Human Life Before Economic Growth: The Case for China’s Lockdowns

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Special Advisor and Resident Senior Fellow - U.S. and Asia

Judgments on China’s governance and political economy almost always fall into two opposite viewpoints. Intriguingly, these views are often entertained simultaneously, from different sets of facts, or even from contrasting interpretations of the same facts. Occasionally, the needle moves predominantly in one direction, that of success or of a coming failure. Examples are numerous: the Chinese economic miracle as the "workshop of the world", or as an unsustainable economic model; efficient societal management and the world’s largest exit from poverty, or an inequalitarian model riddled with corruption and propped up by the world’s most sophisticated control apparatus. The same goes for sectoral perspectives: China is now the world leader in capacities for renewable energies, as well as the world’s largest emitter of CO₂, rapidly increasing as we write. China also has the world’s first stock of engineers and patent applications; yet a high proportion of its workforce remains undereducated, leading to a stalling productivity.

Occasionally, these opposite views succeed one another as China’s political and economic cycles continue to evolve. This can happen when the CCP moves to a more open policy, or when it reimposes controls. Or as China’s energy policies move back and forth on coal and emission control policies. More broadly, China is thought to be the master of the world when the economy booms relentlessly. Conversely, it is believed to be close to a crash when a crisis unfolds.

The Covid pandemic’s succeeding waves are a prime example of such roller coaster views.
The following analysis leaves aside the controversies regarding the origins of Covid-19. While these origins are of high political and historical interest, they have little relevance to the present management of the pandemic. On the latter, two viewpoints have succeeded one another or sometimes partially overlapped.

View number one: China has achieved unparalleled success in containing the first two main Covid variants (Alpha and Delta). We were among the first to point out that it is East Asia as a whole (and, one might add, Australia) that has achieved such a success. However, the other East Asian nations were islands or quasi-islands (in the case of South Korea, the 38^th parallel DMZ is an effective barrier), and none have the scale of China’s population. India, to this date, has recorded 523,000 deaths: the WHO, in a report currently under debate with the Indian authorities, puts the actual death toll from Covid at 4.7 million. Russia’s official death toll is put at 778,000, a figure that is also believed to be underestimated. The United States passed the one million mark, and France, with 5% of the population of China, is nearing 150,000 casualties.

China has been the world’s most persistent and authoritarian country in imposing testing, as well as in managing confinements that are more radical than anything other societies have decided.

China’s official figure – at less than 5,000 before the most recent Omicron wave – has often been met with disbelief. There is no doubt that casualties in the epicenters of the first wave, Wuhan city and Hubei province, were undercounted for political reasons. Nobody suggests that this was by a factor of more than 10. Indeed, deaths from epidemics in China, such as the flu, traditionally tend to be ascribed to related or underlying causes. Still, there hasn’t been any reported case of voluntary, statistically significant undercounting. China has been the world’s most persistent and authoritarian country in imposing testing, as well as in managing confinements that are more radical than anything other societies have decided: this does suggest that fewer cases have happened under the radar in comparison with other countries where tests and confinement were less common.

It constitutes a real success – leaving aside the harsh management methods to ensure restrictions and the ensuing propaganda that has, perhaps imprudently, attributed the whole policy to Xi Jinping.

We may criticize the balance sheet regarding human suffering and restrictions on freedom of movement. These criticisms are amplified by the fact that expatriates in China’s key cities have also been affected. But, until Omicron arrived, these criticisms did not extend to the balance with the economy. Our societies have traded off their freedom of movement against a casualty rate that, to this day, is higher than that of a permanent flu epidemic. They had also sustained, before Omicron, more economic losses than China. This is nothing new – societies make choices that are partly public health policies and partly behavioral. Sometimes, these are life and death choices, and they should not be over-simplified.

