‘We absolutely can’t open’: Unraveling China’s zero-Covid exit plans

In September 2020, President Xi Jinping awarded medals to the heroes of China’s fight against the coronavirus, declaring that the handling of the pandemic had once again proved the superiority of Beijing’s political system.

Just over two years later, and the pandemic is still far from being defeated, China is suffering from record cases and lockdowns, covid-19 policies are in disarray and have no clear way out given the country’s low vaccination rate among the elderly and frailty of healthcare.

With economic and social costs mounting due to conflicting policies, Beijing should set explicit criteria for reopening based on vaccination coverage and the availability of intensive care units to handle an inevitable outflow of cases, said Yu Jie, a senior research fellow at Chatham House, a British think tank.

Ultimately, such conditions need to be put in place, she said, “because it’s no longer just a public health issue, it’s an economic issue.”

Vaccinations against the coronavirus are one of Xi’s main challenges. According to the latest official data, a third of China’s 267 million people over the age of 60 have not received their third vaccine dose. The booster is required to achieve a high level of protection against the Omicron variant.

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A big problem lies in Chinese culture, which is more risk-averse than many other countries when it comes to diseases and vaccines, says Xinran Andy Chen, an analyst with Chinese consulting firm Trivium.

While relatively high hesitation among China’s elderly population predates the pandemic, the problem has been exacerbated by official reports of the dangers of Covid over the past two and a half years.

Despite the communist party’s enormous powers in social control, ordering the elderly to vaccinate is seen as a step too far even for Xi, fearing it would cause “dramatic social resistance”.

“They don’t want to force a vaccine mandate [but] they can’t afford old people to die. That’s why strict Covid controls are still in place,” Chen said.

This month, Xi sought to ease zero-Covid restrictions. The State Council, China’s cabinet, shortened quarantine periods and stopped tracing second-degree close contacts of confirmed positive cases. The measures were also designed to ease pressure on the centralized quarantine system, which now houses more than a million people.

However, Ernan Cui, an analyst with the Beijing research group Gavekal, said the attempt to stabilize the economy had only created “widespread policy uncertainty” and made “the pandemic even more difficult to contain”.

A Beijing-based government adviser close to China’s Center for Disease Control and Prevention said the timing of the “opening up” depended on producing higher-quality vaccines and making them widely available.

He pointed to more than a dozen new vaccines, including six using mRNA technology, in development. However, Beijing cannot tolerate a 0.2 percent death rate for cases like those seen in Taiwan, and officials won’t rule out a return to Shanghai-style citywide lockdowns if outbreaks are deemed uncontrollable.

“There’s no way we can open at the moment,” he said.

Experts believe that the main three-dose Chinese-made vaccines provide a high level of protection against serious illness and death. But they are less effective and fading faster than the mRNA technology developed by BioNTech/Pfizer and Moderna, which are used all over the west. Even in the event of a huge outbreak, the Chinese have not been tested.

Chen, from Trivium, added that the Chinese government believed the benefits of foreign-made vaccines outweighed the political and economic risks.

From Beijing’s point of view, “the cost of losing national pride, the cost of losing market share to a foreign competitor, is far greater than using a marginally better vaccine that is not 100 percent effective in preventing infection.” , he said.

This despite the enormous economic pain. China’s growth has slowed to its lowest level in decades, while youth unemployment has risen to a record 20 percent as brutal lockdowns undermine consumer demand and hamper production.

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As cases rise, there are increasing signs of central intervention in cities across China, signaling a return to mass testing and quarantine.

In one example, following an inspection this week of the southwestern megacity of Chongqing, Vice Premier Sun Chunlan, who is Xi’s top zero-Covid enforcer, ordered officials to eliminate all community transmission within eight days.

That target, a local official said, was “impossible” to meet, meaning the situation threatened to mirror events in Shanghai this spring, when an initial two-day lockdown lasted two months.

Another challenge for China to change course on zero-Covid would be the government narrative. Authorities need another message to convince an anxious public that it is possible to live with the virus.

Hu Xijin, a former editor of the Global Times, a nationalist newspaper, told the Financial Times that ordinary Chinese people were “deeply concerned” about the risks of infection, especially the dangers to children and the elderly, as well as the threat of quarantine.

Hu, who is self-quarantine, said state media did not deliberately campaign to highlight the dangers of the virus. “I never received such instructions in my last two years as editor-in-chief,” he said.

However, he said, after seeing the pandemic’s handling in the US and much of the west — and the high death toll — many Chinese felt a strong “sense of pride” in the country’s zero-Covid response.

Liqian Ren, who manages Chinese investments at US-based WisdomTree Asset Management, believes the abandonment of zero-Covid must be preceded by a sharp shift in domestic coverage from the very top: Xi himself.

“The propaganda machine has to change, to say ‘this is not a scary disease’, to say ‘we have hospitals’ and ‘this is the party’s success’,” she said.

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To highlight the shortcomings of China’s health care system, the Asian Development Bank last month approved a $300 million loan to improve public health care in two of China’s poorer regions. The experts noted that the pandemic had exposed “gaps” in the state-funded health system and showed that China’s hospitals were “particularly vulnerable to spikes in admissions.”

Ben Cowling, a professor of epidemiology at the University of Hong Kong, said China’s healthcare system risks being overwhelmed like Hong Kong’s earlier this year if it did not follow Singapore in preparing for an exit. That would involve radically changing the zero-Covid rules so that only serious cases are hospitalized.

“In Hong Kong, there was no concrete departure plan; even early March 2022 [at the height of a big outbreak]“There was still isolation of very mild cases in the hospital and isolation facilities, when resources should have been saved for the more serious ones,” he said. “The preparation makes a big difference.”

Others are less pessimistic. Ryan Manuel, general manager of Bilby, a consultancy that analyzes Chinese government documents, said Beijing had indicated it would eventually begin a phased reopening based on the ability to parachute in medical support teams from around the country.

While this meant any reopening would be “piecemeal,” it also meant “there won’t be a wholesaler that ‘lets go’,” Manuel said.

Additional reporting by Maiqi Ding in Beijing and Eleanor Olcott in Hong Kong

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