HONG KONG, Nov 28 (Reuters Breakingviews) – Protests across China underscore a rising fear among people that President Xi Jinping’s stringent pandemic restrictions may be here to stay. Unfortunately, two squandered years to vaccinate vulnerable groups and bolster hospital resources validate those anxieties.
Since the start of the pandemic, infections and deaths in the People’s Republic have been kept at less than one per one million people, earning Beijing precious political capital despite the enormous social and economic costs. Still, new daily cases hit over 40,000 on Nov. 27. Cities accounting for 65% of the country’s GDP are under some sort of lockdown as of Friday, per Goldman Sachs analysts.
Any end to the near-daily mandatory Covid tests and strict quarantine rules will be bumpy due to a huge unvaccinated population. As of November, about 27 million citizens aged 60 and above have not been jabbed against Covid, Breakingviews calculated from official data, and another 36 million elderly people have yet to receive their second dose. One May study by Chinese researchers projected an uncontrolled Omicron spread would result in a death rate of 1.1 per 1,000 people over a six-month period, nearly double the rate in the United States from December 2021 to April 2022. The same study found that demand for intensive care unit beds in the above scenario would be a whopping 15.6 times China’s existing capacity.
The shortfall is in part because a significant chunk of fiscal resources has gone into measures such as purchasing vast amounts of tests, rather than upgrading healthcare infrastructure. National government medical and healthcare spending jumped 22% in the first 10 months of this year from the same period in 2019, to 1.75 trillion yuan ($243 billion). Nomura estimates China could be spending up to 2.3% of GDP on testing alone if 90% of Chinese people are required to test every two days.
Building and maintaining quarantine facilities will need financing too: in one case, a city in the eastern Shandong province has proposed a bond issuance dedicated to the cause, predicting China’s Covid outbreaks will last for at least another five years, per Chinese media.
While many countries around the world are short on healthcare capacity, Beijing’s policy position until now means it has more to lose politically from deaths than other governments that have endured the pain of reopening. That narrows China’s options.
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CONTEXT NEWS
Hundreds of demonstrators in Shanghai shouted and jostled with police on Nov. 27 as protests over China’s stringent Covid-19 restrictions flared for a third day following a deadly apartment fire in Xinjiang, Reuters reported. The wave of civil disobedience has spread to other cities including Beijing.
Officials in Urumqi, the capital of China’s Xinjiang Uyghur Autonomous Region, held a news conference in the early hours of Nov. 26 to deny Covid-19 measures had hampered escape and rescue of residents in a fire that killed at least 10. Many of Urumqi’s 4 million residents have been under some of the country’s longest lockdowns, barred from leaving their homes for as long as 100 days, the Reuters report said.
Editing by Robyn Mak and Katrina Hamlin
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