China is on the verge of a nervous breakdown over the zero Covid policy
The government's confusion in enforcing the zero Covid policy is driving China to exasperation. From the exceptional protests to the reactions of the Stock Exchange, here are the economic forecasts of the experts and Beijing's plans to deal with a new major epidemic
Protests in China are increasing more and more, amid terror of infections and intolerance for the draconian restrictive measures, Beijing's rigid zero Covid policy alternating with momentary easing is creating great confusion in public opinion and, according to The Economist , could even have contributed to the increase in cases.
THE NUMBERS OF COVID CASES IN CHINA
On November 26, according to the National Health Commission, China recorded the fourth daily record of Covid cases with 39,791 new infections, of which 3,709 were symptomatic and 36,082 were asymptomatic. Today, according to Reuters , the peak would have even reached 40,052.
And last week , for the first time in six months, Beijing authorities released the number of deaths due to the pandemic: 5,233, including many elderly people with pre-existing conditions.
THE MOST AFFECTED AREAS
Chongqing, the largest city in the world and in fourth place in the ranking of the most populous cities on Earth (over 31 million people), and Guangzhou, an equally densely populated port city (about 19 million people), are the places most new infections. But throughout the country the struggle continues to contain the outbreaks.
THE ECONOMIC CONSEQUENCES OF THE ZERO COVID STRATEGY
According to data from brokerage firm Nomura, reported by the Economist , "in all, the areas that produce a fifth of China's GDP are now under some form of blockade."
And, Le Grand Continent writes that “cities that underwent full or partial containment at the end of last week concentrate the majority of China's wealth generation,” with “Beijing, Guangzhou and Chongqing [which] alone account for almost 9% of GDP".
THE REACTIONS OF THE STOCK EXCHANGE…
The protests, due precisely to the impatience with the endless restrictions, are not even reassuring investors and markets. Indeed, Reuters today writes that stocks and commodity prices have suffered a 'sharp' decline, raising concerns about the implications for the growth of the world's second largest economy.
…AND THE PREDICTIONS OF ECONOMISTS
“It is clear that China's tough anti-Covid measures have impacted consumer and business sentiment for some time and China's persistent GDP downgrades have been steady for over a year, with more downgrades on the way,” he said. George Boubouras, executive director of K2 Asset Management in Melbourne, told the news agency. "Markets dislike uncertainty and investors will seek some clarification on China's harsh internal lockdown protocols."
For Nomura's Robert Subbaraman, "there is a risk that China's plan to live with Covid is too slow, that the increase in cases will fuel other protests and that social unrest will further weaken the economy" or that they will push instead the government set out a clearer plan.
But the general sentiment is that the economic hit will be greater than anticipated.
“Even if China is on track to abandon the zero Covid approach, the low level of vaccination among the elderly means that the exit will likely be slow and perhaps messy – CBA analysts said -. The economic impacts are unlikely to be modest."
THE CONFUSION OF THE CHINESE GOVERNMENT
What the experts – and the Chinese who take to the streets – reproach the government with as well as the fact that the zero Covid policy is exhausting is also the lack of clarity and confusion in implementing it. In fact, the strict measures put in place alternate with announcements of easing the restrictions which, however, usually last a few days before the cases go back up and new strict rules are reintroduced.
But the turnaround, writes the Economist , "is not surprising" because "when the easing was announced, cases were already on the rise" and "it has accelerated since then".
"More puzzling – notes the article – is why central authorities felt they could ask local officials to ease restrictions and at the same time expect them to keep cases low." These contradictory goals have caused "chaos and confusion" and may have even contributed to the rise in cases, according to Huang Yanzhong of the US think tank Council on Foreign Relations.
THE PLANS OF THE GOVERNMENT
With cases surging, says the Economist , health officials are bracing for a major outbreak. On Nov. 17, they announced plans to convert 10 percent of hospital beds to intensive care unit beds, and also promised to unveil a plan to boost vaccination rates among the elderly (only 40 percent of Chinese people over 80 have made a third recall).
“But these projects require time and resources – observes the British newspaper -. China currently has fewer than 4 intensive care beds for every 100,000 people. Compared to over 30 per 100,000 in America."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/sanita/la-cina-e-sullorlo-di-una-crisi-di-nervi-per-la-politica-zero-covid/ on Mon, 28 Nov 2022 11:55:23 +0000.