IMF unhappy as China sticks to zero-Covid policy| MENAFN.COM

Monday, 16 May 2022 01:52 GMT

IMF unhappy as China sticks to zero-Covid policy


(MENAFN- Asia Times)

The marshals of global capital may not like it, but China's zero-Covid strategy is here to stay. 

The outbreaks in Xian , Henan and Tianjin have been brought under control only weeks after critics of the strategy warned that the Omicron variant would mark the death of the policy of defeating the virus completely.

All high- and medium-risk areas in Xian, capital of Shaanxi province and home to the worst outbreak in the country since Wuhan at the beginning of 2020, have been downgraded to low-risk. Everyone in the city is now able to travel freely .

The outbreak in Beijing is still causing problems, with authorities reporting 75 domestic cases since January 15. But with the Winter Olympics fast approaching, you can bet your house that everything is being done to eradicate the virus before the grand opening on February 4. The Chinese capital has been hit with both the Delta and Omicron variants, but officials say the spread of the latter is already under control.

If the highly contagious Omicron variant is the toughest test yet for China's zero-Covid strategy, then local infections falling to a two-month low this week surely demonstrate its success?

If the International Monetary Fund is to be believed, nothing could be further from the truth.

Speaking at the World Economic Forum last week, IMF head Kristalina Georgieva criticized China's zero-Covid strategy, labeling it a“burden” for the rest of the world. She called on Beijing to re-evaluate its use of lockdowns because of their adverse impact on global supply chains.

The IMF is the most high-profile international body to speak out against China's approach to the virus. But among the most important guardians of global capitalism, it does not stand alone. 

Earlier in January, Beijing's commitment to zero-Covid was labeled the biggest global risk of 2022 by the influential financial consultancy firm Eurasia Group. Economists at HSBC, one of the biggest banks in the world, warn that China's strategy threatens the“mother of all supply shocks.” 

Goldman Sachs has issued a stark warning of its own , while the financial press continue to speak out strongly against Beijing's strategy. In recent weeks, the tone has become increasingly shrill in liberal-leaning media outlets, with both The Guardian and New York Times publishing articles over the past few days arguing that zero-Covid is no longer sustainable. 

With the World Health Organization forecasting a possible end to the“acute” phase of the pandemic in 2022, there's a growing chorus of optimism that the worst is finally behind us. And this contributes to a narrative that views Beijing's stringent measures as increasingly outmoded. 

“Its pursuit of zero Covid will prove to be a huge mistake,” write Ezekiel Emanuel, a medical-ethics and health-policy professor at the University of Pennsylvania, and Michael Osterholm, a leading epidemiologist at the University of Minnesota, in The New York Times.“The policy has left it wholly unprepared for what will become endemic.”

So what alternative strategy should Beijing adopt? Emanuel and Osterholm suggest that the Chinese leadership embrace the roadmaps put forward by Denmark, Germany and Australia, where high levels of immunity have been achieved without the horrendous death toll plaguing the US.

This all sounds great. But it fails to take into account what should be a very simple and obvious fact: China is not Denmark, Germany or Australia.

As a developing country, access to quality medical resources remains deeply unequal across China. Public health experts interviewed by Chinese state media this week warn that a shift in strategy risks unleashing disaster.

“In a developing country like China a sudden lifting of strict measures will cause huge pressure on the medical system,” Chen Xi, associate professor of public health at Yale, told Global Times . Zhuang Shilihe, a Guangzhou-based immunologist, agrees.“It's a gamble we cannot afford to lose.”

Even a cursory glance at the unequal nature of Chinese development calls into question the prescriptions of many of its zero-Covid critics. China is wealthier than it has ever been, but many regions remain underdeveloped. 

Yes, Shanghai and Beijing have per capita GDPs that rival those of some richer countries, but the World Bank calculates that overall per capita gross domestic product remains lower than the average for the Asia-Pacific region. As one of its least developed provinces, Gansu is poorer than Botswana, Gabon and many other countries in the global periphery. 

These economic divides are reflected in public health, which as in many other developing countries suffers from chronic levels of inequality . Germany has eight times the number of critical-care beds per 100,000 inhabitants as China, underwriting the need for early suppression of the virus.

The idea that Denmark, one of the richest countries in the world and with a population of just 5.8 million, is in any way a model for China to emulate is not only incomprehensible but also dangerous . If there is one lesson the pandemic has taught us, it's that national conditions within countries matter.

With this in mind, anyone calling for an immediate end to China's zero-Covid strategy should be reminded of what they advocate: the very real risk of hundreds of thousands dead.

This does not mean Beijing's strategy is beyond criticism. There are very real concerns, as evidenced on Chinese social media during the recent lockdown in Xian. And yes, Beijing's calculus is obviously driven by a combination of factors beyond the strict realms of public health. But this does not change the fact that so far, whatever the criticism, since April 2020 there have barely been any deaths directly caused by the virus.

The coming months will be challenging for China. As outbreaks become more commonplace and difficult to contain, threatening domestic growth, a minority of voices within the country are calling for looser measures. With the IMF cutting its forecast for global growth, external pressures driven by the cold logic of international capital will mount. 

But whatever path Chinese policymakers choose to take, their unique and complicated national conditions will be taken into account. The alternative, as seen in the ever unfolding human catastrophe in the US and elsewhere, does not bear thinking about.

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