CK Tan and Grace Li wrote . . . . . . . . .
As Shanghai’s COVID-19 infections soared last month, a local official explained why shutting the city down was not an option.
“No, Shanghai cannot undergo a full lockdown,” Wu Fan, a member of the city’s COVID expert team, said on March 26. “Why not? Because Shanghai is not only for the locals. It also plays an important role in national economic and social development, and even affects the global economy,” she insisted.
Two days later, the unthinkable became reality for over 25 million residents of the city.
With only hours’ warning, a two-stage lockdown was announced, first for the eastern side of the Huangpu River, followed by the western side. As Shanghai became a ghostly metropolis and hospital staff were enlisted to help conduct mass testing, social media seethed with rumors of people dying from ailments other than COVID-19. Confined residents who had not stockpiled food struggled to find enough to eat.
“It is so uncharacteristic of Shanghai to have to go through this,” said Zhong Lei, a teacher in the city, whose residential compound was locked down even earlier, in mid-March.
While other locations, such as Shenzhen, Tianjin and Jilin, have been hit with tight curbs in recent months, the battle against the virus in Shanghai marks China’s biggest containment effort since it shuttered Wuhan at the start of the pandemic two years ago. Hopes that life in the commercial hub would quickly return to normal dimmed when the authorities extended restrictions on the eastern side that had been due to end last Friday morning.
The next deadline of Tuesday morning brought more disappointment, as officials said the city would continue to implement “seal and control management” without saying when the rules would be lifted.
Even after the restrictions are eased, Shanghai’s ordeal will remain emblematic of the challenges of President Xi Jinping government’s uncompromising “dynamic zero-COVID” policy, which aims to stamp out infections at any cost.
Experts are divided over what those costs are. Some warn of heavy economic losses, while others suggest the strict measures ensure industrial stability, not to mention saving lives. Likewise, there is division over China’s vaccination program. Authorities say nearly 90% of the population of 1.4 billion has been inoculated, a staggering feat by any measure. Yet the rate among the most vulnerable seniors lags behind, and China continues to insist on using homegrown shots despite questions over efficacy.
What seems evident is that there is no clear path for China to join the growing number of countries “living with COVID” anytime soon. That could have a profound impact on the nation’s economy and society, and its interactions with the outside world.
“If we stop all containment measures now, it means all the previous efforts are for nothing,” Liang Wannian, a top official at the National Health Commission, said in late March in response to a reporter’s query on why China is not shifting toward treating COVID as endemic, like influenza.
Officials had at least flirted with a recalibration, trying more targeted restrictions on residential communities where infections were detected and lowering hospitalization criteria for coronavirus patients who recovered. The government also introduced rapid antigen kits for self-testing, aiming to promote early detection.
“The recent fine-tuning is an indication that the country is experimenting with a less costly — and thus more sustainable — zero-COVID approach,” Xu Tianchen, a China economist at The Economist Intelligence Unit, told Nikkei Asia.
But Xi demanded on TV in mid-March that officials “swiftly control local clustered outbreaks.” A lockdown in Shenzhen, meanwhile, appeared to successfully halt COVID’s surge in the city of 17 million. As Shanghai overtook the northeastern cities of Jilin and Changchun as China’s virus hot spot, showing that a targeted approach was not enough to stop the omicron variant, officials reverted to more drastic measures.
On Sunday, Shanghai counted 9,006 mainly asymptomatic infections, more than two-thirds of the national tally. The military has been called in to help with ambitious citywide testing that may or may not paint a more complete picture, amid reports on social media of some people refusing to be tested to avoid being taken away to quarantine centers.
The numbers look tiny given China’s population and the infection figures seen in some countries. They are just a fraction of the daily record of about 58,000 in Hong Kong during that city’s recent crisis. But there are reasons — beyond Liang’s rationale about the struggle being all for naught — why the government is reluctant to change tack.
Chinese health officials, like those elsewhere, have noted that even if omicron is less deadly than the previous delta strain, it spreads much faster. This raises the risk that the health system could be overwhelmed by the sheer volume of cases.
China has sought to reform and build up its health care infrastructure in the past 10 years, but it still faces capacity limitations. The latest available data shows the country had 3.34 registered nurses per 1,000 people, compared to 11.8 in the U.S. China’s health spending per capita was $459 in 2018, while U.S. spending came to $9,054 in 2019.
These numbers, it can be argued, leave little margin for error. The leeway may be narrower still, due to the low vaccination rate among seniors.
As of March 17, Chinese officials said 88% of the population was fully vaccinated, exceeding the 70% threshold advised by the World Health Organization. But for people aged 80 and older, the number stood at 51%. For comparison, Japan’s rate for the same age group at the end of last month was 98.1%.
China did not specifically target seniors when it launched its vaccine campaign in early 2021. Instead, it focused on people aged 18 to 59, due to concerns about a lack of clinical studies for other age groups.
