Commentary on Political Economy

Tuesday, 1 February 2022

 Closed China: why Xi Jinping is sticking with his zero-Covid policy

Some of the strict measures for controlling the spread of the virus could extend beyond Omicron and the Olympics


February 1, 2022 5:00 am by Edward White in Seoul and Eleanor Olcott in London

Before the era of coronavirus, China’s lunar new year holiday was the biggest annual movement of people on earth as many of the country’s nearly 300mn migrants made an annual trip back home.

This year, the massed ranks of travellers have faced an unusual risk: the possibility that they might not be allowed to return to the cities where they work.

Desperate to stem the spread of the highly infectious Covid-19 Omicron variant, the Chinese authorities in some regions urged people against travel between provinces after a series of localised lockdowns.

Despite the state’s warnings and the threat of not being able to come back, Zhu, a delivery driver in Shanghai in his 20s, is one of those risking the trip after another year separated from his family — in his case, a nearly 500km trip to Anhui: “I have to go back,” he says.

Another migrant worker in Beijing, who did not give his name, was equally adamant he would make a similarly long journey to Shanxi: “After all, your wife and children are at home, so at least you need to visit your family once a year. Right?”

Just as China welcomes athletes from around the world for the Winter Olympics, which begin on Friday, Beijing appears to be doubling down on its zero-Covid approach. The playbook involves tightly sealed borders, as well as swiftly implementing citywide lockdowns, mass testing and fastidious tech-based contact tracing every time an infection is confirmed.

The emergence of the Omicron variant in the run-up to the holiday period has prompted calls from officials around the country for people to forgo the rare annual opportunity to see their families. As an incentive, local authorities have been instructed to provide economic assistance for people who choose not to travel home during the holidays.

A photo of officials in personal protective equipment waiting to validate Olympic accreditation at Beijing airport

As China welcomes athletes from around the world for the Winter Olympics, Beijing appears to be doubling down on its zero-Covid approach © Carl Court/Getty

Public health experts warn that the approach is necessary because of the realities of China’s healthcare system: a patchy network of poorly-resourced hospitals and a huge elderly population at a higher risk of severe illness, as well as comparatively low efficacy of its domestically-produced vaccines.

“They are terrified by what happened in Wuhan and are really scared that it might happen again,” says Jin Dong-yan, a virologist with the University of Hong Kong, referring to the overwhelmed hospitals when the first coronavirus outbreak exploded in the central Chinese city in early 2020.

But there are also growing indications that some of the measures will outlive the Omicron outbreak. Some China analysts believe they have been embraced not just because of their impact on public health but also because they reinforce the power of the Communist party over society.

Stability is critical in the short-term as Xi Jinping showcases China’s capital and its snow-capped environs at the Olympics. But it is also vital as the 68-year-old president orchestrates sweeping business and cultural reforms ahead of a precedent-shattering bid for a third five-year term in power at the Chinese Communist party congress in the autumn.

Diana Fu, an expert on China’s domestic politics with the Brookings Institution, says that for China, the health crisis is fundamentally a political crisis, testing the legitimacy and capacity of the one-party state.

“The Xi administration pursued a zero-Covid policy early on in the pandemic and has hung its hat on achieving this goal at all costs,” she says. “The ultimate aim of all of these policies always comes down to this: minimise social chaos, secure the legitimacy of the CCP.”

A photo of Bijie station in Guizhou Province being disinfected 

Desperate to stem the spread of the highly infectious Covid-19 Omicron variant, the Chinese authorities in some regions have urged people not to travel between provinces © Luo Dafu/Future Publishing/Getty

China has had strict border controls since the pandemic began. With fewer visas available for businesspeople and their families, and up to three-week quarantines for people entering the country, there has already been an exodus of expats.

Virus testing and identification checks are required for all domestic travel, which, coupled with localised lockdowns whenever cases appear, increases the risk of people being stranded for weeks at a time, either at home or in designated hotels and facilities. Since December, three cities with a population of more than 20mn have been forced into full lockdown, with residents often restricted to their apartments for weeks at a time.

Beijing has also ordered city governments to rapidly build new state-run quarantine facilities across the country, preparations some experts view as a signal of even tougher controls in the future.

“China appears to have no plans to open up, and continues to be closed until further notice,” says Simon Powell, who leads research in Hong Kong at Jefferies, the investment bank. “The big debate is: is it for epidemiological reasons, or are they basically shutting the border?”

Home-made vaccines offer no silver bullet

China’s renewed commitment to the zero-Covid policy is partly a reflection of its vaccine programme, which in many countries has been the key to exiting pandemic controls.

