China was watching COVID-19 from afar and is now suffering the onslaught of infections and quarantines. Will your economy know how to resist?

Although since China the expanded virus towards the world, the Asian giant recovered quickly from the pandemic while watching from afar the suffering of the rest of the planet. They proudly felt confident in their ‘zero Covid’ policy, which implied immediate quarantines as soon as a contagion was detected and a methodical and rigorous tracing of contacts. The goal was to neutralize the spread.

But two years later, things seem to have turned upside down. While most countries see how the contagion curve continues to decline, and especially the number of deaths from COVID-19on China cases have started to skyrocket. Europe and the United States have already left the mask behind, but the Chinese are seeing their cities fall – one by one – under strict confinement.

The hard lesson that he left wuhan at the beginning of 2020 it has not been enough in the face of this onslaught of the ultra-contagious omicron in China.

Although the number of infected is negligible compared to other countries – taking into account that it is a country of 1.4 billion inhabitants – President Xi Jinping’s strict strategy was to limit infections to a minimum.

Since the beginning of 2022, the number of quarantined cities has been increasing and now there are more than 35 million Chinese who have had their mobility restricted in order to control the virus.

The focus of the pandemic is Jilin province, where 26 million people live, who cannot leave their region. Of the more than 5,000 cases detected on Tuesday throughout the country, more than 3,000 correspond to this province.

Given this, the cities of Jilin (of the same name and with 4.5 million inhabitants) have been quarantined; Changchun, capital of the province, with 9 million, and Yanji, with 700 thousand and located near North Korea.

The most emblematic case is that of the city of shenzhenwith 17 million inhabitants, a technological and financial hub known as the ‘Silicon Valley of China’ where the largest companies in the country are located, such as Huawei, the BYD carmaker, the Ping An insurer and Tencent Holding, operator of WeChat.

On Monday, in addition, the Taiwanese electronics giant Foxconn, Apple’s main supplier, announced the suspension of its operations in Shenzhen because the confinement affected the operation of its factories. This quarantine is added to those that the cities of Dalian, Nanjing and Tianjin have suffered since last week.

In Shanghai, the country’s most populous city, with 25 million inhabitants, confinements have been decreed by sector but have also affected nurseries, schools, shopping centers and restaurants.

Why have infections skyrocketed?

The ‘zero Covid’ strategy, which implies the elimination of the circulation of the virus, has come hand in hand with lockdowns, contact detection and mass testing, in addition to vaccination. China has 87% of its population fully vaccinated.

However, as most Western countries have already confirmed, the omicron variant is milder but much more contagious, and neither quarantines nor vaccinations have prevented the virus from spreading.

“Within China the debate is focused on Hong Kong, which has seen a recent spike in the number of cases, and many in mainland China are blaming the increase in infections on Hong Kong because it did not adopt the ‘zero Covid’ policy. ”The economist Carlos Aquino, an expert in China and Asian countries, explains to El Comercio.

In the economic enclave they have already

“It is impossible that there are no cases in the country, despite the efforts that the government has made to neutralize the virus,” adds Aquino, who is also coordinator of the Center for Asian Studies (CEAS) at the National University of San Marcos.

The concern is now focused on the impact of the Chinese economy and, therefore, on the impact on the global supply chain, especially given the confinements in key cities such as Shenzhen or Shanghai.

“It is certainly having an impact on the economy and China is one of the critical links in the supply chain. The price of oil has been reduced because there are fears that part of the Chinese economy will come to a standstill and demand will drop. Keep in mind that, in Shenzhen, for example, there are factories for cars and parts and components for electric cars. In Japan, Toyota is very worried.”clarifies.

“The recent COVID-19 outbreak and new restrictions, in particular the lockdown in Shenzhen, will weigh on consumption and cause short-term supply disruptions”Hong Kong economist Tommy Wu of Oxford Economics told Reuters.

“With a transmission like that of omicron, a zero Covid strategy does not work”, Jeffrey Lazarus, co-director of the Viral and Bacterial Infections Program of the Barcelona Institute for Global Health (ISGlobal), who used to defend the strategy established by China, comments to the Spanish media “El Independiente”. “A year ago, I would have bet on Covid zero, but not anymore. In any case, that does not mean that we do nothing: there are many things that can be done to reduce transmission and protect the vulnerable population without the economy suffering so much ”, add.

The Political Component

Despite this, the Chinese authorities and epidemiologists insist that this is not the time to change the strategy so as not to unnecessarily saturate the health system.

The epidemiologist Zhang Wenhong, one of the most influential in the country, assured that “This is not the time to discuss the zero Covid policy”. In a publication on the Weibo social network, the expert explained that the Asian country should “Use this period as an opportunity to design wiser, more comprehensive and sustainable anti-pandemic strategies.”

For his part, Wang Guangfa, a respiratory system specialist known for being one of the first to visit Wuhan during the first outbreak, was confident that in “28 days” the figure of “zero cases” will be achieved again and that the curve will begin to decline, as has happened in the rest of the world.

To this we must note a fundamental milestone for Chinese politics: in October of this year the 20th National Congress of the Communist Party will be held, where it is almost a fact that Xi Jinping’s mandate will be renewed.

“Neither China nor Xi Jinping is comfortable with instability, which they are having somehow with the war in Ukraine, the rise in food prices, global inflation, and on top of this outbreak of COVID-19. There are too many things that are rocking the boat, and China is not going to allow it.”adds Aquinas.

For this reason, he points out that he does not believe that China will relax its ‘zero Covid’ policy much: “China has set a goal of 5% growth for this year and will do everything possible to achieve it. Now, if more contagions arise and if they consider that the economic cost is very high, then they could relax it, but perhaps in a more localized way and favoring the fundamental industrial centers for the Chinese economy.”