China’s zero Covid-19 approach sparks debate about long-term impact on economy

While China’s borders remain closed, its strong economic recovery and booming exports have, for many observers, boosted confidence in Beijing’s handling of the pandemic

But debate is simmering about the economic impact of China’s containment strategy, with some observers suggesting isolation and lockdowns are unsustainable long term

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China’s hardline coronavirus containment strategy has sparked debate about the potential long-term economic impact. Photo: AFP

Published: 6:00am, 13 Aug 2021Updated: 8:27am, 13 Aug 2021

With China intent on sticking to a zero-tolerance Covid-19 elimination strategy, debate is swirling over the long-term economic impact of sealing the country off from the outside world and imposing severe domestic restrictions.

China believes its handling of the pandemic has been superior to Western democracies and the ruling Communist Party sees it as a major political achievement. But some leading epidemiologists and economists have suggested the country may need to prepare to “live with the virus” given the difficulty of ensuring zero transmissions.

While China’s borders remain closed, its strong economic recovery and booming exports have boosted confidence in Beijing’s hardline containment approach among some experts. Others question whether the country’s economy can withstand long-term isolation on top of lockdowns that have disrupted the service industry.

China’s exports rose 19.3 per cent year on year to US$282.66 billion in July, the 13th straight month of growth in outbound shipments. Last year, strong global demand for goods needed to ride out the pandemic landed China’s economy a record trade surplus, with exports expanding 3.6 per cent to US$2.59 trillion.

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Li Ling, a professor at the National School of Development at Peking University, said China was now “the backbone of the world’s fight against the pandemic”.

“Our exports are at record highs because the world is still in the grip of the virus,” said Li, who is also the chief adviser on China health care reform to the World Bank.