Its development and delivery of the Sinopharm and Sinovac vaccines was an early success story. It rolled out the first wave of vaccinations at breakneck speed, at its peak jabbing more than 22mn people a day. Domestically, 3bn vaccine doses have been administered to the country’s 1.4bn people. China has sent around 1.6bn vaccine doses to developing countries, making it the world’s single largest exporter of jabs. Chinese health officials and experts believe they have prevented at least 200mn infections and 3mn deaths.

However, there are clear signs that the domestic jabs, which use traditional inactivated vaccines — where the pathogen is killed or modified so it cannot replicate — produce weaker immune responses to the Covid-19 virus than the newer messenger RNA used in Moderna and BioNTech/Pfizer jabs and the viral-vector technology in Johnson & Johnson and AstraZeneca. Over the past 12 months, the spread of the highly infectious Delta and Omicron variants has put the spotlight on fading efficacy of these vaccines.

Following the publication of a University of Hong Kong study in December which found three Sinovac jabs produced a poor antibody response to Omicron, the city’s government advised citizens who had received the Chinese vaccine in the first two rounds to have a third dose of the BioNTech/Pfizer jab.

“Everyone needs a booster to tackle Omicron, but for those that have had Sinovac first, it’s better to have an mRNA one,” says HKU virologist Malik Peiris, who led the study.

Yet whether China will adopt the newer technology remains unclear, clouding one possible path to at least soften the zero-Covid policy.

In November, regulators in Beijing approved the mixing of jabs for booster shots, but they have yet to approve the BioNTech mRNA vaccine — that is despite the German company that developed the vaccine having entered into a partnership with China’s Fosun Pharma.

“It is very strange that China has not approved the BioNTech vaccine,” says HKU’s Jin, noting that regulators are probably waiting for a domestic company to deliver an mRNA jab so that China is not reliant on imported vaccines.

The Chinese biotech company Suzhou Abogen Biosciences is developing a homegrown mRNA vaccine currently being tested in human trials. Analysts expect that, if it yields positive results, Abogen’s decision to partner with a Chinese military medical institute to develop the jab will ease its path towards regulatory approval.

But Ben Cowling, a professor of epidemiology at the University of Hong Kong, warns that success is not guaranteed: “In theory, it is possible for a Chinese company to develop an mRNA jab, but it took Moderna and BioNTech years to fine-tune this technology.” He says that “other companies have failed”, pointing to the German pharmaceutical company CureVac, which was forced to drop its mRNA candidate after human trials yielded poor results.

Yet, according to health experts, given that none of the existing vaccines prevent all infections, the introduction of more effective jabs will not provide a silver bullet for Beijing to replace lockdown measures if zero-Covid remains the goal.

“There is no off-ramp for China’s zero-Covid policy with the current vaccines,” says Calvin Ho, a bioethicist at the University of Hong Kong.

Healthcare system realities

While China’s search for new vaccine technology continues, policymakers remain deeply cautious about permitting community spread.

To justify the harsh zero-Covid controls, leaders point to an influential study from the Chinese Center for Disease Control and Prevention, published in November, which warned that if the country followed the opening up strategies taken by countries such as the UK and the US, it would cause hundreds of thousands of cases a day, of which more than 10,000 would present severe symptoms if there was a sizeable community outbreak.

“We are not ready to embrace ‘open-up’ strategies resting solely on the hypothesis of herd immunity induced by vaccination advocated by certain western countries,” the authors wrote.

China’s healthcare expenditure as a percentage of GDP is about 5 per cent, compared with double-digit rates of spending in the UK, the US and Japan. The country has about 20 doctors per 10,000 people, more than double India, but below the OECD average of 34 and more than 50 in the UK.

While there are more hospital beds per capita in China than in the US and the UK, the number of intensive care beds available — crucial to keep Covid-19-infected patients alive — is a quarter of the OECD average. Resources are especially thin outside of the big cities; rural areas have half the doctors and beds on a per capita basis of urban areas.

Powell, of Jefferies in Hong Kong, says it is important to remember that the healthcare system “barely survived the first wave” in 2020. “They genuinely do have a big healthcare risk problem where they could have an overwhelmed healthcare system.”

A photo of a man pulling a woman in a hospital bed along the street in Shanghai

While there are more hospital beds per capita in China than the US and the UK, the number of intensive care beds available is a quarter of the OECD average © Alex Plavevski/EPA-EFE/Shutterstock

This anxiety has underpinned Beijing’s preference for the zero-Covid playbook.

