China’s sudden U-turn on its strict “zero-Covid” policy has led to concern that surging coronavirus cases could cause more than a million deaths next year as well as widespread disruption to global supply chains just as the world faces an economic downturn.
Following unprecedented protests at the country’s draconian Covid restrictions, Beijing made a surprise announcement earlier this month that it would “optimise” its policies by allowing mild cases to quarantine at home, as well as limiting lockdowns, scrapping mass testing and lifting curbs on domestic travel.
“China’s scrapping of its Zero Covid policy is viewed by some as a pragmatic step aimed at reviving economic growth” said Forbes, “but, in the short term it may backfire by exacerbating already existing supply chain and labour shortage issues”. As the world’s largest producer and exporter of consumer goods, “disruptions across the Chinese manufacturing sector are likely to impact the global supply chain of goods and the world’s economy as a whole”.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
With three Covid waves predicted to rip through China between now and the spring, the impact of the virus on the number of fatalities, business and international travel is undoubtedly going to be severe even if, as many hope, it is relatively short-lived as the country finally opens up after more than three years.
What did the papers say?
“Despite rampant illness – nearly everyone here has a cough or fever – the sense of relief is palpable,” reported The Telegraph. There is a growing acceptance that China needs to learn to live with the virus as people in Europe did last year.
“But the sudden removal of all containment measures has made some experts jittery,” said the paper. “Large numbers of people are now sick and hospitals have been overwhelmed with an influx of new patients, with the capital, Beijing, at the centre of the latest wave.”
Having adopted a policy of containment ever since Covid-19 first emerged exactly three years ago, “many of China’s 1.4 billion people remain vulnerable to the virus because of limited exposure, low vaccination rates and poor investment in emergency care”, said The Washington Post.
According to new projections from the US-based Institute of Health Metrics and Evaluation (IHME) reported by Reuters, China could experience over a million Covid-related deaths next year. Official pandemic fatalities currently stand at around 6,000.
“It’s becoming increasingly hard to get a handle on the scale of China’s Covid-19 onslaught,” said Bloomberg. For now “the severity of China’s coronavirus surge is being reported largely anecdotally, with stories of deserted streets, strained hospitals and funeral homes, and pharmacies being emptied of fever medication and traditional remedies”, added The Washington Post.
Ominously, Radio Free Asia has reported that funeral homes in and around Beijing are operating around the clock amid the spike in cases, with cremations now backed up for at least five days.
What next?
China is forecast to face three waves of Covid between now and mid-March, according to CGTN.
Many office workers have begun to work from home causing “widespread business disruption as staffing shortages threaten to close down factory production lines and truck drivers fall ill, bringing chaos to supply chains”, said the Financial Times.
In a worrying sign that the surge in cases is already having an impact, China’s business confidence fell to its lowest since January 2013, a survey by World Economics showed on Monday, according to Reuters.
However, “there is some evidence that the disruption will be shortlived”, reported the FT, with Apple contract manufacturer Foxconn’s Zhengzhou facility, the world’s largest iPhone factory, among those shedding its strict restrictions.
Factories could face worker shortages until February after the lunar new year, claimed the paper. “However, investors are hoping that the period of short-term disruption will accelerate China’s opening up, after three years of being isolated from the rest of the world.”
Chen Long, a partner at the Beijing-based research provider Plenum, said: “Investors will look through this period of short-term mess. The crucial question is how quickly things will normalise after this wave, and it looks like it could be much faster than expected.”
While there are also early signs of a rebound in domestic travel, continued public nervousness over long-haul flights “could pose a challenge to the international tourism market’s nascent recovery from the pandemic, which has been held back by China’s ongoing border closures”, said Al Jazeera.
In a survey of 4,000 Chinese consumers carried out by consultancy Oliver Wyman in late October, more than half of respondents said they planned to put off travel abroad, even if the borders reopened tomorrow.
In 2018 China’s population spent $288bn on international travel, nearly one-quarter of the global spending on tourism.
The other “big unknown”, said Forbes, “is how, from a public health perspective, the situation in China affects the pandemic outside of China”, increasing the likelihood of new mutations or variants, “all with potentially greater immune-escape properties and a higher reproduction number”.
When asked last week how the rise in cases may impact global inflation levels, US Federal Reserve chairman Jerome Powell said it could cut both ways. If China’s economy slows down, that could actually lower oil and gasoline prices around the world, he argued. But if the outbreak causes new tangles in supply chain, that could make inflation worse.
“It’s really a no-win situation,” said NPR’s chief economics correspondent Scott Horsley. “US companies were already feeling the effects of China’s strict Covid prevention policies. Now they could feel the fallout from relaxing those policies. Of course, a lot will depend on the severity of the outbreak and how long it lasts.”
