China’s zero-Covid approach has economists concerned about falling too far behind US, Europe

• Domestic Omicron spread and the upcoming Beijing 2022 Winter Olympics are also said to be testing the limits of Beijing’s zero-tolerance approach
• A gradual easing of restrictions in certain areas of China could help it learn to live with the virus, but economists say this is unlikely until after ‘two sessions’ in March

Prominent Chinese economists are looking for a way out of China’s zero-tolerance approach to the pandemic, at least in select regions of the country, and perhaps not until after a national legislative gathering in March.

They warn that, as coronavirus-control strategies between China and Western countries continue to diverge, China could find itself at a comparative disadvantage, socially and economically.

That divergence in policies is likely to become “unprecedentedly” great, resulting in “extreme pressure” on China this year, warned Liu Yuanchun, an economist and the vice-president of Renmin University in Beijing, at a virtual forum on Monday.

“Compared with the unexpected impact brought by the pandemic in 2021, the shock felt in 2022 is likely to be stronger,” he said.

Liu’s take came after the former head of the finance ministry research institute, Jia Kang, said last week that the relatively low severity of the Omicron variant, compared with the Delta variant, could lesson the impact on the United States and Europe and give them an advantage in reopening while Beijing sticks with its zero-Covid approach.

Jia suggested that China begin to let some regions moderately step back from the strict restrictions after March’s “two sessions” – annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference.

This approach, he said, would help give China domestic experience in living with the coronavirus, with the hope of seeing its severity reduced to that of a mild flu.

“[We should] strive to be in line with the production reopening in the US and Europe, to improve China’s international competitiveness, and to keep the Chinese economy running within a reasonable range,” Jia said at a virtual forum on January 18.

His view was echoed by Mao Zhenhua, founder and chairman of China Chengxin Credit Management, who said authorities were likely to review the country’s coronavirus strategy after the two sessions.

“We have considerable experience at home – no need to learn from other countries,” he said during a virtual forum on Wednesday. “It is hoped [China] can make some improvements in its coronavirus control measures, but the most important thing is protecting livelihoods and ensuring economic growth.”

Their comments came as local outbreaks have rekindled debate over the rising costs of China’s zero-coronavirus policies, illustrated by strict lockdowns and ensuing disruptions in Xian; in the northern port city of Tianjin; and in various cities in Henan province. The domestic Omicron spread and the upcoming Beijing 2022 Winter Olympics are also said to be testing the limits of Beijing’s zero-tolerance approach.

There has also been backlash against prolonged “one-size-fits-all” measures implemented by local authorities, including after a mayor in Henan province threatened to detain local Lunar New Year returnees. These types of incidents also fuel debate over how long China’s zero-tolerance approach will remain feasible.

Last week, after UK Prime Minister Boris Johnson called for an end to most restrictions in England, a top official with the World Health Organization said Europe was moving toward a kind of pandemic endgame, and a recent study published in The Lancet argued that the end of the pandemic could be near.

Beijing, meanwhile, still isn’t pulling any punches in its pursuit of zero cases. The capital city has put greater scrutiny on cross-border packages ahead of the Olympics, while further testing residents in various districts as dozens of infections were reported in the past 10 days.

Jia noted how difficult it would be to balance the current model of zero-Covid with the notion of herd immunity, but he said that should not stop China from forging its own path based on whatever situation arises.

“We are facing severe challenges caused by the opening of the external world and threefold pressure,” Jia said. “It is extremely necessary and feasible to dynamically optimise the Chinese-style, zero-tolerance mechanism and its technical route amid the global fight against the pandemic.”

He also said that Beijing could learn from last year’s Tokyo Olympics, especially by setting up a command centre for the Games and giving it autonomy in making decisions related to coronavirus emergencies, rather than having to abide by a longer and bureaucratic process of reporting such incidents and then waiting for a decision.

Moving forward, Liu also warned that international political rifts could escalate as the pandemic ends and the disease becomes endemic.

“When we find that the virus no longer poses a major threat to life, it will be a time when interests, goals and actions differ … with further aggravated social conflicts,” he warned. “The nature of self-interest will be fully demonstrated in the post-pandemic era.”

Author: Orange Wang, SCMP