Nearly three years into the epidemic, China is keeping to a tight COVID-19 containment plan, potentially upsetting investors expecting a rapid reopening, though authorities are continuing to make incremental adjustments to managing the virus.
Before the start of the yearly session of parliament in March, at the earliest, many analysts and experts claim China is unlikely to start significantly reducing its outlier zero-COVID stance, which is squeezing the economy and causing widespread unhappiness.
Authorities are implementing improvements, including tighter targeting of lockdowns, the introduction of new vaccines, and the addition of overseas flights. However, they haven’t taken any action that would allow for a large loosening of limitations, such as launching a massive new vaccination campaign or educating the public about the possibility of an outbreak of illnesses.
The highest weekly rise in more than two years was seen in Chinese stocks last week, which rose 5.3% as investors poured a trillion us dollars into the markets in anticipation of a recovery in the second-largest economy in the world.
However, Chinese health officials reaffirmed their dedication to a dynamic-clearing strategy on Saturday, which one called absolutely accurate as well as the most practical and cost-efficient.
Daily infections are reaching six-month highs despite being extremely low compared to other countries, and officials continue to reinforce the zero-COVID policy, which President Xi Jinping claims saves lives. Since May 26, China has not recorded a COVID death.
Managing the potential effects of the widespread transmission of coronavirus, including even milder varieties, among its 1.4 billion inhabitants—including hundreds of millions of old people with low natural immunity—remains China’s major issue.
Even in 2023, according to Capital Economics’ senior China economist Julian Evans-Pritchard, a change from zero COVID is improbable due to, among other things, relatively low elderly vaccination rates.
He pointed to Hong Kong’s exceptionally high COVID death rates in a note he sent out on Friday, saying that experience there illustrates the danger of reopening too soon.
A comparable conclusion on the Chinese mainland would be detrimental to Xi Jinping personally because, according to him, China has a considerably lower death rate than the world as a whole.
The fact that there has been no formal response to this vulnerability shows that changing direction is not urgent.
Local authorities, seeking to avoid complete lockdowns such as the one that immobilized Shanghai, China’s financial centre and most populated city, for two months this year, are a focus of the COVID battle’s developing local front.
People in several places, including Beijing, are frequently tested, and they run the possibility of being labelled as “contacts” of a case or getting their smartphone health app to become “abnormal,” which would force them to stay at home.
Lockdowns at specific locations are frequent, and domestic traffic is drastically decreased from a year before.
Health officials criticised certain localities on Saturday for their “one-size-fits-all” lockdowns and promised to make improvements.
Yanzhong Huang, a global health expert at the Council on Foreign Relations, stated on Friday that there appears to be a growing trend at the community scale to stress a more focused approach to implementing zero COVID.
Huang does not anticipate a significant shift in China’s COVID strategy any time soon, though. This shift in policy won’t occur quickly. And if it does, he added from New York, it will be gradual.
Citing sources with knowledge of the situation, Bloomberg News reported that China was looking into getting rid of a structure that penalises airline companies for attempting to bring in COVID-positive passengers. The report said the effort was evidence that the government was trying to lessen the impact of its COVID policies.
Neither action would alter the course of events.
Huang stated at the Council on Foreign Relations that the government continues to believe they are doing an excellent job of combining COVID control with economic development.