Nearly three years into the epidemic, China is keeping to a tight COVID-19 containment approach, perhaps disappointing investors hoping for a rapid reopening, though authorities are making continuing, albeit minor, changes to manage the virus.
According to numerous analysts and experts, China is unlikely to begin significant softening of its outlier zero-COVID stance, which is pinching the economy and fueling public dissatisfaction, before the annual parliamentary session in March – at the very least.
Authorities are implementing improvements like more precisely targeting lockdowns, distributing new vaccines, and increasing overseas flights. However, they have not taken steps, such as launching a massive new vaccination campaign or preparing the public for the likelihood of an outbreak, that would allow for a major relaxation of prohibitions.
Last week, Chinese equities rose 5.3%, the most in more than two years, as investors injected a trillion dollars into the market in the hopes of reopening the world’s second-largest economy. On Saturday, though, Chinese health officials reaffirmed their commitment to a “dynamic-clearing” strategy that has been defined as “absolutely correct, as well as the most affordable and effective.”
Daily infections are at a six-month high, although being extremely low by international standards, as officials frequently reaffirm the zero-COVID policy, which President Xi Jinping claims save lives. Since May 26, China hasn’t recorded a COVID death.
China’s biggest issue is to manage the potential consequences of uncontrolled coronavirus spread, even of milder varieties, among its 1.4 billion people, including hundreds of millions of elderly people with no natural immunity.
According to Julian Evans-Pritchard, senior China economist at Capital Economics, a shift away from zero-COVID is improbable even in 2023, citing poor elderly immunization rates among other issues. Local officials are keen to avoid total lockdowns like the one that paralyzed Shanghai, China’s financial hub and most populated city, for two months this year.
People in several cities, including Beijing, are subjected to periodic testing and face the constant possibility of being identified as a “contact” in a case or having their mobile phone health app turn “abnormal,” requiring them to stay at home.
Localized lockdowns are widespread, and domestic travel is down significantly compared to last year. On Saturday, health officials chastised certain districts for using “one-size-fits-all” lockdowns, vowing to address the issue. Other adjustments have occurred around the edges, some of which investors have interpreted as reasons for optimism.
The mayor of Zhengzhou also minimized the risks of COVID after a lockout at a massive Foxconn plant that assembles Apple iPhones forced many workers to scale fences in order to avoid being trapped in or contracting the virus.
China recently began distributing what is thought to be the world’s first inhalable COVID vaccine, which could aid in lowering vaccine hesitancy, which is particularly prevalent among older Chinese.
On Friday, German Chancellor Olaf Scholz, on the first post-COVID visit to China by a G7 leader, announced an agreement to allow expatriates in China to use the BioNTech vaccine and urged Beijing to make the shot available to all Chinese nationals.
According to Variflight, daily international flights on Chinese airlines increased 21.9% on average last month compared to September. Despite this, foreign capacity is only 7.3% of what it was in 2019. People familiar with the situation told Reuters on Friday that China may soon reduce COVID quarantine requirements for entering travelers from 10 days to seven or eight days.
According to Bloomberg News, China is seeking to eliminate a system that penalizes airlines for transporting COVID-positive passengers, citing people familiar with the topic. The initiative is an indication that authorities are looking for methods to mitigate the impact of their COVID laws.
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