“Three years on, the novel coronavirus is no longer novel.”
I came across this screenshot of a blogger's comment on my WeChat Moments on 30 August. It was meant to be a pun on the name of Covid-19, but instead of lightening the mood, it made people feel helpless and at a loss for words.
Lockdowns in megacities
China is still working hard at epidemic prevention and control after three gruelling years. Many countries have survived the toughest phase of the pandemic, let go of zero-Covid strategies and opened up their borders. But China insists that “lying flat is not a solution”.
China’s road to economic recovery has been paved with difficulties, what with the direct and indirect costs of battling Covid-19 heaped on existing domestic and external factors. Now, not only is the annual economc growth target of around 5.5% unattainable but economists are also worried that the decline in investor enthusiasm and consumer confidence would leave a “permanent economic scar” on China’s long-term economic prospects. There are also concerns about whether China can go back to achieving a medium to high growth rate of 5% to 6% in the coming years.
Currently, the major city of Chengdu in western China has entered lockdown. As of 6 pm on 1 September, 21 million Chengdu residents must “stay home in principle” as residential communities enter closed management, and are not allowed to leave the city unless absolutely necessary. Only one person per household with a 24-hour negative PCR test result is allowed one trip per day to purchase essential items nearby. The situation is virtually a “lockdown”, despite the authorities not calling it as such in their statement.
Chengdu is yet another Chinese megacity to be locked down after Shanghai’s April ordeal. Ranking sixth out of the seven megacities in China, Chengdu is already teetering from a drought and power shortages.
This week, megacity Shenzhen in southern China has also been hit by a worsening Covid-19 outbreak. Strict semi-lockdown control measures have been implemented in the districts of Nanshan, Dapeng, Luohu, Futian, Longgang and Longhua, and large-scale meetings and conventions have been cancelled. Indoor areas such as wholesale markets and cinemas have closed down, while dining-in has been banned. Residents in some subdistricts have even been subjected to stricter regulations and prohibited from leaving their homes.
Guangzhou, another megacity, also reported 16 confirmed Covid-19 cases in the current outbreak. The local government took swift action and prohibited Haizhu district residents in some subdistricts and buildings from leaving their homes. This week, Shanghai also announced that large gatherings should not be organised unless necessary, while in-person seminars, training and conventions should be postponed if possible.
Ensuring nothing goes wrong
Reuters quoted a Capital Economics economist as saying that 41 cities accounting for 32% of China’s GDP are currently in the midst of outbreaks, the highest since April. While the economic impact of this round of anti-epidemic measures is still limited, it will become more pronounced now that Chengdu is also under lockdown.
In fact, China has experienced several setbacks since the pandemic broke out in 2020. Wuhan was locked down in early 2020, Xi’an in late 2021 and Shanghai for two months from April this year. In contrast, Chengdu’s current Covid-19 outbreak still pales in comparison with Shanghai’s situation back then.
Shanghai reported over 4,000 new Covid-19 cases (including asymptomatic ones) a day before implementing its lockdown on 1 April. On the other hand, Chengdu reported 157 new Covid-19 cases (including asymptomatic ones) on 31 August, but local authorities were quick to adopt strict control measures.
If a large-scale outbreak occurs at this critical juncture and affects the tone for stability, spoiling the atmosphere to enthusiastically affirm the zero-Covid policy, officials in charge may lose their chances for promotion or even their positions.
Local officials are clearly on tenterhooks and wary of becoming “the next Shanghai”. They want to quickly break the chain of transmission, even if it comes at the expense of the economy. A self-evident factor is China’s most important political event of the year — the Chinese Communist Party’s 20th Party Congress, which will commence in less than two months.
Local officials are perhaps most concerned with ensuring that nothing goes wrong before the congress begins; hence, they would rather enforce strict anti-Covid measures than let their guards down. If a large-scale outbreak occurs at this critical juncture and affects the tone for stability, spoiling the atmosphere to enthusiastically affirm the zero-Covid policy, officials in charge may lose their chances for promotion or even their positions.
Doubling down on anti-epidemic efforts
China’s higher-ups have indirectly reminded party and government officials this week that anti-Covid efforts must not crumble. On 31 August, the Central Commission for Discipline Inspection published an article on its website, warning that “lying flat” is not the way to go in the face of the pandemic, and emphasising that a firm adherence to the dynamic zero-Covid strategy will ensure a quicker control of the pandemic, in turn minimising the impact on economic and social development.
This implies that while the Chinese State Council is beefing up its efforts to stabilise the economy, the easing of anti-Covid measures necessary for economic revitalisation, including the loosening of movement restrictions inside and outside of the country, will only happen after the 20th Party Congress.
... relaxation of anti-Covid measures may have to wait until next spring.
So then, will the authorities adjust the zero-Covid policy soon after the 20th Party Congress? It seems highly unlikely as the risk of infection increases during winter — relaxation of anti-Covid measures may have to wait until next spring.
China’s strict anti-epidemic prevention and control measures were once seen as a great success. But the country is now trapped in the achievements of its zero-Covid policy, and has implicated the economy in the process. It is as if all of its efforts have come to nothing.
How will China exit from its strict anti-Covid policy, and at what cost?
Meanwhile, the optimists believe that with China’s massive market and strong growth potential, coupled with the fact that it even survived the US’s trade war, China’s economy will make a quick recovery as soon as anti-Covid measures are relaxed.
Indeed, the Chinese government continues to emphasise that “living with the virus” will result in huge casualties, citing examples from the huge loss of lives in many countries that have chosen to do so. How will China exit from its strict anti-Covid policy, and at what cost? Let’s revisit these questions after the 20th Party Congress.
Related: China's exorbitant cost of zero-Covid | Shanghai's worsening Covid-19 outbreak is turning political | Electricity woes further dampen China’s hopes of economic recovery | China to prioritise economic stability ahead of CCP 20th Party Congress | Is a zero-Covid policy adversely affecting China’s economic recovery?