CHINA´S NEXT CONTAGION? / THE WALL STREET JOURNAL REVIEW & OUTLOOK

China’s Next Contagion?

Beijing’s zero-Covid strategy threatens the global economy.

By The Editorial Board 

People walk through a closed market in Changchun in northeastern China's Jilin Province, March 11. / PHOTO: /ASSOCIATED PRESS

There’s circumstantial evidence that Covid-19 originated from a lab leak in Wuhan, China, and this week brings into focus a new contagion from that country. 

Beijing’s zero-Covid policies, once lauded in some quarters in the West, are becoming a danger to the Chinese and global economies as the virus returns.

A new Covid outbreak appears to be underway in China. 

Official case counts, at about 5,000 a day earlier this week, are at levels not seen since the start of the pandemic. 

This appears to be driven by the Omicron variant, which burned through most Western countries weeks ago. 

The outbreaks are concentrated in northeastern Jilin Province and near Hong Kong in the south, but cases are popping up across the country.

Western vaccines such as those produced by Pfizer and Moderna proved reasonably successful at protecting those who caught Omicron from severe symptoms, but Chinese-made vaccines are less effective. 

Thanks to two years of draconian zero-Covid policies, a smaller proportion of the population may have immunity from prior infection.

In response, Beijing is doing what it does best: lockdowns. 

Jilin’s 24 million residents have been shut in, as have people in the southern exporting powerhouse of Shenzhen and parts of Shanghai, among others.

The result is another worry for a global economy that has started to right itself after two years of pandemic disruption. 

A range of exporters have seen work halted in their factories, including Foxconn ( Apple’s supplier) and Toyota. 

Logjams are developing at Chinese ports, which will have knock-on effects for global shipping.

China’s domestic growth will take a hit. 

The Communist Party regime recently announced a GDP growth target of 5.5% for the year, but that will be impossible to achieve if major commercial centers are locked down. 

Another risk is consumer confidence, which already was under threat from the property-market slowdown President Xi Jinping has orchestrated over the past year. 

Beijing claims it’s pursuing a “shared prosperity” agenda in which ordinary households will earn—and then spend—a greater share of the country’s income. 

But first they need to be let out of their apartments.

Mr. Xi appears to be waking to the economic and political dangers. 

He instructed officials on Thursday to reduce the cost households bear for Covid controls. 

Vice Premier Liu He this week promised measures “that are favorable to the market” to stabilize equity prices roiled by Covid fears and worries that Beijing’s long-running regulatory crackdown on tech companies could stifle growth.

Even as the lockdowns become more contentious with the public, Beijing shows little sign of abandoning its zero-Covid fixation. 

That policy stubbornness, combined with Beijing’s apparent failure to devise an alternative in the two years since the pandemic began, is a danger to the health of Chinese citizens and the prosperity of China and the rest of the world.