Beware the Aftershocks of China’s Covid Earthquake
Life is resuming in some big cities, but the social, economic and geopolitical impact of Beijing’s dramatic U-turn will linger long after this wave of infections peaks.
On the road again.
BloombergIt’s almost impossible for an outsider to fathom the dizzying policy whiplash on the scale of what China has just experienced. After three years of living with unbendable pandemic restrictions, 1.4 billion people went, almost overnight, to having virtually none. Borders have swung open. An existence punctuated by intrusive testing requirements, over-zealous enforcers, barricaded housing compounds, centralized quarantine, even drones — all to keep Covid at bay — has been replaced with daily improvisation and surging infections.
The good news is that there is evidence, after weeks of soaring numbers under the new laissez-aller approach, that at least parts of the country are seeing the current wave crest. Both subway and traffic congestion data support authorities’ claim that the outbreak has already peaked in cities like Beijing, Guangzhou and Chongqing. Optimistic market-watchers are now hoping for more than a touch of revenge spending at home and overseas, even property sector convalescence. The economy may have ended 2022 in the doldrums, but, the thinking goes, life should snap back, and the billions lost to Covid Zero will be recouped.