Jin Dong-yan, a professor at the University of Hong Kong’s School of Biomedical Sciences, called it a “particularly big problem” that vulnerable groups were not targeted first. “Later, as we kept calling and persuading them, they improved but are still not doing well enough,” he said, adding that this poses “a very big hidden danger, which can be clearly seen from the lesson from Hong Kong.”
Lagging inoculations of the elderly were seen as a key reason Hong Kong’s COVID-19 death rate led the world during its big outbreak.
One 84-year-old woman in Shandong who has yet to be vaccinated said that community officials asked her to get the shots last winter. “I told them that I’m too old, with high blood pressure,” said the woman, who wanted to be identified only by her surname, Wang. “They didn’t push me.”
Questions also swirl over whether the types of vaccines China has used will be enough to keep omicron in check.
So far, the mainland’s drive has depended on domestically made inactivated virus vaccines like Sinovac Biotech’s CoronaVac. Various studies have shown that these shots are less effective than Western mRNA vaccines such as Pfizer-BioNTech when it comes to preventing cases.
Airfinity, a health data provider in the U.K., estimated in March that due to the lower efficacy of vaccines used in China, less than 30% of the population is protected from infection. “Should infections hit China in the same magnitude as Hong Kong, deaths could exceed 1 million,” the report warned.
Official data out of Hong Kong, where both Chinese and Western shots have been used, shows a disparity between them. The death rate for patients aged 80 and up who had received two doses of Sinovac was 2.95%, based on an analysis by the Hong Kong government. Among those who opted for BioNTech, it was 1.51%. Still, the rate among unvaccinated seniors in that age group was 15%, suggesting any jab was better than nothing.
Experts at Capital Economics cited China’s rising asymptomatic cases as a “good sign.” The “high asymptomatic share also suggests that Chinese vaccines are performing well,” the U.K.-based research firm said in a March 25 report.
HKU’s Jin stressed that Chinese vaccines “are certainly effective and lifesaving.” Even so, he argued that China would be wise to embrace foreign jabs.
“If it’s true, as they say, ‘people’s lives are put first’ and ‘life and health is priceless,’ then they should quickly approve BioNTech. Because this can save lives,” he said. “Foreign vaccines work faster, and the effect of one injection is much better than that of Sinovac. And the booster shot of BioNTech also works better than three shots of Sinovac.”
For now, China looks likely to remain in a cycle of lockdowns, constraining an economy already on a downward trajectory since the second quarter of 2021.
The country incurs a loss of 295 billion yuan ($47 billion) a month, or 3.1% of gross domestic product, due to the strict social mobility curbs, according to a recent estimate by the Chinese University of Hong Kong. It said that “the economic cost of lockdown is clearly bigger than we see in other countries.”
Even before Shanghai’s lockdown, Morgan Stanley had projected the Chinese economy would achieve zero growth in the first quarter of 2022. The forecast was lower than an earlier estimate of 0.6% growth on a quarterly basis. The U.S. investment bank also expects China to miss its annual goal of around 5.5% growth.
“The double lockdowns [in Jilin and Shenzhen] sent a clear message that Beijing is prioritizing COVID-19 containment over the economy, and a recalibration of its COVID-19 strategy will likely be delayed,” Morgan Stanley economists wrote in mid-March.
China’s closed borders, meanwhile, have a detrimental effect on the global economy, Natixis Asia Research said in a note. “Plummeting numbers of physical exchanges between China and the rest of world, including business exchanges, is one of the main reasons why China’s outward foreign direct investment has stalled since the pandemic started,” it said. “This is particularly relevant for emerging economies with large financing needs.”
Natixis also observed “increasingly negative sentiment of Chinese people” toward the rest of the world, as well as an “increasing disconnect” in terms of global awareness of what is happening in China.
The Economist Intelligence Unit’s Xu offered a more nuanced assessment of the government’s thinking, explaining why it may not want to ease up on restrictions the way, say, Southeast Asian countries have.
“Zero-COVID has helped China realize industry-led growth in 2020 and 2021,” Xu said. “Against that backdrop, switching to a ‘living with COVID’ approach now may not necessarily help [the economy], because doing so will risk disrupting China’s industrial production and supply chains as cases explode.”
In legislative sessions last month, government officials advocated stable growth ahead of the ruling Communist Party’s once-in-five-years National Congress this fall, where Xi is expected to secure an unprecedented third term in office.
For the typical citizen, this does not make the rules or apparent lack of an exit strategy easier to swallow. Some economists, including experts at Citi Research, predict the zero-COVID policy is here to stay for at least another year.
Zhong, the Shanghai teacher, lamented, “Officials promised to execute accurate prevention measures based on science, but we feel like we’re back in 2020.”
Source : Nikkei Asia