04-18-2022
Why Is China Hurting Its Own Economy by Insisting on a Zero Covid Policy?

Carrying out its Zero-Covid policy in an attempt to contain the Coronavirus and its variants, China has locked down dozens of cities cross China - among them some major economic engine cities like Xian, Jilin City, Nanjing, Suzhou and Shenzhen. Since March 28, 2022, Shanghai, China's largest economic engine and a metropolitan city of 25 million people, has been under complete lockdown where people have been told to stay in their apartments while undergoing twice-daily tests.
To comply with Shanghai government orders, Tesla has shut down its Shanghai Giga factory, which produced about 2,000 electric cars a day. Cargo airlines have canceled all flights in and out of the city, and more than 90% of trucks supporting import and export deliveries are currently out of action. Shanghai contributes 3.8% to China's GDP and 6% of its exports, according to the government's statistical yearbook for 2021.
Chinese prime minister Li Ke Qiang announced a goal of 5.5% gross domestic production growth for 2022 during his work report to the National People's Congress on March 5. It is a target widely believed to be impossible to achieve since a third of China is under quarantine, and its economy is suffering. China's recent pandemic response is likely to cost at least $46 billion in lost economic output per month, or 3.1% of GDP, according to research from the Chinese University of Hong Kong.
So why is the Xi Jin Ping government ordering the Zero-Covid policy to lock down so many cities in China? Don't they want to have a China that is prosperous, its people have good health and steady income? Why has China not imported proven vaccinnes like Pfizer or Moderna and made them available to its people?
The answer depends on who is the leader of China and what he cares most.
Many people would assume that the China's leaders are rational, or at least they would work for the benefits of the large Chinese population. Many assume China's leaders represent its people just like in a free society like the U.S. or U.K. That is a big misunderstanding because China's social system is Not at all like that in a free society.
The Chinese leader is Not elected by its people. Rather he was appointed by a very small number of elder leaders of the Chinese Communist Party. These former party leaders, usually in their 80's or 90's, may still wield some influence if not real power. If the current leader Xi Jin Ping feels that his position is not secure enough, then he may resort to actions whose only purpose is to consolidate power for himself. Such actions may include silencing voices of the party elders, or even arresting them through a coup detat. Actions that benefit Xi's power but hurt China's economy may be viewed as irrational by outsiders. But so what? The Cultural Revolution from 1968 to 1978 was started by Mao for the sole purpose of overthrowing senior leaders that Mao considered a threat to his power and position.
One explanation for the current Zero Covid policy is Xi Jin Ping believed in the early success China achieved by locking down Wuhan, where the Covid-19 originated in the beginning of 2020. By locking down people and stopping them from moving around, the Chinese government believed it succeeded in reducing deaths from Covid-19. It was done at the expense of patients suffering from other diseases.
China's government reports a total 4,638 deaths from Covid-19, a miracle number in comparison with the 987,000 Covid-19 deaths in the U.S., 172,000 in the U.K. and 6.2 million in the E.U. countries. Despite doubts about the autheticity of China's death toll from Covid-19, the Xi government touted China's success of its method of dealing with the Coronavirus, demonstrating the superiority of its system.
The variants of the Covid-19, Delta, Omicron, Ba.2, have higher transmission rates. They infect more people even though causing a lower death rate. Administrative actions like the lockdowns do not seem to work anymore. A more effective way to deal with the variants is through mRNA vaccines. Such mRNA vaccines made by Pfizer BioNTech and Moderna have efficacy rates above 90%.
However, switching to mRNA vaccines, and the proven brands like Pfizer and Moderna, is likely to be seen as a rebuke to Xi Jin Ping who once famously said that he 'personally commanded and planned' the campaigns against the Covid-19 to the visiting head of WHO in 2020. It would be a act of 'Losing face' for the leader.
The answer to the question why China locks down its cities and halts its economy depends if such actions can help consolidate Xi's power.