Friday, May 6, 2022

China’s zero-Covid policy won’t work, President Xi is just dragging down the global economy

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China’s strict lockdowns have hit its public finances hard as the country loses the battle to eradicate Covid

Countries like New Zealand and Australia, challenged by super-contagious omicron strains, abandoned their zero-Covid policies.

But the Chinese government fights on, hell-bent on eradication.

It’s a losing battle. The mutant virus defies the most draconian social restrictions the Chinese state can impose on it.

The fight is also ruining public finances – and threatening to pull an already ailing global economy into the abyss.

All but 13 of China’s top 100 cities were under some form of restrictions earlier this month, according to research firm Gavekal Dragonomics.

The strict lockdowns have hit the economy, particularly in Shanghai, home to the world’s busiest port and China’s main stock market, as well as a major international business community.

An outbreak in this megacity of 25 million has seen its citizens face what appears to be an endless and harsh lockdown, while many businesses have been forced to close.

The global supply chain suffers as a result. Neighbors like Vietnam and Cambodia are most at risk. But other major economies, including the EU, US and Japan, are not immune either: Chinese exports account for a fifth of Japan’s total imports and more than 15 percent of America’s overseas purchases.

The more these Covid lockdowns sap China’s growth, the harder it is for policymakers to stick to their plans to pay off the debt of the country’s ailing real estate sector following the disastrous experiences of giant developer Evergrande.

Indeed, this week President Xi Jinping announced a squandering of public works to try to revive a Chinese economy that has faltered under the weight of Covid lockdowns.

With the world’s second-largest economy “on the verge of collapse,” according to Société Générale, a feared Covid lockdown could be the last straw in Beijing.

Beijing has now closed all of the city’s schools to further tighten Covid restrictions as China’s capital tries to prevent a broader outbreak.

The city of 21 million has a third round of mass testing on Friday.

Beijing announced 50 new cases on Thursday. That’s a drop in the bucket compared to the experiences of other world capitals like London, which have regularly seen more than 20,000 cases a day during viral peak periods.

Tight containment measures in Shanghai have already sparked anger over shortages of food and essential supplies, and the inability of hospitals to deal with other health emergencies

So why does China insist on eliminating Omicron?

Many experts point to Xi Jinping’s hubris in his determination to achieve his vision of a Covid-free China.

Xi likes to present himself as infallible — especially as he prepares to consolidate his power at the 20th Chinese Communist Party National Congress later this year.

He has used much of his authority to defeat the virus, which first emerged in China and has been able to spread around the world, thanks in part to the cover-ups and lack of free information that characterize the Chinese police state.

Xi has previously boasted about the achievements of China’s zero-Covid policy – with just two official Covid-related deaths in all of 2021.

“No effort should be spared to treat every case, save every patient, and genuinely respect the value and dignity of every human life,” Xi Jinping said at a health summit last year, in an unusual display of concern for human rights.

But now the death toll in China is increasing every day.

It appears that the Chinese state’s pervasive surveillance and repression, which enabled it to eradicate the earlier forms of Covid, is now backfiring.

Much like his counterpart in Moscow, no one seems willing or able to tell the Chinese dictator that he is making a terrible mistake.

Instead, Beijing is “doubling down on its message to stop the virus” even as outbreaks spread, health security expert Nicholas Thomas, an associate professor at the City University of Hong Kong, told CNN. Given the zero-Covid policy linked to Xi, it is evident that “this line will be maintained for the foreseeable future,” he said.

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