China’s zero-Covid policy is wrecking our economies

No one doubts any longer that the COVID virus originated in China; what remains to be established with certainty is whether or not it escaped from a laboratory due to a security breach. But China and its policy of keeping at bay a virus that we in the West have become accustomed to living with is laying bare all our shortcomings. Under the guise of globalisation, we have allowed China to become our factory. Obviously, it was profitable for us to have the Chinese manufacture those goods with lower added value, but the fact is we have now left them with both those and the others, so the constant paralysis of their factories is devastating us. And what appeared to be a miscalculation on the part of the Chinese leadership has turned out to be a fully-fledged strategy. No one outside China understands this policy, but we must get used to living with it and its consequences.

By Miguel Ángel Temprano

1 September 2022 Reading time: 2.50 mins

The pandemic – or rather, the lockdowns – have left our economies in tatters, with runaway inflation resulting from the disruption to deliveries from China. The Russian invasion of Ukraine merely exacerbated – and in what a way! – the problem we were already facing.

Meanwhile, China – which is undoubtedly to blame, whether by action or omission, for the pandemic we are still living through – is taking measures that, to say the least, defy our common sense.

After all this time, it’s time to ask ourselves – seriously – what’s behind all this?

We watched in disbelief as a city of 14 million people – more than the populations of Madrid and Barcelona combined – was placed under lockdown: Wuhan, a city which, despite its size, most of us had never heard of until then. We watched on the telly as patients who did not want to be hospitalised were forcibly removed from their homes, or as they collected food using a bucket and a rope from their balconies. It was all incomprehensible from our Western perspective. But whilst we were watching this on the telly, most of our health authorities were as clueless as a cow watching a train go by. And, of course, what happened, happened.

“We went from watching on our tellys as the Chinese took to the streets to seeing them locked down again at the drop of a hat”

Whilst in lockdown, we listened to the same news programme every day – the only difference being the daily death toll – whilst the television showed us how the Chinese were carrying on with their normal lives, which led us to mistakenly believe that the virus would definitely be eradicated. And once again, it was our health and political authorities who led us into an error that any student of a healthcare degree knows is impossible, since the only virus ever ‘eradicated’ in the history of humankind has been human smallpox.

And, of course, the usual thing happened. The Chinese started seeing new outbreaks, despite the strict controls on entry into their country.

“The only virus that has been eradicated from the planet – or so we believe – is human smallpox; trying to do the same with COVID is mission impossible”

And this is where the inexplicable begins. The Chinese have reported a number of outbreaks in different parts of the country, but their desire to maintain control has led them to impose lockdowns on huge cities for long periods, even though there have been very few reported cases.

They have claimed – whether this is true or not – that the CCP (Chinese Communist Party) has announced a ‘COVID-Zero’ health policy. But the Chinese are not fools.

Why pursue such an aggressive health policy if it entails such significant economic problems? A virus that is so extremely contagious, at a time in history characterised by such high levels of human mobility, is impossible to eradicate. Because, even if a global vaccination campaign were possible, it would always be slower than the virus’s ability to mutate. And sooner or later, it would end up adapting to evade the vaccines.

The lockdowns have taken their toll – bringing factories to a standstill – which is undoubtedly a very high price to pay for their economy and, incidentally, for ours too.

Faced with this outrage, I had always thought there must be something behind it, but when, in August, I heard that just a few cases on Hainan Island had forced the island to be shut down, leaving a whole host of holidaymakers stranded there, I realised there was nothing behind it, just a very ill-judged panic.

“They have managed to lock down Hainan Island because of five cases of COVID, leaving thousands of tourists stranded”

I remember when one of the ministers in the current Spanish government came out with the daft idea – and actually said it out loud – that people shouldn’t eat red meat because it kills you; someone replied that it does, but that hunger kills you even faster. Well, it seems to be the same there: they seem prepared to die from not working rather than from COVID.

The Chinese economy is struggling, and we can see this in the second announcement of an interest rate cut. It is true that the rate cut applies to personal loans and is not only symbolic but downright ridiculous; however, the fact that they are doing it is significant. Its growth was barely affected at the start of the pandemic – certainly not to the same extent as in Western economies – but now it is beginning to feel the strain, and the explanation is clear: its ‘zero-COVID’ policy is not only a mistake but also suicidal.

The US CDC, undoubtedly the most reputable public health organisation in the world, has just scaled back its COVID measures. It has abolished the previous quarantine requirements for people who have been exposed, and has reduced the number of mandatory mass testing programmes. Its guidelines are based on the view that high vaccination rates and the virus’s shift towards lower virulence no longer justify the previous measures.

Meanwhile, we are seeing the Chinese impose a lockdown on Hainan Island, which is packed with Chinese tourists who cannot return home unless they test negative five times in a row over a seven-day period.

Like many of my readers, I couldn’t care less about what happens to the Chinese, especially after COVID, but having said that, I’ve decided that perhaps I should care after all, because if they don’t produce anything, neither do we, and I’m no longer quite so indifferent to the idea of us starving to death.

The Chinese economy is suffering – and in what a way! We can see an example of this in a sector which, when simply compared with our own, is quite frightening.

Until very recently, the property sector accounted for 26 per cent of its GDP – in Spain it never exceeded 11 per cent – and it is clearly in crisis.

To put this into perspective, banks have paid out 370,000 million dollars for the purchase of homes which have not only not been handed over, but whose construction has, in many cases, come to a standstill. The danger that this tsunami will spread to the industry – and, of course, to the banking sector – is crystal clear.

“The Chinese property market, which is already in a very precarious state, is the sector hardest hit by this public health policy”

There is no risk of this problem affecting us directly, but it could affect us indirectly, because even if we wanted to change our production model, it would still take us a long time to do so. China is the leading manufacturer in the Western world, so if its industry suffers, this will result in longer delivery times and higher prices.

Just what we need to sort out our situation.