A second viewpoint has now taken hold: Omicron has turned the table by defying all but the most radical confinement methods with its high infectiousness. Although we now tend to think of the variant as a persistent flu, it is actually as dangerous as the Alpha variant for the unvaccinated or partially vaccinated, the elderly, or the vulnerable. China is now a victim of the gaps in some of its previous policies – and even of its own past success. The most obvious gap is that, since the population has had almost no exposure to Covid, it has no natural immunity – even if there is a debate about the true extent of natural immunity. Its authoritarian administration of tests and vaccines has largely been based on rules regarding access to shops and restaurants, transport, and travel: elderly people, especially people over 80, move very little and were therefore not caught by this net. In spite of the impressive quantity of vaccines made in China, the vaccination scheme is considered complete after receiving two injections, not three. It so happens that the efficiency of China’s inactivated vaccines climbs to a level comparable to mRNA vaccines with three shots, not two. The failure to produce or import Pfizer-BioNTech vaccines is a result of China’s search for indigenous innovation, nationalist pride, and propaganda. This is a politically motivated gap. But is it realistic to believe that China would independently produce more Pfizer doses than the 3 billion delivered across the world in 2021? Did India, for example, make that choice?

The reliance on tests and isolation has created a path dependency that has been aggravated by the vaccination gap, especially for the elderly. China shares another trait with other developing or emerging economies: it has fewer hospital beds, especially in ICUs, than among the most developed nations. As we know too well, this shortage cannot be remedied instantly, given the required human training for operating these units. All in all, particularly in China’s countryside, where many elderly remain, an Omicron wave similar to what has happened over Europe and the US would be more deadly in China.

Politics, of course, intervene. As is the case in democracies: elected leaders weigh the economic disadvantages and the unpopularity of confinement against the "acceptable" level of casualties. This is even more so the case in China, because it has trumpeted the unique success of its containment policies and directly attributed them to Xi Jinping.

In an authoritarian system, major top-down decisions tend to be amplified at the local level. Bureaucrats fear being reproached with negligence and dragging their feet. It is clear that the extreme controls imposed on the movers of logistics – truckers, delivery employees, and all the actors of China’s giant gig economy – have amplified shortages. As the situation in Shanghai graphically demonstrates: planned rationing and distribution for 25 million people is a daunting task, even for the CCP’s mass mobilization apparatus.

We are therefore witnessing, instead of a massive Omicron spike, a massive downturn of production and logistics in some of China’s key economic centers.

It is also clear that one reported adaptation of previous isolation policies – that workers in many factories live on-site to ensure the continuity of production – cannot be generalized or last for an extended period of time.

We are therefore witnessing, instead of a massive Omicron spike, a massive downturn of production and logistics in some of China’s key economic centers – Shanghai and, to a lesser degree, Shenzhen. These repercussions will reverberate across the world’s supply chains, providing yet another example of why relying on a sole supplier is dangerous. In addition, a much broader testing and isolation policy, with Beijing currently on the edge of lockdown, necessarily depresses all service industries and household consumption. The hit to GDP growth is already evident, as some Chinese economists doubt the reliability of the first-quarter figure of +4.8 % YoY. Numbers for April, coming out soon, will undoubtedly show a steeper slowdown or trough.

But it is also being reported that around 75 of China’s top 100 cities by economic output have begun loosening up or even fully removed controls, while new cases in Shanghai and Beijing are now almost entirely among people already placed in isolation. If this trend persists, the economic downturn might be brief. Undoubtedly, supply chain issues will last longer.

Given that the above-cited gaps cannot be addressed in the short term, the alternative would have been to accept a potentially high level of casualties. Taking the probable ratio for 2022 in France and adapting this to China’s population, the figure is between 600,000 and one million. Given China’s hospital shortage, however, this figure is likely to be higher. We cannot predict the extent and duration of Covid waves, but neither can China’s leaders.

Therefore, it is clear that, for reasons related in part to these risks, in part to the potential damage to their reputation, Xi and his colleagues have chosen to stick to the most prudent course in human terms. That choice is also consistent with their obsession with geopolitical risk. Undoubtedly, it has something to do with the regime’s legitimacy. Even the economy – and exports – have taken a second seat. These preferences are consistent with the CCP’s overall priorities. For public good, in this instance.

Copyright: Jade GAO / AFP

09/17/2021

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Human Life Before Economic Growth: The Case for China’s Lockdowns