Xi Jinping’s crisis as zero Covid obsession casts shadow over Chinese economy | World | New

On Friday, China is expected to report that gross domestic product (GDP) grew just 1% in the second quarter, with an annual growth forecast of 4%, well below Beijing’s official target of around 5 .5% for 2022.

The figures, taken from a Reuters poll, reflect the impact of Xi’s “zero momentum” coronavirus policy on the Chinese economy.

While the country has tweaked its tough restrictions, it shows no signs of backing down from the ever-limiting approach that sees a nation of 1.4 billion people tied to their homes as soon as a case is confirmed in their suburbs. .

In addition to a sharp lockdown-induced slowdown, growth in the world’s second-largest economy has also been slowed by a struggling real estate market and uncertain trade and business relations.

International groups have spoken out on the costs of zero-Covid, with some warnings about investment plans elsewhere.

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Ken Cheung, Chief Asian Currency Strategist at Mizuho, ​​wrote: “The rest of the world is reopening and the zero-Covid policy in China will likely drive export orders and production to other countries as the supply chain.”

Joerg Wuttke, President of the EU Chamber of Commerce, said: “The world will not wait for China to improve its herd immunity.”

Mr Wuttke, who suggested to Prime Minister Li Keqiang that China set up vaccination tents next to its now ubiquitous testing centres, told Reuters: “Restrictions can only be lifted once the country has finished vaccinating the elderly. It may not be until the fall of 2023.”

China injected nearly 90% of its population of 1.41 billion and gave around 56% of them a booster shot. Yet 30 million elderly Chinese citizens are unvaccinated.

The spread of the BA.5 variant, which experts say could be the most contagious and transmissible of all to date, only complicates matters for the Chinese – and, inevitably, for Beijing’s economic prospects. .

As the rest of the world – helped enormously by huge vaccination efforts – tries to coexist with Covid, Beijing highlights the lives saved thanks to its tough measures and says it is worth keeping them until no residents Chinese are at risk of dying from the virus.

During a visit to Wuhan, the city where COVID-19 was first detected, late last month, the president said he would stick to his policy even if it meant harming the country’s economy.

He said: “We would rather temporarily affect some economic development than risk harming the safety and physical health of people, especially the elderly and children.

“Our country has a large population. Strategies such as ‘herd immunity’ and ‘flattening’ would lead to unimaginable consequences.”

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This week, Shanghai’s 25 million residents were subjected to more mandatory citywide testing, and there’s a good chance that, with no Covid-free roadmap in place, such scenarios will also be. common currency until 2023.

But public fatigue could see widespread social unrest turn into protests or riots.

With the next Communist Party Congress just months away, the question is: Can Xi reach the event politically unscathed?

The congress, which is held every five years, is a key gathering in Chinese politics.

This year’s edition is particularly important for Xi, as it will see him potentially become “president for life”.

Former Chinese leader Deng Xiaoping introduced a two-term limit to prevent the rise of another figure like Mao Zedong, who ruled the country for nearly three decades.

But that limit was removed in 2018 to allow Xi to stay in power as long as he wants.

The narrative in Beijing, which revolves around ‘defeating’ Covid and ‘winning the war against the pandemic’, suggests that Xi is determined to prove a political victory rather than find a lasting solution to a health crisis which, in December 2019 , has changed the lives of Chinese people.

It is understood that he will want to reach the Communist Party Congress in a position to prove that he deserves – whether by defying the approaches of the rest of the world or by fighting to defeat a highly transmissible virus – to launch a rare third term.

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