May 17, 2022


Skillful Business Crafters

China’s zero-Covid policy under strain as new cases spread

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China’s efforts to eliminate Covid-19 are coming under increasing pressure, with officials warning of a “grave challenge” in the months ahead and dozens of new cases reported over the weekend.

China’s National Health Commission on Sunday confirmed 74 new infections for the previous day, of which 50 were locally transmitted. The current wave of cases has reached the majority of the country’s 31 provinces, in the broadest outbreak since the early days of the Covid-19 pandemic last year.

The figures were released a day after officials at a press conference in Beijing said China would continue to adhere to its strict prevention measures even as other countries in the region abandoned their zero-Covid policies.

Wu Liangyou, an official at the National Health Commission, said China faced a “complex and grave challenge this winter and next spring” in controlling the virus, because the pandemic remained at elevated levels in neighbouring countries and across the world.

In China, which is hosting the Winter Olympics for the first time in February next year, new cases slowed to a trickle in mid-2020 and authorities have since then reacted swiftly to any prospect of a big outbreak.

Despite being the epicentre of the pandemic, China’s strict lockdowns and tough border controls have helped keep a tight lid on the virus.

Fewer than 5,000 people have died from the virus, according to official Chinese figures, while more than 2.3bn vaccine doses have been administered — by far the highest in the world — according to the FT’s Covid-19 vaccine tracker.

The emergence of the highly infectious Delta variant within the country, which hit the eastern city of Nanjing in July, led to stringent measures designed to limit its spread, including travel restrictions.

There are signs of increasingly harsh constraints in the country, which has reported almost 1,000 new cases since mid-October. Last weekend, tens of thousands of visitors were locked inside Disneyland in Shanghai for mass testing after a case related to the theme park was discovered a day earlier. The government has also warned households to store food in case of emergencies.

China’s efforts to control the pandemic have contributed to a broader economic slowdown, with economists in recent months pointing to the impact of the restrictions on consumer spending, alongside weakness in the property sector and energy shortages.

Virus outbreaks have also sent ripples through the global economy. In August, a terminal at the Ningbo-Zhoushan port was forced to close for two weeks after an employee tested positive for the virus. The shutdown at one of the world’s busiest ports heaped further pressure on already-stretched international shipping routes.

While Chinese gross domestic product in the third quarter fell to its slowest pace of growth in a year, at 4.9 per cent, data on Sunday showed resilience in exports, which also helped drive its rapid recovery from the early stages of the pandemic last year. In dollar terms, exports beat expectations to rise 27 per cent in October year on year.

“China’s economy shows [a] similar pattern in October as in earlier months: exports remained strong due to recovering global demand, while domestic activities likely stayed subdued partly driven by the regional Covid outbreaks,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.