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Inside China’s Zero Covid Strategy

by Torsten Weller
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The zero Covid strategy is here to stay and companies are going to have to adapt to manage its unpredictability if they want to stay ahead in the market – but what is China’s end game? And what impact is it likely to have on real people as the policy drags on, ask CBBC’s policy team, Joe Cash and Torsten Weller.

“Our prevention and control strategy is determined by the Party’s nature and mission, our policies can stand the test of history, our measures are scientific and effective,said state media after a meeting of the Communist Party’s governing Politburo Standing Committee on May 5th. Reading between the lines: the Party considers Covid to be an existential threat, not just to itself and its rule, but, as far as the government is concerned, the continuation of the Chinese nation-state. That is the logic informing China’s zero Covid strategy, and it goes a long way in explaining why the policy will not be disappearing anytime soon. 

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There has been some public debate in China surrounding whether the country should 躺平 (tang ping) or ‘lie flat’, and accept that choosing to live with the virus risks a surge in Omicron cases that would overwhelm China’s intensive care unit capacity by as much as fifteen times. These voices are quickly quashed by the politics, however, as faith in the Party trumps science. 

This Policy Update explains the rationale behind the Party’s decision to stick with a zero Covid strategy while shedding light on how it is changing everyday life in the country. 

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To borrow the smoker’s old adage, defeating Covid is easy, China’s done it many times already. Back in April 2020, for example, air-raid sirens blared and car horns were honked as people took to the streets in jubilation to mark the official end of the Battle to Defend Wuhan. Two years later, as the state media now speaks of further battles to defend Shanghai and Beijing amid a spate of Covid outbreaks in China’s two largest cities, previous declarations of freedom from Covid could start to ring hollow and risk the public wondering whether the Party is suffering from a case of premature emancipation. And looking ahead, if there are more battles in the second half of 2022, the masses may even edge closer to questioning whether President Xi really is the new infallible “Great Helmsman” that propaganda organs are busy positioning him as ahead of his election to an unprecedented third term in the autumn.

There are also compelling scientific reasons for China to maintain a zero Covid strategy. Firstly, some 52 million people over the age of 60 are yet to receive two jabs of the various indigenously-developed vaccines that regulators have approved for use in the country. A fact that is worsened by China having elected not to approve any foreign-developed mRNA vaccines for domestic consumption (the regulators approved two China-made mRNA vaccines to enter clinical trials in April 20224 ), while its Sinopharm and Sinovac vaccines are only as effective as BioNTech’s mRNA vaccine across all age groups after three shots. Secondly, China lacks the intensive care facilities it would likely need to cater for a massive spike in Covid cases. A recent study carried out by researchers at Fudan University models that hospitals would end up at 15.6 times overcapacity, resulting in 1.55 million excess deaths. 

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Testing times call for testing measures 

As Shanghai enters its seventh week of hard lockdown, with residents confined to their apartments and those found either to have Covid or be a ‘close contact’ with someone who has, through daily mass testing, being sent to centralised quarantine, commentators are wondering whether what is currently happening in Beijing is indicative of China’s zero Covid future. 

Beijing residents are currently obliged to turn out for testing every day, and there is a requirement to show that a test has been taken in the preceding 48 hours in order to enter any public spaces (people have also been instructed to work at home, while inside dining is no longer permitted, taxis cannot take passengers across district lines, and all non-essential shops have shut). At the time of writing, the city has managed to avoid going into a hard lockdown, and cases hover around 50 per day; people are still free to leave their apartments to go to the supermarket and exercise. 

Tensions are running high in the capital, however. Beijing residents worry that their city could soon succumb to an extended lockdown. On 12th May, fears that the Beijing government was about to announce a three-day lockdown gripped Chinese social media platforms after the start of the city’s daily Covid press conference was delayed by an hour; netizens couldn’t help speculating that the city was going to follow Shanghai down a path where a three- or four-day lockdown turns into a never-ending one. 

Meanwhile, testing appears to have become a part of daily life even in areas that are supposedly Covid-free. Jiangxi Province as well as the cities of Jinan in Shandong Province and Yulin in Shaanxi Province, for example, have all announced that they will test all their citizens on the same schedule as Beijing, even though their respective governments have not reported any cases. Finally, even though life has reportedly returned to normal in Shenzhen after the city exited a lockdown, there is still a requirement to provide proof of a negative test taken in the preceding 72 hours in order to enter public buildings or use public transport.

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Economic impact 

The lockdowns are having an enormous impact on the country’s economy, particularly in terms of supply chains, logistics, and the country’s labour force. 

Shanghai is home to one of the world’s busiest ports, yet hundreds of ships are currently anchored off its shores, unable to offload their cargo. Furthermore, even when companies can unload the components they need for manufacturing or the products their customers have ordered, they cannot get the permits required to move them off the dock, across the city, or into other parts of China. Supply chains are under considerable strain nationwide as a result. 

Meanwhile, with lockdowns shuttering factories in city after city, the country’s 300 million migrant workers that comprise the country’s informal economy are locked out of economic life with no alternative other than to go back to their family farms and a subsistence way of living. That is significant because 60% of China’s labour force works within the informal economy, and the unskilled service sector is the fastest-growing part of the country’s labour force as a whole. While it is too early to tell the full extent of the impact of a zero Covid strategy on the country’s economy, it is likely that the informal economy and migrant labourers might feel the effect for years to come, not least because of the influence it will have on industrial productivity. 

China’s Covid end game 

At present, there appears to be no clear way out of Covid for China. The country has not approved foreign mRNA vaccines for use, nor has it socialised the idea of living with the virus among the public. So, how might the government resolve the situation? These are the front runners among China watchers:

  • The government very gradually eases the restrictions people are facing without stating that it is abandoning its zero Covid strategy
  • After the National Party Congress this Autumn, and President Xi’s election to a third term, the government becomes more relaxed about Covid and eases the restrictions fairly quickly
  • The World Health Organization downgrades the status of Covid, declaring the ‘Pandemic’ over 

The CBBC View 

Zero Covid is clearly here to stay, so CBBC has been working actively to support members by: 

  • Sending a letter to Minister Wang Wentao of the Ministry of Commerce (MofCom) outlining the specific issues members are facing as a result of the lockdown measures. A copy of the letter was also shared with Mayor Gong Zheng at the Shanghai Municipal Government
  • Meeting with the MofCom department for Foreign Direct Investment
  • Holding a series of sectoral roundtables considering how the Shanghai lockdown has affected companies in the city and across the country more broadly, and exploring mitigatory measures.
Entering China is a key decision for businesses of all sizes. Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC can provide you with the platform to unlock your potential.

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