Investors and businesses can welcome China surprise pivot from years of COVID-19 lockdowns, mass testing and isolation, but one of the country’s top medical advisers warns it will come with a cost: a massive case wave of COVID that occurs while containment measures are lifted.
On Wednesday, Beijing announced several changes to its COVID restrictions. Mild and asymptomatic cases will be allowed to self-isolate at home, rather than being sent to government isolation facilities. Officials no longer need PCR tests and the ubiquitous health code app to enter public places or travel between cities in China. Lockouts can be limited to individual floors or buildings, rather than entire districts.
Feng Zijian, former deputy head of China’s Centers for Disease Control and Prevention and one of the key medical advisors in Beijing, predicted on Tuesday that 60% of China may have been infected with COVID in an initial surge of cases as China eases its policies.
By the time the disease swept through the population, as much as 90% of China was infected, he continued.
In comparison, the US Centers for Disease Control and Prevention estimated in April that 60% of Americans have contracted COVID-19, up from 34% last December.
“It is inevitable that most of us will get infected once, regardless of the adjustment of measures to fight against COVID,” Feng said on Tuesday.
How bad is the COVID wave in China?
An “inevitable” surge in COVID cases will complicate China’s path from COVID-zero. Beijing has avoided many of the epidemics that almost every other country has seen with difficulty—and not popular—policy of lockdowns, mass testing, and border controls.
However experts note that China’s containment of COVID means that the Chinese population lacks the immunity found in other countries, which could allow the disease to spread quickly once the measures are lifted.
China could face “millions of daily new cases within a few months, which could be orders of magnitude more than the highest number the country has witnessed so far,” Warned Goldman Sachs in a research note on Sunday, before China announced its new rules.
China’s low vaccination rate among the elderly could also make an outbreak more deadly. only 40% those over 80 received a third dose of the vaccine.
China has promised to vaccinate more of its elderly population, but it is not fast enough. “If they really move fast,” China could vaccinate 70% of its 80-plus population by the end of the year, but “a lot of people will probably die,” said Alicia Garcia-Herrero, chief economist at investment bank Natixis, just spoke. luck.
One model predicts that China could report up to 20,000 people die from COVID every day if it is reopened in its current course.
An uncontrolled outbreak could also create new variants of COVID, Anthony Fauci, the White House’s chief medical adviser, warned on Wednesday.
Why is China reopening now?
But Beijing probably can’t afford to delay the reopening, as China’s economy buckles under the weight of snap lockdowns and travel restrictions. The country’s economy is expected to miss Beijing’s 2022 GDP growth target of 5.5%: a Bloomberg poll of economists gave a consensus estimate of only 3.2% GDP growth for the year.
November’s record toleration of COVID further dragged down the economy, as officials rushed to impose lockdowns in a bid to control cases. Exports to China fell 8.7% year-on-year in November, his highest decline in more than two years and worse than analyst expectations of a 3.5% drop.
The devastation of COVID has scared away foreign companies that rely on the country for manufacturing. After a COVID outbreak in the manufacturing hub of Zhengzhou, the “iPhone City,” in China. Apple now reportedly considering using factories in other countries such as India and Vietnam.
“China cannot afford to lose the jobs offered by foreign companies,” Garcia-Herrero previously said luck.
Protests in Chinese cities such as Beijing, Shanghai, and Guangzhou over the weekend of November 26 likely also accelerated the government’s decision to ease the measures.
but economists warn that even an earlier-than-expected opening would not spark an immediate economic boom. A widespread epidemic, even without many deaths, would disrupt China’s economy as workers affected by COVID stay at home.
“Many people will get sick, which could result in factory closures or facilities not running at full capacity,” Zhang Zhiwei, chief economist at Pinpoint Asset Management, told the South China Morning Post on Monday.
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