Over the past two years, China’s zero-tolerance policy of lockdowns, mass testing, and strict border quarantines for Covid-19 has prevented a huge number of deaths at home and ensured that everything from iPhones and Teslas to fertilizer and car parts continued to flow to the rest of the world.
If consumers and businesses want to continue to buy goods made in China without having to endure shortages and further price hikes, they should want China to stick with its “Covid-zero” policy, as Chinese President Xi Jinping does.
Yet that’s not the message you hear outside of China. Criticism of Beijing’s determination to squash every outbreak is increasing—criticism that emphasizes the damage to China’s economy, the risks posed to global supply chains, and even the threat to Olympic athletes’ human rights.
Gita Gopinath, a senior official at the International Monetary Fund, told media last month that authorities need to “recalibrate” their response to Covid outbreaks, warning the disruptions caused by more lockdowns could have “very important consequences for global supply chains.” A Goldman Sachs report from January posited that if multiple provinces were hit with the omicron variant this winter and the government imposed a national lockdown, growth in China could plunge to 1.5% this year, the lowest since 1976.
Those concerns are real. There are serious economic, fiscal, and human costs from the attempt to halt the spread of Covid-19 within China, and these could get worse if outbreaks continue to spread.
This story is from the February 14, 2022 edition of Bloomberg Businessweek.
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This story is from the February 14, 2022 edition of Bloomberg Businessweek.
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