What if the war in Ukraine was not the biggest threat to the global economy? Thousands of kilometers from kyiv, Mariupol or Lviv, the fate of world stock exchanges is being played out in Shanghai. The nerve center of China is placed in strict confinement to respect the “Zero Covid” policy of the Asian giant. One strategy is to isolate an entire sector, which can range from a neighborhood to an entire region, as soon as the slightest case of coronavirus appears. The idea? By confining in a preventive way, the epidemic is not given time to get carried away, and the number of cases remains under control.
A policy that gives Shanghai images that are as alarming as they are absurd in terms of dehumanization: infants torn from their positive mothers, detention centers for positive cases crowded, portions of food reduced to a trickle. There is also a city, a major economic player on the planet, which is running at a standstill, and growth forecasts increasingly at half mast. Beijing set itself a target of “only” 4.8% for this first quarter on Monday, far from the 5.5% forecast for the whole of 2022, already the worst figure since the beginning of the 1990s, excluding the year 2020.
In an article with a more than evocative title – The biggest risk to the global economy that no one is talking about –, CNN quantifies the problem: “Nearly 400 million people, in 45 cities in China, are totally or partially confined as part of China’s strict “Zero Covid” policy. Together, they account for 40% of the annual gross domestic product (GDP) of the world’s second-largest economy, according to data from Nomura Holdings.
Stay the course, against all odds
Contacted by 20 Minutes, Jean-Vincent Brisset, research director at the Institute of International and Strategic Relations (IRIS) and specialist in China, joins the American journalists: “The economy is like cycling: at the end from a certain threshold, if you stop pedaling, you fall. China needs high growth, at least 6%. “A feeling confirmed by Valérie Niquet, senior researcher and head of the Asia division at the Foundation for Strategic Research (FRS): “China has major social needs that require high growth and a functioning economy”.
But with these massive confinements at the slightest burst of the epidemic, the “Zero Covid” rather puts the economy at a standstill than on the growth highway. Antoine Bondaz, also a researcher at the FRS and a specialist in China, qualifies: “For the moment, the annual growth figure is maintained at 5.5. We will see during the second quarter the impact of the containment of Shanghai. “He recalls that unlike France, the Chinese containment, as strict as it is, is extremely localized and not extended to the whole country: “The economy can therefore continue to operate elsewhere. The districts of Shanghai which have not had new cases for two weeks are starting to deconfine, in order to relaunch certain factories”.
Nevertheless, with Omicron and its sub-lineages, much more contagious than the previous variants or the original strain, Chinese policy raises questions. Faced with this accelerated transmission, many countries have given up on “Zero Covid”. Beijing is resisting.
The impossible reverse
Valérie Niquet: “Power has long touted its “Zero Covid” strategy, in opposition to a more lax West. The balance sheet per million inhabitants is very low compared to the United States or Europe. This policy has become a national pride, and it is hard to go back. Going back is anyway a concept quite unknown to the Chinese government, recalls Jean-Vincent Brisset: “China is not France, where Olivier Véran can say everything and its opposite in eight days. If Xi Jinping changes his strategy, it will mean that he was wrong, which would go rather badly. »
Beyond this firmness specific to any dictatorship, can China really let the epidemic circulate as in Europe? Not really, according to Valérie Niquet. Still out of nationalist pride, Beijing refused Western RNA vaccines in favor of serums made in china much less efficient. The country gave priority to vaccinating not the elderly, as was the case in the West, but workers, giving only partial vaccination coverage to the elderly, the most fragile.
“China has quite a few hospitals, and could not handle an explosion of cases. Letting the coronavirus slip away is potentially even tens or hundreds of thousands of Chinese dying without being able to take care of them, which would also be a task for the regime, ”supports the expert.
What consequences?
Everything is likely to be played out over the next few weeks, according to Antoine Bondaz: “The cases are starting to drop in Shanghai. If the epidemic does not affect several large economic regions at the same time and remains contained locally, the strategy will remain profitable and viable. Yes, China will not have incredible growth, but it will recover. “If, on the other hand, Omicron escapes completely and affects the country on a national scale, or that the economic results are too low, “Xi Jinping could be threatened, suggests Valérie Niquet. The Communist Party Congress is in October, and policy against the coronavirus will be closely scrutinized. »
In the event of a big downturn, the consequences will be global, as the one with the most to lose may not be the country itself. Jean-Vincent Brisset notes: “We see it with Russia: the resilience of a non-Western country is much more important than we think. If China slows down, it is above all the rest of the world that will suffer. I often illustrate our dependence to my students by asking them to remove everything from China from their tables. They still have a Bic, and more. »