By Eric Vandenbroeck and co-workers

China's COVID-19 Politics To The Test

With COVID-19 increasingly tamed, governments across Asia have been winding down some of the world’s strictest control measures. In September, Taiwan announced that it was reopening its borders and phasing out its quarantine policies; South Korea lifted its outdoor mask mandate and scrapped mandatory COVID-19 testing for inbound travelers. On 11 October, Japan will end a pre-departure test requirement for travelers who have received at least one vaccine booster and fully reopen its borders for the first time since 2020. Even Hong Kong, which had emulated mainland China in maintaining stringent border controls for more than two years, has decided to end all hotel quarantine requirements for international arrivals. For all these countries or territories, the pivot to a lighter, more flexible approach has been driven by the growing recognition that COVID-19 is now a manageable endemic disease and that harsh population-level containment has come at a very high price.

Amid this rapid normalization, however, China has instead doubled down on its all-encompassing zero COVID strategy. In contrast to almost every other country in the world, China continues to pursue stringent border controls, aggressive isolation of close contacts, sudden closures of airports and public spaces, and snap lockdowns of neighborhoods and even entire municipalities. Having staked enormous political capital on zero COVID, China’s leadership is loath to change course—particularly on the eve of the all-important 20th National Congress of the Chinese Communist Party this month, where President Xi Jinping is set to have his 10-year rule extended. In city after city, officials are pursuing excessively harsh measures to avoid any outbreaks that might embarrass the government.

Officials are maintaining COVID-19 restrictions in parts of Shenzhen, Guangdong Province, as of October 3.

Beijing’s intransigence has come at an escalating cost. Prolonged lockdowns of millions of people in major cities such as Shanghai have devastated China’s economy—which is now expected to fall short of growth targets significantly—and provoked rising social discontent. The Chinese government’s failures to implement more effective health policies, such as authorizing mRNA vaccines and prioritizing the elderly in its vaccination campaign, have meant that the population remains needlessly vulnerable to future outbreaks. So the government faces a growing dilemma. On the one hand, its zero-COVID strategy is sufficiently unpopular that few government officials are prepared to endorse its long-term existence publicly, and international pressure to abandon the policy is mounting. On the other hand, political considerations and the lack of a clear alternative have prevented Beijing from moving away from it.

Beijing’s stubbornness is puzzling. Rather than reaffirming an increasingly untenable policy, the Party Congress presents China with a crucial opportunity to rein in its excesses. Once the congress has taken place, and political optics are no longer directly in play, Beijing could begin to change its narrative about COVID-19 and choose science over politics. Making effective vaccines and treatments more widely available could bring its anti-COVID policies in line with its Asian neighbors and help the population resume an everyday social and economic life. At the same time, if under less pressure to impress higher-ups, local officials would no longer have to rely on needlessly aggressive lockdowns and other interventions at the expense of economic growth and fundamental social freedoms. If China’s leaders fail to change their approach, it may not only leave the country exposed to an unending cycle of outbreaks and lockdowns; but also threaten it's long-term social, economic, and even political stability.

 

Overprotected And Unprotected

Despite growing evidence that zero COVID is doing far more harm than good, the Chinese government has important motives for clinging to it. First and foremost is the potential health crisis that relaxing the approach could entail. After two and a half years of zero-tolerance policies, Beijing has created a situation in which a very high percentage of its population has never been exposed to the virus. According to official figures, China thus far has accumulated 996,000 infections. Even considering the potential problem of underreporting—which is not a significant concern given China’s centralized PCR testing system—this figure shows that only a tiny fraction of its population has been infected and therefore carries some natural immunity. The Chinese Center for Disease Control and Prevention (CDC) has acknowledged “China’s nearly unique situation of having only vaccine-induced immunity.”

But the vaccine picture is equally concerning. Although as of March 2022, nearly 90 percent of the Chinese population had received two doses of China’s non-mRNA vaccines, studies now estimate that about six months after the administration of the second dose, the antibodies triggered by these vaccines drop to a level that is considered low or even undetectable. Because of this immunity gap, Chinese officials fear a policy relaxation could be followed by a surge of COVID-19 cases that would quickly overwhelm the country’s healthcare system. At the extreme, this could lead to large numbers of deaths and consequent societal instability.

Although such a worst-case scenario may be unlikely, it cannot be ruled out because rural healthcare systems remain fragile. China has a relatively large percentage of older adults who are not fully vaccinated. (Perhaps because of the false sense of security that zero-COVID policies have created, the elderly have not been prioritized for vaccines and boosters. Notably, among Chinese who are 60 or older, the two-dose vaccination rate is now 85.6 percent, and the booster rate is just 67.8 percent—both admittedly lower than figures for the same cohort in the United States.)

