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Here’s everything you need to know from what’s changing to why it’s so hard to scrap

President Xi Jinping’s insistence on adhering to a so-called Covid Zero policy isolated China as other countries that suffered far-worse outbreaks returned to a semblance of pre-pandemic life. But three years after the first documented case, the country has given a series of signals that suggest it’s ready to loosen the stringent regime, which has undoubtedly saved lives but also weighed heavily on the economy and fueled protests in several major cities.

While the central leadership has remained characteristically opaque on its intentions, a 20-point playbook published in November sought to make controls more targeted, and cities have reined in the most onerous measures like blanket test requirements.

Still, it’ll be a long process before life in China draws closer to the rest of the world, not to mention reverts to pre-pandemic norms.

1. What does Covid Zero mean? 

When SARS-CoV-2, the virus that causes Covid-19, first emerged in late 2019 in the central city of Wuhan, the Chinese government viewed it as a public health threat that must be eliminated at all costs. That’s why authorities long required isolation for patients and their close contacts, as well as quarantine for anyone arriving from abroad. Any outbreak domestically is met with a barrage of targeted testing, contact tracing and quarantines to try to nip it in the bud, with citywide lockdowns as a last resort. That approach, which has become known as “dynamic clearing” or dynamic Covid Zero, acknowledges that infections occur but aims to stop onward transmission. More infectious variants have made it more difficult for China. In early April the daily case count topped 20,000 — surpassing the opening days of the pandemic in China, when testing wasn’t readily available — before falling back. Late in the year, another outbreak saw daily counts peak near 40,000.

2. What’s changing?

Three years on, despite the surge in cases, there’s been a flurry of developments that signal a possible pivot: 

  • China’s Covid czar, Vice Premier Sun Chunlan, said on Nov. 30 that the country’s efforts to combat the virus are entering a new phase, with the omicron variant weakening and more Chinese getting vaccinated. Xi was said to have made similar comments about omicron being less lethal during a meeting with a European official.
  • Days later, officials in major cities started dropping testing requirements to enter such public venues as parks, supermarkets and public transportation, though some, such as Shanghai, kept them for restaurants, bars and nursing homes.
  • Authorities have been playing down the severity of infections and avoiding mentioning the “dynamic” strategy. The state-backed Global Times tabloid ran an article citing Chinese experts that said people don’t need to panic over the omicron variant, as it’s much less deadly.
  • Other state-backed media, which have spent years scaring people by showcasing the devastation and death toll in Western countries, have started running reassuring stories of Covid survivors.
  • In Beijing, some Covid patients are being allowed to isolate at home — allowing them to avoid the dreaded quarantine camps that some people fear more than catching Covid itself.
  • The government is putting more effort into bolstering vaccination rates among the elderly and raising booster coverage.
  • In a 20-point playbook for officials, China reduced the amount of time travelers and close contacts of virus cases must spend in quarantine, to eight days from 10; cut to one, instead of two, the number of PCR tests required before entering China; and scrapped a system that penalized airlines for bringing virus cases into the country.

The changes were likely accelerated by social unrest in several cities: Thousands of citizens took to the streets in late November to protest frequent lockdowns and disruptions to normal life — a highly unusual occurrence in a country where dissent generally isn’t tolerated. Smaller conflicts, of residents refusing to be locked down or be carted off to the isolation camps, also proliferated.

3. So Covid Zero is over?

Hardly. Millions of people are still subject to a web of restrictions on movement, with a negative PCR test needed for entering restaurants or for domestic travel. An extensive surveillance system with app-based health codes identifies those at high-risk — with authorities alerted immediately. Face masks are required outside the home. International travel is still virtually non-existent for foreigners and onerous for locals. 

4. Why is so hard to scrap Covid Zero?

In China’s calculus, the benefits outweigh the costs. The government estimates the strategy has avoided 1 million deaths and 50 million illnesses. It’s reported fewer than 6,000 deaths from Covid on the mainland, mostly early in the pandemic. That compares to about 1 million in the U.S., which has a population less than a quarter the size. China has used those figures to portray its system of governance as superior. A modeling study by researchers at Shanghai’s Fudan University, published in May in Nature Medicine, offered a glimpse of what could happen if omicron were allowed to spread unchecked: a “tsunami” of infections resulting in 1.6 million deaths. Along with saving lives, Covid Zero also allowed the Chinese economy, the world’s second biggest, to grow while other major economies contracted in 2020. Even though Covid Zero disruptions have weighed on growth this year, Xi has declared it to be the most “economic and effective” policy for China. Switching tactics to let the virus infect a large swath of the population could create bad optics just after he secured a third term at the helm of the Communist Party in October.

