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Opinion | In its rivalry with the US, China can leverage 3 advantages
- While on the surface, the US has reduced imports from China, it continues to depend on it indirectly
- China is a key supplier of electronic components to countries such as Vietnam and Mexico which export to the US, it dominates the production of rare earths and is part of the world’s largest free-trade bloc
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China has been struggling to balance curbing the spread of the coronavirus with stimulating its weakening economy. The country ended its zero-Covid policy in early December and, by mid-January, had reported nearly 60,000 fatalities linked to the virus.
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The full toll of this abrupt change in health policy on human lives will not be known for some time. But economic growth is the silver lining that can create a better future for China and beyond.
Clouds continued to loom over China after three years of isolation due to quarantine, mass testing and Covid-19 lockdowns. The zero-Covid policy successfully reduced the spread of the early strains of the virus, but significantly bogged down the economy.
The youth unemployment rate exceeded 19.9 per cent last July, the highest rate since Beijing started publishing the index in January 2018. In December, China’s exports contracted 9.9 per cent year on year, the worst figures since February 2020. Gross domestic product grew 3 per cent in 2022, well below the government’s target of “around 5.5 per cent”.
Some might argue that the Chinese government should have lifted its zero-Covid policy gradually so the country was better prepared. However, it is also plausible that curbing the spread of the virus is untenable because it has mutated.
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Instead of prolonging the agony, it may have been more effective to open everything at one go to stimulate the economy in the hope that a catastrophic loss of human life could be avoided if the Omicron variant is indeed less deadly.
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