These are incredibly exacting standards, far more stringent than the rest of the world.

The US saw a peak of nearly a million daily cases in early 2022. Even in May, US cases averaged over a hundred thousand, but there were no restrictions in the country. France’s 2022 peak was over half a million per day. The country is still seeing 20,000 cases, while also embracing a tourist boom. In the world’s major economies, restaurants are booked, cruise ships are filled up, and tourists are out and about. People and governments have thrown off Covid restrictions, even when cases spike.

With one giant exception. Why is China reacting so strongly to Covid cases, relative to everyone else?

After all, recent variants have been extremely contagious, but also less virulent. Western hospital systems have not remotely been overrun, despite sky-high case numbers. As the pandemic turns endemic, why hasn’t China decided to live with Covid, as the rest of the world has done?

First, China is the only major country that has never had a significant Covid wave. The US had more than a million cases a day in 2021. The UK and continental Europe saw similar large waves at different times last year. India had a horrific surge last spring.

By contrast, China’s peak was the 25,000-30,000 cases the country saw this April, a tiny number for such a large country. The World Health Organization recently estimated that more than two-thirds of the world’s population have significant levels of Covid-19 antibodies. A country without a significant Covid wave, though, is unlikely to be part of this group.

Second, China is behind in vaccinating its elderly population. In this regard, there are parallels between Hong Kong and the mainland. Hong Kong registered the most deaths per million people in 2022 due to Covid — almost 25 times that of Singapore. It was because Hong Kong’s elderly had lower rates of vaccination than the overall population — a surprising occurrence given that the rest of the world prioritised vaccinating older people from day one.

Estimates are that less than 60 per cent of Hong Kong’s elderly were vaccinated by the first quarter of 2022, as opposed to over 80 per cent of the general population. China is similar. A little over 50 per cent of people aged 80 and over on the mainland had their primary vaccinations by March. Less than 20 per cent also had a booster. Chinese officials estimated in March that 52mn people aged 60 and above had not been fully vaccinated.

Finally, look at the experience of China’s neighbours in 2022, when very contagious but less dangerous variants started to take over. South Korea had over 400,000 daily cases in February 2022. This in a developed country with high vaccination rates. Japan saw a peak of over a 100,000. The new variants are contagious enough that if zero-Covid restrictions were dropped in China, cases would probably spread like wildfire.

And while many people in the rest of the world will shrug off new infections thanks to vaccinations and prior exposure, China’s elderly at-risk population — lacking antibodies and often not fully vaccinated — is vulnerable. And that is why China has stuck to its zero-Covid policy, despite the economic costs.

This suggests that we likely haven’t seen the last of the lockdowns. After all, the zero-Covid policy has worked in keeping cases down, and Chinese officials have repeatedly proclaimed it a success.

The less than hundred cases a day that the country is currently seeing is an incredibly low number. But that’s precisely the point — the only way to keep cases at such low levels is through continually rushing to impose new physical isolation and testing measures wherever cases spike. And the variants are contagious enough that if a few cases pop up, Chinese authorities will have to lock those areas down; otherwise a few dozen will become tens of thousands very quickly.

From a health standpoint, China has an impressive record of managing Covid. Adding up government statistics the world over, almost 7mn people have officially died due to Covid, including more than a million Americans. Other estimates are higher; the World Health Organization’s estimate is that there have been 15mn Covid deaths. In contrast, China’s Covid losses are a few thousand.

But this also means the country is now at a very different stage of the Covid cycle than the rest of the world. 2022 is likely to be a year of revolving Covid lockdowns in China, regardless of the mounting economic cost.

More from Sin0cism:

3. New outbreaks and lockdowns in Shanghai and Beijing

Some residents are back in lockdown, business are forced to close again while tests results are pending. The government can’t keep doing this and then not give much more direct aid to affected businesses and individuals. Tax breaks are nice, but not very helpful if you have no revenue

Shanghai Orders Over Half Its Residents to Undergo Covid Testing as Resurgence Fears Rise – WSJ

More than half of Shanghai’s 25 million residents will undergo Covid-19 testing this weekend, raising the prospect of extended periods of home confinement for any who test positive, a rude awakening that comes just one week after the city celebrated its emergence from a punishing monthslong lockdown.

On Thursday, Shanghai authorities ordered residents in at least seven of the city’s districts, with a combined population of 14 million, to undergo mass Covid-19 testing starting Saturday, according to state media reports. Authorities didn’t give details on how long the sampling period will last.

A Shanghai District Declares Snap Lockdown for Mass COVID Testing – SixthTone

All 2.65 million residents of Minhang District will be required to undergo a nucleic acid test Saturday morning, according to an announcement Thursday. A lockdown throughout the district will be imposed during “the screening period.”

Shanghai to conduct mass COVID testing in 7 of its 16 districts at weekend | Reuters

The districts to be tested are Pudong, Huangpu, Jingan, Xuhui, Hongkou, Baoshan and Minhang, the deputy director of Shanghai’s health commission, Zhao Dandan, told a media briefing.

