China’s Covid mess threatens the global economy
Mass lockdowns in the world’s second-largest economy could have a profound impact across the world
Never-ending Covid-19 lockdowns, a stalling economy and surging unemployment have created shockwaves across China.
In short, the country is in a mess.
Dwindling trade numbers have only exacerbated the problem after China’s export sector was left “battered by lockdowns and global inflation.”
With Shanghai and Beijing grinding to a halt, the affluent middle class is also experiencing “disillusionment.”
Instead of a wide-ranging strategy centered on booster vaccinations, a massive testing program and a draconian surveillance system have been put in place.
Again, this is all part of the “zero-Covid policy” rolled out by the ruling Communist Party of China under President Xi Jinping’s personal direction.
“It came as a big shock. For them [the middle class] the unimaginable happened [in Shanghai],” Professor Minxin Pei, of the Claremont McKenna College who grew up in Shanghai, said as quoted by The New York Times.
“Freedom is a strange thing. You don’t usually realize how precious it is until you have lost it,” he pointed out.
Crackdown with Chinese characteristics:
- Xi has expanded state surveillance in China’s two most important cities under the guise of his “zero-Covid policy.”
- In Shanghai, the city’s entire subway network has been closed to combat the Omicron outbreak.
- The fallout from lockdowns across the country since March has left China’s economy reeling.
- Japan’s investment bank Nomura has estimated that more than 373 million people in 45 Chinese cities were living under some form of lockdown last month.
- Already, Premier Li Keqiang has warned that the employment situation is “complex and grave.”
- Unemployment among people aged 16 to 25 has surged to 16%.
We don’t think that it is sustainable considering the behavior of the virus.
WHO Director-General Tedros Adhanom Ghebreyesus
What rules? “The destruction of the rule of law is a far worse social pandemic than a biological pandemic,” Zhao Hong, a law professor in Beijing, wrote as reported by The New York Times.
Delve deeper: President Xi has refused to budge on his infamous “zero-Covid policy.” His resistance to opening up China and increasing vaccination rates among the elderly was again highlighted last week.
Battle stations: “Our prevention and control policies can withstand the test of history. Our measures are scientific and effective. We have won the battle to defend Wuhan. We can also win the battle to defend Shanghai,” Xi said.
Alternative view: The World Health Organization is convinced that China’s zero-tolerance game plan is doomed to fail.
Forget it: “We don’t think that it is sustainable considering the behavior of the virus and what we now anticipate in the future,” WHO Director-General Tedros Adhanom Ghebreyesus told the media earlier this week in a rare briefing about Beijing’s handling of the pandemic.
Beijing broadside: In response, China’s Foreign Ministry spokesman Zhao Lijian called Tedros’ remarks “irresponsible” at a media conference on Wednesday.
China Factor comment: The spillover effect from the lockdowns in the world’s second-largest economy could have a profound impact across the globe. As Barron’s reported: “The dire state of China’s economy doesn’t bode well for the rest of the world.”