5. What’s the domestic impact been? 

As the virus became more contagious, it led to more frequent outbreaks, some of which resulted in hardcore lockdowns, where most people are required to stay home. A handful dragged on for more than a month, such as in Shanghai and the northeastern industrial province of Jilin, leading to economic and social hardship and distress for people with chronic medical conditions. When the western city of Xi’an was locked down, one woman suffered a miscarriage and a heart attack victim died after difficulty accessing emergency care. Toward the end of the year, protests erupted at Apple Inc.’s largest manufacturing site in China, the vast Foxconn Technology Group factory in Zhengzhou, after workers were cooped up for weeks. Despite such incidents, the vastness of the country means that life has gone on as normal for millions of others, which has resulted in some measure of support for the zero-tolerance approach. With such a small share of the population infected so far, fear of the virus is also deeply-rooted — rumors in some unaffected places that Covid Zero would be dismantled have led residents to panic

6. And on China’s economy?

While 2022 got off to a stronger-than-expected start, the outlook was clouded not only by Covid but trouble in the domestic property market and the global repercussions from Russia’s invasion of Ukraine. The disruption and fear of infection have weighed further on the economy. People have avoided travel, shopping and dining out. Even partial lockdowns have snarled industrial supply chains. Government finances have come under severe strain in part because of the extra spending on Covid controls. The budget deficit for all level of governments in the first 10 months of the year was almost triple the amount in the same period last year. Economists have steadily downgraded their growth forecasts to well below the government’s target of around 5.5% — which was already well below last year’s final rate of 8.1%. By midyear Chinese leaders were said to be treating the 5.5% figure as guidance rather than a hard target. The median projection of a Bloomberg survey of economists in December was 3.2% for the full year 2022, down from 3.3% the previous month. The International Monetary Fund cut its global growth outlook for 2022 and 2023, citing in part China’s slowdown.

7. What are the hurdles to getting back to normal?

Here are some big ones: 

  • While nearly 90% of the population has been vaccinated and a growing number received boosters, the rates are lower for the elderly. In China, only 69% of those aged 60 and above and just 40% of over 80-year-olds have had booster shots. In the US, over 70% of those over 65 have received a first booster, while 44% have already received a second.
  • The run on hospitals across the world, both in under-resourced places like India and in the developed world, is a constant reminder about how China’s patchy hospital network could easily crash under a sudden spike in infections.
  • Even if China is able to open as carefully as top performers in the region such as Singapore and South Korea, it’ll still likely face hundreds of thousands of fatalities, if not millions, when the virus eventually runs through its population. Having used the importance of saving lives as justification for the strict approach for three years, Xi’s government might face political backlash as the death toll mounts.

8. What’s the endgame for China?

Despite the recent easing there’s been no semblance of an overall plan to exit Covid Zero, which is worrying for such a vast population. The 20-point plan issued in November updated a playbook from June that sought to standardize policies for controlling the virus that had varied city to city. Such moves, along with the shorter quarantine, make the strategy less disruptive but do not provide a blueprint for living with the virus. Some experts think that China’s exit will inevitably be messy as the virus overwhelms healthcare infrastructure more quickly than anticipated as has happened in many places, notably Hong Kong in early 2022. Another possibility is a new variant may emerge that’s mild enough for the government to relent without harming the population, though there’s probably not enough time for officials to wait for that now, given the momentum that’s building for reopening. In any case, China is navigating an unprecedented situation and the repercussions from its journey will be felt across the global economy.

9. What about Hong Kong?

The semi-autonomous city had long prioritized aligning its policy with the mainland in an effort to reopen the border. Successive outbreaks on both sides have kept that from happening. In September, city leader John Lee, who took office in June, scrapped all hotel quarantine for people coming to Hong Kong and said they would no longer have to take a PCR test before arriving. The city has tolerated thousands of daily community infections since then and recently returned to hosting international events, such as the Rugby Sevens and the Global Financial Leaders’ Investment Summit. Still, Hong Kong has trailed the reopening efforts of all of its major financial hub rivals, including New York, London and Singapore. Masks are still required, even outdoors.

Source : Fortune