Why China risks heading into a winter of discontent
Food chain problems, power shortages and ‘pandemic fatigue’ stalk the world’s second-largest economy
China risks stumbling into a winter of discontent amid food shortages, power blackouts and “pandemic fatigue.”
Earlier this week, the Ministry of Commerce ordered provincial governments to guarantee “the supplies” of household staples such as “vegetables” and to “stabilize” spiraling prices.
Torrential rain during the summer and autumn caused massive flooding across China, wiping out or severely damaging crops.
“Local authorities [must] take measures to ensure the supply and stabilize the prices of vegetables during the coming winter and spring seasons,” the Ministry of Commerce said in a statement.
“Commerce departments [need] to better coordinate with competent authorities to improve the interprovincial and local supply chains of vegetables, and set up daily price tracking mechanisms,” the Ministry stated.
Yet the challenge facing China’s food chain is just one of the problems Beijing will need to tackle as the temperatures start to drop in the heartland of the nation.
China is not the only country suffering from surging prices and a consumer backlash. Tangled global supply chains and a surge in energy costs are pushing up inflation across the world. But China is particularly vulnerable when it comes to food security.
The issue is so sensitive that a new law is being drafted by the powerful State Council as part of the ruling Communist Party’s 14th Five-Year Plan that covers 2021 to 2025. Targeted sectors will include the seed industry.
What was said: “Every year, around 14% of global grain output is lost between the time it is produced until the time it is sold. If this loss was reduced by just one percentage point … it would save enough grain for 70 million people a year,” an official from the Central Commission for Rural Affairs said in an interview with the state-run Xinhua News Agency.
Big Picture: Extreme weather threatens to become part of everyday life in China after floods in the summer and autumn. A report released by Greenpeace in July revealed that rural regions will not be the only areas affected by Climate Change. “Extreme heat and rainfall” pose risks to major cities such as Beijing, Shanghai, and the high-tech hub of Shenzhen.
President Xi Jinping’s administration has been working to fix an energy shortage that has sparked power cuts across the country and stymied economic growth.
Rising coal and natural gas prices along with a crackdown on fossil fuel emissions have created the perfect storm for Beijing. At the same time, the “shortages” could undermine “social stability” amid “residential blackouts” and higher consumer costs.
What was said: “Governments of various levels should [consider] the practical needs of enterprises, businesses, and residents. They should not only care about carbon emission reduction … If the economy collapses under that pressure, there will be no development, green or otherwise,” state-controlled China Daily warned in an editorial on September 20.
Big picture: Goldman Sachs has estimated that 44% of China’s industrial activity has been hit by the electricity squeeze. That could wipe out one percentage point of annualized GDP growth in the third quarter. As for the final three months of the year, it could be as high as a two-percentage-point decline, the investment bank stated.
China continues to enforce a zero-tolerance Covid-19 policy even though media reports suggest that “pandemic fatigue” has set in. A small outbreak can result in localized lockdowns, border closures and the mass testing of millions of people, casting doubt on the effectiveness of China’s home-grown vaccines.
Yet Beijing will point to the official infection figures, which are incredibly low for a country that has a population of nearly 1.4 billion. There have been just 109,738 cases and 4,848 deaths since the outbreak first surfaced in the Chinese city of Wuhan nearly two years ago. A far cry from the virus numbers in the United States and Europe.
What was said: “People are starting to wane [after being] dragged into this pandemic for nearly two years … everywhere we observe pandemic fatigue. That [will] surely affect Chinese people,” Chunhuei Chi, the director of Oregon State University’s Center for Global Health, said as reported by The Guardian media group in London at the weekend.
Big Picture: “China’s CoronaVac and Sinopharm vaccines account for almost half of the 7.3 billion Covid-19 vaccine doses delivered globally. But as the doses mount, so has the data, with studies suggesting that the immunity from two of either vaccine wanes rapidly, and the protection offered to older people is limited,” Nature, the weekly scientific journal, reported last month.