Shenzhen first began locking in January. By March, Shanghai was completely blocked, with strictly restricted travel to and from the city, a strict quarantine regime, mass tests and the closure of offices, schools and factories.
Beijing has already begun mass tests along with selective blockades, and it would come as no surprise if the entire city closes in the next few weeks. Many other megacities may follow. After all, as we already know, the omicron variant is spreading at lightning speed.
This is hardly a trivial matter. New Zealand and Australia’s Zero Covid strategies were interesting experiments for public health workers. But neither side makes much of a difference to the world economy in one way or another.
In contrast, China is the world’s second largest economy and had to overtake the United States this decade. Its manufacturers are crucial to global supply chains, and with container ships sailing in Shanghai’s vast ports, they are already squeaking.
His money and investments drive global markets. What happens in China determines what happens in the rest of the world.
His zero Covid strategy put the bears in action. The blockages will hit an economy that still relies heavily on production; you can’t make microchips, cars or phones working from home. This will cause social unrest, the bears say.
And this will expose the limitations of China’s top-down control of society, potentially even provoking a challenge to President Xi’s rule (hardly helped by his support for Vladimir Putin’s catastrophic invasion of Ukraine).
The Shanghai benchmark index has fallen from 3,600 to 3,000 so far this year as investors flee, and surveys show that foreign companies are increasingly considering whether to withdraw from the country.
It is true that Covid has hardly been treated well, and this is before we address the question of how the virus originated. China was too arrogant to buy superb Western vaccines, and too slow to vaccinate, especially among the elderly.
When the hyper-infectious version of omicron appeared, China was caught unprepared and had no choice but to close cities, regardless of the cost to its economy. If it was torn apart, as Hong Kong has shown, the health care system could be overloaded.
And yet it is just ridiculous to pretend that this is more than a slight failure or that blocking is insane. Recent evidence suggests that three doses of the home-made Sinovac vaccine are at least as effective as the Pfizer and Moderna vaccines, and probably even better for those over 80, the most important sector of society for protection. Once these third shots are delivered, China will be in much better shape.
Australia’s experience shows that a realistic blockade, followed by mass vaccination, is an effective policy to control mortality at a relatively low cost. Shenzhen, the country’s key technology hub, is now fully reopened after a two-month blockade. Chances are, Shanghai will be similar. And Beijing can avoid a complete closure. crazy? Not exactly. When the final number is calculated, mortality in China is likely to be lower than in most other countries and at a much lower cost.
This is the key point. China’s rise and powerful economy remain the most important history of the 21st century. It may fall apart one day. But Covid and a few weeks of blockades in his big cities will not prove that they will be destroyed. He is too strong for that and has too much momentum behind him.
By autumn, temporary blockades will be forgotten, ports will reopen and restrictions will be lifted. China’s economy will shake again as the United States and Europe are in recession again, working to pay for the devastating costs of closing society in 2020. In truth, this is just a flashback – and China’s rise is still long way to run.
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