China counts the cost of its zero-Covid policy
Beijing ought to swallow its pride and approve foreign
mRNA vaccines
THE
EDITORIAL BOARDA
https://www.ft.com/content/61b49ff5-edb6-4d6d-94db-e7b65a065301
Dozens of
cities in China are in full or partial lockdown in response to the spread of
Covid-19 cases, meaning that a population roughly the size of the US has been
stuck at home for several weeks, often with limited access to food and medical
care.
Among those
cities in lockdown, Shanghai has received the most attention. Deservedly so.
Although the city relaxed quarantine rules somewhat this week, about 4.5mn
people remain confined to their homes and roughly 7.9mn are permitted to leave
their homes but must remain within their neighbourhoods.
Food
distribution has broken down in some parts of the city, leaving some residents
to go hungry as piles of rotting produce are left in the street. The anguish of
many people cooped up in their apartments and getting by on scant rations has
been caught in videos shared widely on social media.
But the
crisis in Shanghai and other cities is not only humanitarian. It is most
starkly an economic problem and, to an extent, a political issue too. The IMF
has cut its GDP growth forecast from 4.8 per cent to 4.4 per cent for the full
year — a particularly sharp contraction from the 8.1 per cent posted last year,
hurting both China and the global economy.
The crunch
looks set to be particularly pronounced in April. Ting Lu, China chief
economist at Nomura, predicts that GDP growth in the second quarter of this
year will slump to 1.8 per cent, down from the actual 4.8 per cent seen in the
first quarter.
The reasons
behind the slump reveal deeper faultlines. One source of weakness is the severe
contraction in the country’s huge property market, which has relinquished a
longstanding role as a dynamo for broader prosperity. Enough real estate to
house an estimated 90mn people now stands empty.
Nevertheless,
the biggest drag on GDP growth is political. Beijing is steadfastly sticking to
its zero-Covid policy. The full and partial lockdowns in cities across the
country are playing havoc with demand for housing, durable consumer items and
capital goods as incomes fall and uncertainties rise. The sheer logistical
challenge of getting goods from A to B is acting as a big drag.
As China’s
population of 1.4bn people contends with their third year of Covid, many have
drained their savings to a level at which they are obliged to reduce spending.
All of this
throws an unsparing light on to Beijing’s Covid strategy. National pride has
prevented China from approving foreign mRNA vaccines for use among its people,
leaving them to take the less effective vaccines developed by domestic
companies.
This has
meant that despite an impressive vaccination rate (88 per cent of people have
had two jabs), the elderly in particular are still thought to be at real risk
from coronavirus.
It is true
that Beijing has been urging the development of homegrown mRNA vaccines — two
of which have now entered clinical trials — but China needs to act now with
dispatch. It should swallow its pride and approve mass imports of foreign mRNA
vaccines immediately, thus allowing it to chart a way out of its draconian
zero-Covid policy and relax lockdowns that are imposing an enormous economic
and psychological toll.
The urgency
of this task cannot be underestimated. China’s zero-Covid policy had largely
kept the virus’s spread in check until the highly infectious Omicron variant
emerged. Beijing now has a stark choice: start a mass vaccination programme
using foreign mRNA vaccines or sustain the ruinous economic and social costs of
continued lockdowns.
Sem comentários:
Enviar um comentário