China Research

What we do know is that fact that corona also reached China from the very beginning. Certain people claim that that corona originates in Wuhan at a laboratory. This, however, nobody knows for sure. Anyway, the first infection cases happened in China. We also know that Chinese political leaders recently changed their policy stance in the fight against corona – from very restrictive to clearly less restrictive. But which were the real driving forces behind these changes?

Management by fear

China was the first country to be confronted with the covid virus roughly three years ago. China also acted as the first country to impose drastic restrictions to stop the disease. This was understandable as big concerns about major contagion already existed directly after the eruption of the crisis.

The objective of control and maximum battle against covid-19 (zero-covid strategy) was close to recently to reduce virus contagion down to almost zero and finally eliminate the virus. But fear remained around all the time and continues to do so – not very strange when considering the population of 1400 million people and the enormous potential of contagion. Consequently, management by (feeling) fear continued – provided with the frequent official political remark that the zero-covid strategy has kept Chinese corona contagions and deaths low when comparing with Western countries. Rumors say that President Xi Jinping himself persistently commanded the application of the zero-covid strategy.

But also transparency so far remained low during the corona crisis. Since I for a long time have been analyzing that the quality of economic statistics was quite limited in China, I applied this questioning experience also to the statistical interpretation of covid infections – right or wrong. I suspect that published corona statistics showed much lower numbers than reality would have shown. Statistical transparency remains by far too low.

Strict restrictions with more and more lockdowns went on for quite some time but citizens finally became impatient and started this fall their protests and even demonstrations. Political leadership continued management by (feeling) fear for a while. Only recently, however, a far-reaching easening of the corona restrictions was introduced allowing more mobility and less control – again driven by management of (feeling) fear. This time probably by fear of social unrest, since the corona situation only a few days before the corona deregulations was worsening. An enormous swing!

What now?

The comprehensive abolition of many covid restrictions in the beginning of December this year seems to be risky. Everything happened so suddenly and quickly. Chinese institutions had no time to prepare. The omicron virus was suddenly explained as quite harmless – opposite to official comments only the week before.

Now, an obvious risk for the future is a fast acceleration of new corona infections and exhausted hospital resources. Such developments could also counteract a visible economic recovery which the whole world is waiting for.

On the other hand, the big future opportunity in the short run may be a beneficiary widening of the Chinese labor force and, thus, more potential for production – particularly if China politically starts to lean a little bit more to the West again.

Summary: China’s corona conundrum remains puzzling. Corona is not dead!

I send all readers my best seasonal greetings and a Happy New Year with at least some economic recovery.

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

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