China: Xi insists on ‘zero tolerance’ policy for coronavirus despite cost to economy

China’s zero-sum Covid policy, which includes lockdowns and repeated mass population tests, is proving costly for the country’s economy, experts warn today, a day after President Xi called for the process to continue.

According to official figures, Covid’s rigid zero-sum policy has allowed China to reduce its death toll to just over 5,000 deaths since the pandemic began.

As soon as a Covid case occurs, the authorities impose strict restraint measures.

For more than a month, Shanghai’s 25 million people have been under siege following an outbreak of the epidemic, with the shadow of a lockdown hovering over the capital, Beijing.

Each new outbreak of Covid in China leads to free and systematic diagnostics among residents, as well as varying degrees of restrictive measures that have an impact on the economy.

While some cities tend to generalize diagnostics every 48 hours, extending the measure nationwide could cost China up to 2.3 growth units this year, warns Nomura Bank.

From an economic point of view, this risks having a “significant” impact on logistics and population movements in return for “limited” benefits and “increased” costs, which will undermine growth, according to Nomura.

For its part, international credit rating firm Fitch has revised its growth forecast for China to 4.3% this year (up from 4.8% previously).

China has set a growth target of “around 5.5%” this year after 8.1% in 2021.

Some economists doubt that the Asian giant will achieve its goal, citing deteriorating health, the war in Ukraine and the crisis in the real estate market.

With voices calling for easing restrictions in recent months, President Xi Jinping on Thursday called for a continuation of Covid’s zero-tolerance policy and for a “decisive fight” against anything that “challenges” that strategy, according to the agency. New China News (Xinhua).

The communist regime sees its health policy as proof of the superiority of its political system, as opposed to the outbreak of a pandemic in the rest of the world that has cost the lives of millions.

Today, the main article in the official newspaper of the Communist Party, the People’s Daily, counters the accusations that China’s coronavirus policy is causing turmoil in the world economy and trade.

“Some American politicians have repeatedly attacked and slandered China’s measures to prevent and control the pandemic and are trying to hold China accountable for the so-called disruption of global supply chains,” he said, without naming the politicians.

According to the article, China puts “life first” and, although the pressures on its economy have increased, the country can overcome the difficulties.

Asian stocks fell today amid growing concerns about a zero-tolerance Chinese policy on Covid. The broader MSCI Index for Asia-Pacific equities outside Japan fell 2.87% to its lowest level since March 16. Chinese blue chips fell 2.53%, while the benchmark index in Hong Kong fell 3.89%.

SOURCE: ΑΠΕ-ΜΠΕ