – but at no time was I asked to show a negative COVID-19 test, my vaccination status, or even to wear a face mask. I barely remember seeing anyone wearing one, let alone the elite athletes I rubbed shoulders with on a daily basis. It was equally refreshing and disconcerting, as if Europe had forgotten that the pandemic had ever happened and was still happening.

It was on this trip that a news alert flashed on my phone: China on May 14 announced that it was withdraws from hosting the Asian Football Confederation Cup– the continent’s first international football tournament – due to an outbreak of COVID-19 which, on the same day, was only responsible for 65,000 cases and 45 deaths nationwide. That China is still committed to a strict zero-COVID policy focused on eradicating every infection, rather than mitigating serious illness and death, was no secret after the severe lockdown suffered by 26 million people in Shanghai, its largest city, in the past two months. Still, that was surprising because Beijing not so long ago hosted the 2022 Winter Olympics without sowing a major outbreak and Chinese leaders relish the prestige that comes with such major sporting events. But what caught my attention the most was the timing: the canceled tournament only started in June 2023.

What this suggests is that China has no intention of following the West in a vaccine-fueled “living with the virus” dynamic. This is bad news for the Chinese economy and for any global hope of avoiding a global recession. Over the past two decades, China has contributed a quarter of the rise in global GDP – at that time, the first quarter of 2020 was the only one where its economy did not grow. Now, however, more than 200 million Chinese are living under pandemic restrictions, hitting an already slowing economy. Retail sales in April fell 11% year-on-year, while home sales, which account for more than a fifth of GDP, fell 47% over the same period. Unemployment in a sample of 31 major Chinese cities is now the The highest according to official data since the start of recordings in 2018. Scenes from the beginning of May of struggling workers with public health officials at a factory producing Apple MacBooks in Shanghai after being denied permission to leave their workplaces to rest in on-site dormitories highlights the growing friction between economic priorities and public health.

“Ordinary Chinese have felt the Party’s brutal authoritarianism in a much more direct and personal way than many people, especially young people, have before,” says Astrid Nordin, Chair Lau of China International Relations at the Kings College London.

Read more: China, isolated from the world, is now the last major country to pursue a “zero COVID” strategy

Since China began market reforms in the late 1970s, its ruling Chinese Communist Party (CCP) has rooted its legitimacy in improving livelihoods. But over the past two years, President Xi Jinping has seized on China’s success in conquering the virus as proof of his political system’s superiority over the West. These two successes are now in direct conflict. On May 25, Chinese Premier Li Keqiang held an emergency meeting with more than 100,000 party members where he warned that China’s current economic difficulties were in some ways greater than the initial impact of the pandemic in 2020 and indicated that the annual growth target of 5.5% was impossible to achieve. .

“The economic crisis due to the draconian measures to control the epidemic really shows the disorder, the poor coordination and the miscalculations of the leaders at the top,” says Valerie Tan, China elite politics analyst for the Mercator Institute. Chinese studies in Berlin. “We are finally witnessing the full manifestation of this ideological turn of Xi Jinping.”

Yet no one expects Beijing to abandon its zero COVID policy any time soon. It’s particularly sensitive for Xi ahead of the 20th CPC Congress in the fall, when the strongman is set to take on a third five-year presidential term, tearing up the long-held convention that leaders only serve two . The prospect of COVID-19 running amok as it passes this historic milestone will not be tolerated. On May 5, the Standing Committee of the CPC Politburo, China’s top political body, said zero-COVID was “determined by the nature and purpose of the Party”, thus linking it expressly to the legitimacy of the CCP, while declaring that the relaxation of controls would lead to “massive numbers of infections, critical cases and of deceased”.

Despite the ideological nature of China’s zero-COVID obsession, this grim prognosis is not hyperbole. According to a study published on May 10 by researchers from Fudan University in Shanghai, Indiana University and the US National Institutes of Health, the easing of COVID-19 restrictions in China could result in 112 million cases and 1.5 million deaths in just three months. This is primarily because China has not fully vaccinated 100 million of its 264 million citizens over the age of 60, or 38%. In semi-autonomous Hong Kong, a surge of the highly transmissible variant of Omicron has resulted in some of the world’s worst daily death rates in recent months, with 95% of those deaths among those over 60 who had not been fully vaccinated.

Read more: How Hong Kong Became China’s Biggest COVID-19 Problem

In this regard, China is a victim both of its success in stemming the spread of less transmissible variants and of its retrospective propaganda. Elderly people unwilling to travel abroad saw no need to be vaccinated against a virus the state had triumphantly declared defeated. Meanwhile, due to a pernicious mix of national security and national pride, China has not approved any foreign vaccines, meaning it does not have access to the most effective types, which are those based on mRNA technology. Local alternatives have uneven efficiency.

It’s not that it really matters in a place where zero-COVID is the absolute law of the land. Even the best COVID-19 vaccines don’t eliminate transmission, but they do slow the spread and significantly reduce the severity of symptoms. However, this makes them incompatible with any zero-COVID strategy, which does not distinguish between mild or severe cases, or those in young and old people. The policy targets infections, periods, not illness or death. “That’s why it’s so political,” says Dr. Yanzhong Huang, senior global health fellow at the New York-based Council on Foreign Relations. “Unless they let go of their zero-COVID mindset, there’s really no way out.” No wonder even the WHO says that zero-COVID is not sustainable.

The Chinese public is aware of this fact, and complaints about the government’s handling of the pandemic have become commonplace, even on the country’s heavily censored social media. This led to a new official edict: jingmo, or silence. Stop growling, in other words. During this meeting of the Politburo standing committee on May 5, Xi sworn to suppress “all words and deeds that distort, doubt and deny our epidemic prevention policies”. Worryingly, the head of China’s National Health Commission, Ma Xiaowei, wrote in the CCP’s Ideological Journal Qiushi on May 16, that more “permanent” quarantine hospitals are to be built and that weekly testing is “normalized”.

Not hosting the AFC Cup won’t do much damage to China’s global reputation. But the gradual lockdowns, which are bringing Chinese factories to a standstill, with damaging effects cascading down global supply chains, will make trading partners look elsewhere. In Shanghai, China’s largest port responsible for a fifth of the country’s international shipments, the average dwell time for import containers was 12.9 days on May 12, down from 7.4 days on six weeks earlier, according to shipment tracking. Project 44. More than half of American companies in China have delayed or reduced their investments in China due to containment measures, according to a recent survey by the local American Chamber of Commerce.

Thanks to the current measures, “China could be seen as a less reliable trading partner than before,” says Nordin, of Kings College. “The question is how much less reliable than other possible alternatives?”

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