By now, most major economies have found a
way to live with COVID 19.
Except for one.
The China COVID infections, soaring
lockdowns, quarantines, business shutdowns.
WHO is very concerned over the evolving
situation in China.
The wave of protests that swept across China over
its draconian COVID restrictions have pushed
Chinese leadership to act. The country is
beginning to lift its more stringent COVID
rules after nearly three years in isolation.
But what could mark the end of zero-COVID may
just be the beginning of China's pandemic
problems.
Crunch time starts about a month from now.
Infection will be building, but the Spring
Festival is the equivalent of Christmas
in China. This year, it starts on January 21st.
I think in the next couple of weeks, China
would be face with unprecedented pressure to
the health system.
You're going to see COVID zero pass this.
You're going to see at least this wave of COVID
passed us and you're going to see a
reactivation of the economy. But I think
people have been way too optimistic on how fast
this can happen.
Hundreds of demonstrators took to China's streets
in late November after a fire erupted in an
apartment building in the western city of
Urumqi. Protesters blamed China's strict
COVID rules for hampering rescue efforts,
although officials have denied those claims.
The demonstrations followed months of
extreme testing protocols and
unpredictable lockdowns that have strained
China's economy.
The protesters were outraged about the
personal danger and the inhumane conditions that
were being imposed under the zero-COVID policy by
callous bureaucrats that were not allowing people
to go to the hospital, not allowing firefighters
to prevent fires.
Gradually, China did not make adjustment or
adaptation to the changing nature of the
virus, especially the transmissibility of the
virus.
In a surprising pivot, local and central
governments are now starting to swiftly shed
their rigid restrictions. Citizens
are no longer required to provide a negative
COVID test and health code check when traveling
domestically. The government is also
allowing more people with mild cases to
quarantine at home a departure from the
massive quarantine facilities with thousands
of beds.
The Chinese government wants to preserve face
for the zero-COVID policy. It has not
renounced that policy.
In name, the zero COVID policy continues, it's
just like Swiss cheese. There's just so many
holes in it, though there's now becoming a
whole lot of exceptions.
It is a rough time for the local people right
now. You can see everyone scrambling to
purchase food in advance. There's a
shortage of medicine.
The hospitals and the public health system are
struggling to keep up with the demand.
The country is now scrambling to protect its
most vulnerable citizens from a potential surge
with its domestically made shots.
There are several key issues that drag China's
vaccination campaign.
The most important thing, I think, is the
vaccination hesitancy.
People have less of a trust towards its own
vaccines. And secondly, there was no urgency of
getting vaccinated before the omicron came.
And there's no incentive to do so because anyway,
during the lockdown, the zero-COVID policy, people
have to get tested very frequently.
At times, Chinese authorities have moved to
lock down entire cities at the center of key
supply chains weighing on the country's economic
growth. The World Bank slashed its economic
growth forecast for China to 2.7% in 2022,
about half of the nation's target.
You're going to have to have the virus sweep
through all of China. We have a situation right
now where firms have held off for months and
months and in some cases years from investing,
borrowing or hiring because they're so
worried about COVID-zero lockdowns going back in
place.
Between companies that manufacture in China for
China, they're not going anywhere.
But there are also companies that are
manufacturing in China for export out of China,
and those are the companies that are
actually looking at different locations.
And I think we'll gradually be be moving.
That's not to mention international travel to
China still remains extremely restricted and
requires eight days of isolation upon arrival.
If you are coming into Shanghai, you'll still be
quarantined in a hotel for five days at least.
Now, unless that is dropped, it becomes
difficult for foreign investors to come in and
take a look at the China market themselves.
One popular model from the Institute of Health
Metrics and Evaluation predicts that China could
suffer over 1 million COVID deaths in 2023,
with cases peaking in April.
What about China?
I think China is in trouble. You know, two
things. One, they haven't lifted all
mitigation. They're still implementing some
mitigation. I think that's going to slow the
spread but not prevent it.
So how many people are dying right now?
We don't know I mean, much more than what
they're reporting. The other thing with China is
they have different strains circulating in
different parts of that country. So in Beijing,
it's BF.7, which is very immune invasive.
Other parts of the country are BQ.1 and
BA.5. So and also XBB, which is another
immunoevasive variant. So they have the
potential to reinfect themselves.
And this year's Spring festival is very early.
And it's combined with the flu season and the
winter when people have more indoor activities.
So I'm very concerned this may become a super
spreader event.
Not to mention there are doubts that China's
economy will be able to make a swift recovery
even as it moves away from zero COVID.
The question is now that COVID has broken that
supply chain in certain ways, as we come back to
reform the supply chain, is COVID the straw that's
going to break the camel's back?
I think for some companies, the answer
will be yes. But other companies that have the
most complex supply chains, I think the
answer will be no.