China Pays the Price for Xi’s ‘Covid Zero’ Retreat
Workers in protective gear dismantle a temporary shelter on Dec. 1 outside a neighborhood that had been placed under lockdown. China’s “Covid zero” stance was suddenly abandoned this month.
Source: Bloomberg
It is hard to understate the importance of China’s unexpectedly abrupt and wholesale abandonment of President Xi Jinping’s “Covid zero” policy, which had been strictly implemented for the better part of three years. It’s even more difficult to lay out the implications.
The immediate outlook is fairly obvious: millions falling ill and potentially millions of deaths. This looming humanitarian catastrophe will in turn trigger a massive hit to the Chinese economy. The country is effectively going from forced lockdowns to voluntary ones. Instead of freeing up consumers, the empty streets of Beijing showcase that spending—already poor—is bound to worsen, possibly for months to come.