In January, Chinese authorities lifted a month-long lockdown in Xi’an, a northern city of 13mn, having suppressed a wave that peaked at about 2,000 total cases. Mass testing campaigns in Beijing and Tianjin, a city of 14mn, were deployed, while the national new infection tally has fallen back to double digits in recent weeks, from above 200 in late December.

Rather than ease this approach, Yanzhong Huang, a public health policy expert at the Council on Foreign Relations in New York, says the arrival of Omicron may cause officials to be even more severe in rural areas where about a third of the population lives.

“In those localities where the [health system] capacity is not that strong, they are more likely to turn to heavy-handed, sometimes unnecessary measures, in order to get things done — or to show they are getting things done,” says Huang. “I won’t be surprised if they introduce more stringent, draconian measures.”


But economists do not view China’s refusal to reopen to the outside as immediately damaging to its economic growth. While there are patches of weakness in domestic consumption, retail sales and exports have mostly recovered from the nadir of the early months of the pandemic.

Before the pandemic, Chinese people made more than 170mn outbound trips annually, with tourists spending $254bn abroad each year. The local reallocation of some of that spending has buoyed domestic demand. But the change also plays into Xi’s aims of boosting China’s self-reliance in the face of an increasingly hostile foreign policy landscape, a plan which gained impetus after the Trump-era US-China trade war.

Trinh Nguyen, a senior Asia economist at Natixis, says that, while new waves will probably hit domestic consumption and mobility, the country has so far “managed to outperform the rest of the region economically because of its zero-Covid strategy”.

“That success makes the hurdle to reverse course for China higher,” she adds.

Borders set to stay shut as Xi cements rule

Importantly, keeping China closed for longer also supports Xi’s efforts to restructure Chinese society. The CCP is orchestrating far-reaching economic and cultural reforms, in part aimed at extending control over the country’s business and cultural landscape. The so-called common prosperity campaign, now entering its second year, appears to have both ideological and technocratic roots and has been executed via an onslaught of market-rattling crackdowns.

A photo of Chinese President Xi Jinping visiting a family’s home

Under Xi Jinping, the CCP is orchestrating far-reaching economic and cultural reforms, in part aimed at extending control over the country’s business and cultural landscape © Li Xueren/Xinhua News Agency/eyevine

During this volatile period of political and social upheaval, the new border arrangements might prove “very useful” as a strategy to control unwanted foreign influence, Powell says.

Few complain openly. But there are signs frustration is rising in China. “The economic conditions are terrible . . . some policies are indeed far from rational,” says a jeweller in Ruili, a city in southern China’s Yunnan province near the border with Myanmar which has been cut off from the rest of the country for much of the past two years.

Fu, of Brookings, says people under lockdown will “understandably react differently” and there are signs of popular support for Beijing’s approach.

“The worst sufferers are the precarious workers — the migrants and the poor — who have no work, little food, and cannot go home for Chinese lunar new year,” she says.

“But for those who are not under lockdown, the vast majority likely will continue to favour a draconian approach to virus control. This is because of the deeply ingrained belief that individual liberties must be sacrificed for the collective good, lest chaos reigns.”


Zero-Covid policies threaten Hong Kong’s place in the world

Some Chinese experts believe Beijing’s media messaging and propaganda efforts have left it with no easy way to end the zero-Covid policy. However, Steve Tsang, director of the China Institute at Soas in London, says Beijing “could change the narrative” by spreading a new message through state media organs that “they conquered the virus and beat it up with Chinese vaccines and that it is no longer lethal”.

Others say that Beijing’s propaganda, surveillance and censorship machines have benefited from the pandemic. And for Xi, the state’s ability to limit dissent is essential this year as he seeks to extend his leadership at a twice-a-decade party congress in November, laying the ground for years more of unchallenged rule.

Xiao Qiang, an expert on China’s censorship and propaganda apparatus at the University of California, Berkeley, says debate on public health issues — including whether China-made vaccines work — is now suppressed as brutally as political dissent. He says there is little indication that the new layer of tech-based mass tracking introduced with the pandemic will be unwound when the health crisis subsides.

“There is no question, no discussion, no nothing,” says Xiao. “Voices have been crushed. The public channels are shrinking.”

But even if there is little space for dissent, the state’s heavy-handed controls make it more likely that those worst affected — including the migrant workers who form the backbone of the Chinese economy — begin to question the wisdom of those making decisions.

“This rigidness at the top — you could call that effectiveness of the autocratic system — is becoming the weakness of the autocratic system,” Xiao says.

Additional reporting by Maiqi Ding in Beijing and Wang Xueqiao in Shanghai

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