China's Draconian Lockdown Policies: Major Consequences to Follow

While most of the world lifted covid-19 restrictions and learned how to live with the virus, China doubled down on its zero-covid policy in order to reinforce the propagandistic argument that China has succeeded in controlling the pandemic, whereas the West has failed. This narrative fits very well Xi's political agenda

Politicized and Flawed Health Strategy

• After the initial accusations that it covered up the emergence of the virus at the beginning of the pandemic, China was widely praised for having done an effective job in containing the disease
• This was achieved with a zero-covid strategy based on brutal lockdowns and mass testing of entire towns or regions, even when only a handful of cases were detected
• In parallel, Beijing drastically curtailed and controlled international travel via lengthy quarantines and introduced mandatory mass vaccination
• For a while, this policy seemed to work well
• The arrival of the more contagious but less lethal omicron variant prompted Western countries to abandon the vast majority of covid-19 restrictions, reopen economies, and resume free international travel in spring 2022
• At the same time, China stayed its course and reintroduced full or partial lockdowns in more than forty-five cities, including Shanghai, Beijing, and Hong-Kong, which combined account for 40 percent of China's gross domestic product (GDP) and are home to 370 million people

A Severe Economic Impact for China and the World

• Sweeping covid-19 lockdowns seriously hampered economic activity and undermined China's capacity to function as the world's supply chain hub.
• The sudden shutdown of factories and logistics networks has made business planning almost impossible and has multinationals' lowered revenues, seriously damaging foreign businesses' confidence in China.

Conclusion

• China's zero-covid strategy is another example of how policies that prioritize top-down political interventions over market solutions that respect individual freedom fail.
• Faced with rising challenges in terms of deglobalization, the ongoing trade and tech wars, and a debilitated real estate sector, China would be better served by market-oriented policies that favor rather than discourage domestic and foreign investment.

 

https://mises.org/wire/chinas-draconian-lockdown-policies-major-consequences-follow