China COVID jitters flare up as parts of Shanghai resume lockdown | Reuters

Shanghai residents in particular are on edge as new cases flare up after the city’s grinding two-month lockdown ended, with officials on Thursday tracing three infections to the Red Rose, a popular beauty salon in the city centre that reopened when the city did on June 1.

The shop had served 502 customers from 15 of Shanghai’s 16 districts in the past eight days, a local media outlet, The Paper, reported…

Authorities said a preliminary investigation found that some of the salon’s 16 employees did not undergo daily COVID testing as required, and that 90,000 people linked to Red Rose staff or customers had been tested.

Another district in Beijing shuts entertainment venues to contain COVID outbreak | Reuters

China’s capital city of Beijing shut down entertainment venues in its Dongcheng district from Thursday in an effort to contain a new outbreak of COVID-19, the state-backed Beijing Daily said late on Thursday.

The move came after Beijing’s largest district, Chaoyang, also ordered entertainment venues and internet cafes to shut from 2 p.m. (0600 GMT) on Thursday.

Entertainment venues suspended in Beijing’s Chaoyang district – People’s Daily

All entertainment venues including karaoke bars, clubs and internet cafes in Beijing’s Chaoyang District have been suspended since Thursday afternoon, according to local officials.

Officials vow to prevent the spread of the virus and cross-infection caused by the gathering of people, and ensure the dynamic zero-COVID approach due to the current epidemic situation in the capital city.

新京报 – 北京：全市开展酒吧、KTV、网吧等场所防疫检查

Beijing orders epidemic control inspections of all bars, KTVs and Internet cafes in the city

‘It’s tough’: lockdown drags on for millions in Dandong, near North Korea | South China Morning Post

Dandong – China’s biggest city bordering North Korea – has been locked down for more than a month due to successive waves of Covid-19, and for frustrated residents there is no end in sight.

They have been confined to their homes since the end of April, yet case numbers are rising. So far, there have been 56 local cases but more than 850 asymptomatic infections, according to the latest figures from the provincial health commission. Five new locally acquired cases were reported on Tuesday.

The city – home to more than 2 million people – is located in the northeastern province of Liaoning

天津：6月11日在全市范围开展新一轮全员核酸检测

Tianjin to start another round of testing of all residents on June 11

---

4. Is mass testing fiscally sustainable?

It is increasingly clear that many local governments can not afford to pay for regularized mass testing. Many local governments are under massive fiscal strain even before having to pay for tests, with some cutting pay and benefits for cadres, and so there is no way they can afford regularized testing programs, without either significant infusions of money from the central government, or coercing local residents to pay, which is not going to help social stability or make “people feel reassured”.

Mass testing should conform to local conditions, NHC official says – China Daily

Local governments should avoid unnecessary mass COVID-19 nucleic acid testing, the National Health Commission said on Thursday.

He Qinghua, an official with the commission’s Bureau of Disease Prevention and Bureau, said authorities should devise the frequency and scope of testing campaigns based on local epidemic situations.

“Blindly expanding the range of testing should be avoided,” he said.

More of He’s comments – 国家卫健委：依需科学划定核酸检测范围和频次

“没有发生疫情，也没有输入风险的，查验核酸不应该成为一种常态。”贺青华强调说，低风险地区、低风险人群，没有必要进行频繁的核酸检测，核酸检测重点应该放在高风险人群和高风险岗位人员，以及有疫情的地区。针对近期部分地区对不参与常态化核酸检测的群众进行罚款、拘留等情况，贺青华回应称，疫情发生地应该根据当地疫情形势和防控需要，依法、科学组织好核酸检测工作。对于采取非法的、强制性措施的地区、单位和作出决定的个人，国务院联防联控机制将要求有关地方及时整改纠正。

SixthTone has calculated the costs to local governments of regularized testing – What Does it Cost to Test China for COVID-19? – SixthTone

We compared the estimated annual testing expenditure of each city with this year’s medical budget, and found that many second- and third-tier cities are facing significant financial pressure. For example, the testing budget in the northern city of Hohhot exceeds its medical budget.

Without help, testing could be a heavy burden for these cities.

This graphic from SixthTone is illuminating:

Xinhua Commentary: China capable of coordinating dynamic COVID control, economic growth

China has adjusted epidemic control measures in Beijing and Shanghai after the latest round of COVID-19 resurgence was brought under control. This, however, cannot be simply deemed as restriction lift as the country is still pursuing a dynamic approach to ensure both epidemic control and social and economic development.

For China, anti-epidemic efforts and economic growth are not an either-or choice. While prioritizing lives and health in line with a people-centered development philosophy, the country has always stressed the importance of coordinating epidemic control with economic and social development.

To this end, China has continued to fine-tune its anti-virus approach, making it ever more scientifically sound, precise and effective, so as to minimize the impact of the epidemic on economic and social development.

Among other measures, the country introduced a differentiated approach, which features dynamic adjustment of epidemic response in light of the situation on the ground.

• About
• Latest Posts

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Latest posts by Houses and Holes (see all)

• fuckedcrypto#353 - June 30, 2022
• Oil volatility probes the downside - June 30, 2022
• Recession cracks widen - June 30, 2022