To understand just how devastating a late-pandemic surge could be for an immunologically naïve population, consider the fate of the Austro-Hungarian Empire at the end of the Spanish flu pandemic. In his 2009 book Contagion and Chaos, the late political scientist Andrew Price-Smith noted that the Austro-Hungarian Empire was largely spared from the initial waves of the “Great Influenza” in the spring and summer of 1918. But it was devastated by the third wave, which appeared in the fall of 1918 and, he argued, helped precipitate the defeat of Germany and Austria in World War I and, ultimately, the empire's collapse. According to Price-Smith, this devastating third wave, coming after a relative dearth of cases in the first two waves, delivered a profound shock to the social and economic system, becoming the proverbial “straw that broke the camel’s back.” Although there are many differences between Austria-Hungary and China today, it is easy to understand the extent to which officials in Beijing may fear the consequences of a sudden unbridled spread of the disease after keeping it at bay for so long.

Second, despite rising discontent, Beijing understands that a significant portion of the public—especially in smaller towns and rural areas—still strongly supports the zero-COVID policies. People do so partly due to relentless state propaganda and lack of access to independent information. For example, the Chinese media frequently contrasts the number of infections and deaths in China with that in the West and contends that China is achieving the best results in balancing economic growth and COVID prevention and control.

But social adaptation has also played a role: many people have come to rely on zero COVID to protect them from the ravages they are told have taken place elsewhere in the world. Indeed, hundreds of millions of elderly Chinese (and their family members) appear to believe that Beijing’s harsh policies have effectively shielded them from the virus—even though many of them are still not fully vaccinated or have failed to obtain booster shots. As a result, if Beijing begins to scale back the policies without being able to guarantee the safety of the elderly, it could risk undermining the support it has so carefully built up over the past two and a half years.

A third reason Beijing is reluctant to abandon zero COVID is that vital interests close to the regime benefit from it. Hundreds of Chinese companies, for example, have reaped enormous profits from providing rapid PCR testing services, which China has implemented on a massive scale. According to one report, in the first half of 2022, China’s top ten testing companies raked in a combined 48.52 billion yuan ($6.8 billion) in revenue, with total net profits of 16.3 billion yuan ($2.3 billion). And China’s political leaders, having put so much political and economic capital into the strategy, have an incentive to stick with it. As Xi told officials in June, “Persistence is victory.”

Policy changes can also provoke a backlash from China’s elite. Consider what happened in Beijing in July 2022 when the city’s health administration attempted to impose a new vaccine mandate. Under its plan, older citizens who live in retirement homes or elder-care facilities would have to be vaccinated, and anyone unvaccinated would be denied access to public facilities such as libraries, museums, and movie theaters. Within hours, however, there was intense pushback on social media—one reason was a lack of confidence in the safety and effectiveness of the Chinese vaccines—and by the next day, the policy was rescinded. The abrupt reversal was likely the result of pressure from retired officials in Beijing, some of whom are vaccine skeptics and who may have used their influence with the top leadership. Indeed, Xi had every reason to avoid friction with party elders on the eve of the Party Congress.

Indeed, a final motive for Beijing’s attachment to zero COVID is the political calendar. Because of the Party Congress, China’s leaders have not attempted to prepare the state bureaucracy or Chinese society for the significant policy pivot that ending the strategy would require. On the contrary, in the run-up to the meeting, Xi has sought to send a clear and consistent message that his current top domestic priority, the fight against COVID-19, has gone according to plan and has been a resounding success. Any effort to rewrite the script might have muddied the waters, creating doubts about China’s policy direction and making a smooth transition less likely. As a result, despite ever-increasing social and economic costs, the regime has done nothing to change the key components of its signature policy initiative. These rationales have raised the stakes on what will happen after the Party Congress is finished.

 

Zero Covid, Zero Growth

Once Xi has been confirmed for a new term in office, his government will finally have to confront its pandemic management problem. For the moment, the regime appears unlikely to change its strategy. This is partly because Xi’s stature is directly and inextricably bound up with the success of the zero-COVID policy. A sudden policy shift is tantamount to admitting failure, which would risk undermining his political authority within the party.

But China’s deteriorating economic outlook may leave Beijing with little choice. Combined with the worst real estate crisis in a generation, zero COVID has inflicted lasting damage on China’s growth model. According to data compiled by Zheng Yuhuang of Tsinghua University, 460,000 Chinese companies went out of business in the first half of 2022, and 3.1 million private businesses closed down, many of which resulted from lockdown restrictions. In the second quarter of 2022, China’s economic growth fell to just 0.4 percent. Major international financial institutions have significantly lowered their growth expectations for China this year.

Even the state-owned Bank of China recently forecasted GDP growth of just 3.5 percent, far below the 5.5 percent target of the government's five-year goal. The economic downturn has also squeezed the finances of local governments. Except for Shanghai, all of China’s 31 provincial regions posted a deficit in the first seven months of 2022, dangerous shortfalls that raise questions about whether zero-Covid programs can continue to be financed. The Bank of China has estimated that routine PCR testing, covering just two-thirds of China’s population, could generate annual expenses of 700 billion yuan (nearly $100 billion).

