(Bloomberg) -- China is looking for ways to reduce the “social costs” of its strict Covid Zero strategy, an official said on Thursday, in a sign that Beijing is looking to adjust a policy that has been criticized for isolating the world's second biggest economy.
The country should closely monitor developments with the pandemic around the world, said Guo Weimin, spokesman for the Chinese People's Political Consultative Conference, the country's top political advisory body, days before lawmakers convene in Beijing for an annual parliamentary session.
The comment adds to indications that China is assessing the strategy with a view to easing after two years of closed borders, mass testing and lockdowns. But any shift will be slow and unlikely to occur before 2023, given the need for stability in a politically important year for President Xi Jinping.
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While the strategy has kept Chinese deaths to a far lower level than in Western economies, it's leaving the world's second-largest economy isolated as the rest of the world pivots to treating the virus as endemic. The battle to keep Covid out has also become increasingly costly in the face of more transmissible variants like omicron, and the spiraling outbreak in Hong Kong -- now one of the deadliest in the world -- is illustrating the dangers of a loss of control.
Guo made it clear that China has no plans to completely dump Covid Zero, saying the strategy had guaranteed stable economic and social development.
Premature Shift
China's existing playbook, which has seen entire cities locked down for weeks and entry blocked to almost all foreigners, will remain throughout 2022, according to people familiar with the central government's deliberation.
Concern over the disruption -- and deaths -- that could come from China allowing the virus to flare is behind the thinking, with a number of key political and social events slated for this year, the people said, asking not to be identified talking about internal deliberations. Top leaders think any near-term shift away from the existing containment regime suggested by scientists and experts would be premature for now, the people said.
In the nearer term, smaller steps may be taken, like creating bubbles similar to the one used in the Beijing Olympics to allow foreigners to visit without quarantine, said a person familiar with the matter. The Olympics closed loop, in which athletes and support staff had no contact with residents outside, did not see any significant infection spread within, nor seed outbreaks outside.
Authorities may consider rolling out pilot schemes to ease restrictions in select cities as early as this summer, the Wall Street Journal reported Wednesday, citing people it didn't identify.
Covid Pill Approval
A drumbeat of developments suggesting China is mulling a Covid Zero exit plan has gathered pace this year. In mid-February, the national drug regulator quietly granted conditional approval to the oral anti-viral developed by Pfizer Inc, a unexpected move considering China has withheld approval from Pfizer's highly effective messenger RNA vaccine developed with BioNTech SE, which Shanghai Fosun Pharmaceutical Group Co has the local rights for.
China's Approval of Pfizer Pill Opens Door to Ending Covid Zero
The greenlight was seen as a sign of China's willingness to pivot from Covid Zero, as anti-virals play a crucial role in limiting deaths if the virus is allowed to spread in China. Nearly 90% of the population are fully inoculated with homegrown shots, but the Chinese vaccines are generally less effective than the messenger RNA shots used widely in developed economies.
Then in late February, Wu Zunyou, chief epidemiologist at the Chinese Center for Disease Control and Prevention, said at a webinar that although Covid Zero has helped China keep the virus under control and the economy grow in the past two years, sticking to it presents challenges. The private sector will struggle to survive and Western economies' reopening will add pressure on China, according to a transcript of his speech published by a magazine affiliated with state news agency Xinhua.
Thus multiple teams, he said, are studying ways to handle Covid without lifting all restrictions. Such a solution “would ensure outbreaks are controlled and people's lives prioritized and at the same international exchange and economic development are guaranteed.”
This week, former China CDC expert Zeng Guang, who has advised Beijing on Covid control, said in an article published on his Weibo account that China won't stick to Covid Zero forever. The country should learn lessons from Western countries' “courageous, but risky” experimentation to coexist with the virus.
“At an appropriate time in the not so distant future, we will show a roadmap for co-existing with the virus, China-style,” he said.
Deaths, Hong Kong
Any shift will involve significant risks for Xi's authority over the country and could be seen by some as an embarrassing retreat. China's lower death toll, with less than 5,000 fatalities for a population of 1.4 billion, has often been trumpeted by Communist leaders as proof of the superiority of the approach versus the U.S., making it politically difficult for the Party to shift.
After two years of Covid Zero, Chinese people have little natural immunity, ensuring the omicron variant is likely to spread like wildfire like it is in Hong Kong right now.
A study published by the prestigious Peking University last year indicated that removing curbs could lead to as many as 637,155 infections in China daily, of which more than 22,000 will be severe cases that would have “a devastating impact on the medical system of China and cause a great disaster within the nation.”
China Study Says Adopting U.S. Stance Would Trigger Covid Surge
The country's reliance on its own vaccines -- which have been found to be less effective than the mRNA shots, especially against the omicron strain -- and its uneven healthcare system also make opening up a risky prospect.
The crisis in Hong Kong is now illustrating both the dangers of virus spread in a Covid Zero place, and the growing futility of the strategy.
Officials in the financial hub say they remain committed to the policy, even as they are forced to give up on key measures like mandatory isolation of cases and contact tracing as daily infections surge past 50,000.
Hong Kong's Covid Death Rate Now One of the World's Highest
The health-care system is straining, and unvaccinated elderly people -- who hesitated to get the shot because the city was largely virus-free for so long thanks to Covid Zero -- are dying in droves, pushing the city's mortality rate to one of the highest in the world.
“Covid Zero is China's answer to the virus under a certain time and won't remain indefinitely,” Zeng wrote on his Weibo account. “Co-existing with the virus where infections and death are at a tolerable level is the long-term goal for humanity.”
©2022 Bloomberg L.P.
With assistance from Bloomberg
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