Recently, China published its economic data for 2022, revealing that the nation’s GDP grew 3 per cent during the year – a little short of the government’s 5.5 per cent target. China’s strict zero-COVID policies are to blame. However, having abandoned the policy in December China’s government faces multiple challenges in its determination to kickstart and fuel growth.
Since 1989, China has enjoyed almost constant growth, so for many Chinese households, this period of strict lockdowns has been one of the most trying economic times they have faced. For younger generations, it’s unprecedented. China’s economic recovery requires the need to restore consumer confidence and consumption and empower the private sector to generate more jobs. Unemployment rates are still near historic levels – in December, for example, youth unemployment (16- to 24-year-olds) stood at 16.6 per cent. Restoring confidence and spending and accelerating job-creation, particularly among younger generations, will be no mean feat.
At the same time, the sudden unlocking of zero-COVID policies means that inevitably China still faces waves of infection. The first wave from mid-December 2022 to mid-January 2023 hit mostly urban areas, while the second wave (from mid-January to mid- February) is affecting mostly rural areas as large numbers of migrant workers return to their villages for the Chinese New Year.
The third wave is expected from late February to mid-March when migrant workers return to their work in developed areas. The Chinese Center for Disease Control and Prevention estimates that 10–30 percent of the 1.4 billion population will contract Covid. According to the China National Health Commission (NHC), between 1 and 20 December alone, 17.56 per cent of the Chinese population contracted Covid, totaling 248 million people. More than 50 percent of Beijing and Sichuan Province residents had the disease.
An additional challenge facing China’s re-emerging economy is that of long COVID (post-COVID-19 condition). According to scientific data, more than 55 percent of COVID-19 patients in Wuhan, China, still have symptoms two years later. President XI Jinping said the next phase of its Covid management would be “preventing severe cases”, and prioritizing treatment and elderly vaccinations.
Out of concern for China’s abrupt lifting of its Zero-Covid policy, particularly given the lack of data and transparency, more than 20 countries, including the US, have introduced Covid test requirements for passengers coming from China.
On 3 January China’s Foreign Ministry spokeswoman warned that China would take corresponding measures “based on the principle of reciprocity.” China so far has suspended issuing new visas in South Korea, Portugal, and Japan and called for lifting “discriminatory entry measures.”
China currently allows foreign nationals with valid residence permits and valid visas to enter the country under certain limited conditions. However, with uncertain quality of healthcare, and potential policy changes likely at any time – if infection numbers increase significantly, for example – foreign travel to China is an area of concern. Chinese media has admitted that hospitals and morgues in certain parts of the country are overwhelmed, and shortages of fever treatment medicines were widespread.
As a result, we outline a number of areas for concern – travel to China and the on-going risk of infection, the possibility of sudden policy changes, potential social unrest, and lagging economic recovery.
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