For now, the Chinese economy stays afloat mainly because of strong export growth, and some parts of the country have been less affected by zero COVID. Despite the draconian measures taken in Shanghai and other cities, the number of jurisdictions disrupted by lockdowns remains relatively small. But this could soon change. External demand for goods from China is in decline, and Chinese companies are already reporting falling orders. At the same time, with minor cases in many parts of the country, an ever-increasing number of areas have been subject to snap lockdowns. Chinese state media reported that in early September, COVID-19 infections were reported in more than 100 cities, “the most extensive resurgence of the virus in the past two years.” Accordingly, China recorded more than 3,500 high- or intermediate-risk areas, the highest number since its risk classification system was launched in February 2020. These outbreaks underscore the diminishing effectiveness of Beijing’s total containment strategy.

If the government persists in shutting down entire urban areas whenever a few cases arise, China’s economic slowdown could become an economic crisis. A great decline in domestic demand is compounded by a significant exodus of foreign capital and near-zero economic growth. China’s stumbling economy has already led to youth unemployment of 20 percent, the highest since the government began to release such data in January 2018, and a potentially significant threat to social stability.  As the government faces these mounting challenges, how can it end zero COVID without undermining its support?

 

Pivot Without Panic

Having held to their strategy for so long, China’s leaders face a hard choice. They know they will need to wind down the policy to put the country on a better economic footing, but they fear it could lead to a larger public health breakdown. However, this dire outcome can be avoided with a well-planned exit strategy. First, the government can prepare the public for a pivot by changing how it talks about the pandemic. China’s leaders would have to tell the truth about the severity of the virus and the treatments available for it and allow the media to encourage coexistence with COVID-19. This transition could be made more accessible if the World Health Organization announces that it no longer considers the disease a “public health emergency of international concern.” By recognizing that the acute phase of the pandemic is over, such a declaration would offer Beijing a whole scientific rationale for shifting its approach.

To prevent the Chinese healthcare system from being overwhelmed, the government can and should enforce triage measures that have worked in many other countries. These include ensuring that only the most severe cases are treated in hospitals. In contrast, people with minor or asymptomatic cases recover at home or, if conditions do not allow that, in makeshift quarantine centers. The government should also phase out its COVID-19 health QR code, used to demonstrate a person’s risk of infection in real-time. This would entail abolishing the centralized, state-controlled mass PCR testing and encouraging the use of at-home rapid-test kits.

To minimize fear and panic whenever there is a spike in cases, the government could stop providing daily updates on the number of new infections and deaths. In addition, rather than spending billions of dollars enforcing its zero-COVID policies, Beijing should increase access to more effective Omicron-specific vaccines and treatments. A nationwide vaccination campaign should be introduced as soon as possible to ensure that more than 90 percent of the people over 65 and most of the country’s population receive an mRNA booster shot. (As the October 16 opening of the Party Congress draws near, the government has begun to show signs that it is taking the vaccination problem more seriously: In early October, China CDC Weekly published an article calling for the immediate vaccination of the remaining 10 percent of the population.)                                

With such measures in place, a relaxation of policy by the Chinese government would lead to a significant increase in Covid cases. But a well-designed exit strategy can prevent the viral wave from leading to a mass die-off. Assuming 10 percent of the population is infected in a short period, with a 0.1 percent case fatality ratio, about 140,000 people, most elderly people with a chronic condition, might succumb to Covid. That would be less than twice the annual deaths from seasonal influenza, and China’s healthcare system would be able to withstand the outbreak. The economy would be able to get back on track, and Chinese people would learn to coexist with the virus, like their counterparts in the rest of the world.

But a successful U-turn on zero COVID is out of the question until the top leadership stops portraying the virus as an existential threat. Although Chinese leaders themselves have been vaccinated, they have until now only received China’s ineffective home-grown vaccines. So far, there has been no indication that Xi has changed his mind about the need for mRNA vaccines, given the dangers posed by the Omicron variant. And yet he seems convinced of the virus’s severity: he was perhaps the only foreign leader to send formal sympathy messages to U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida over the summer when each of them had mild cases of COVID-19. In mid-September, citing concerns about the pandemic, Xi skipped a dinner with 11 heads of state at a summit of the Shanghai Cooperation Organization, the economic and security organization of Asian states that China took the lead in founding in 2001.

The 20th Party Congress may place Xi in a more secure position to pursue his favored policy agenda, but it will not make COVID-19 magically go away. Without a deliberate change, China may soon be contending with a policy whose consequences may be as far-reaching—for Beijing and the Chinese people—as the pandemic itself.

 

 

For updates click hompage here