China has achieved a “decisive victory” over the Covid-19 epidemic in the country, its leaders triumphantly claimed last week. But the “victory”, as it turned out, came at the cost of huge sums of money spent on draconian and much-criticised virus control policies, which not only dented the economy and public finances, but also badly impacted people’s incomes and expenditure besides upending the lives of millions.
Of course, the announcement of victory over Covid-19 was only an exercise in triumphalism. (File Photo)
Not to speak of the resentment against the “zero-Covid” measures that boiled over in rare protests in November as Chinese citizens watched the world move to a post-pandemic era even as their homes and localities were being locked down.
Late on February 16, a meeting of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee — headed by President Xi Jinping — said that China had “…scored a major and decisive victory in its response to Covid-19, and has created a miracle in the history of human civilisation, in which a highly populous nation has successfully pulled through a pandemic.”
By last year, the Chinese government already understood that implementing “zero-Covid” measures was economically untenable, especially given the high transmissibility of the Omicron variant: Several outbreaks across China in 2022 — especially the brutal and bruising one in Shanghai — meant city after city was being put under targeted lockdowns, disrupting lives without actually eradicating the virus.
“The characteristics of hidden transmission are obvious, it is difficult to clear zero, and the social costs and costs of epidemic prevention and control have become high...” Xinhua reported on January 8 this year — that was a month after China had dismantled the “zero-Covid” apparatus.
“From Sunday (January 8) China starts managing Covid-19 with measures designed for combating Class B infectious diseases, instead of Class A infectious diseases,” the report added.
The Chinese government, the report pointed out, made several adjustments in its Covid response from late last year, ranging from 20 measures in November, 10 new measures in December and changing the Chinese term for Covid-19 from “novel coronavirus pneumonia to novel coronavirus infection, and downgrading Covid-19 management measures.”
The economic reality had set in.
By the end of November, 2020, China had already spent over $61 billion on fighting Covid-19, according to official data.
Given that the Covid-19 virus was first discovered in the central Chinese city of Wuhan in late 2019, the money spent in one year was already substantial.
“China spent more than 400 billion yuan (61.73 billion U.S. dollars) of fiscal funds on fighting Covid-19 by the end of November 2020,” the official news agency Xinhua said in a report, quoting the Chinese finance ministry.
On February 14, the CPC’s mouthpiece, People’s Daily, published an article totalling how much 10 provinces and cities like Beijing and Shanghai had spent on implementing the “zero-Covid’ policy in 2022 — it totalled over $39 billion.
The report mentioned that on February 2, the government of the southern economic powerhouse, Guangdong province, had billions on Covid-19 control.
The province spent some 71 billion yuan or $10.4 billion last year on Covid control.
According to the same People’s Daily report, in 2022, Beijing city spent 26.42 billion yuan or over $3.85 billion “…on health, mainly for epidemic prevention and control, implementing the three-year action plan for the capital's public health emergency management system, and strengthening the construction of the public health system.”
The provincial government of Zhejiang said 43.509 billion yuan ($6.86 billion) was spent for epidemic prevention and control and to carry out key activities such as free nucleic acid testing, construction and operation of isolation sites, and procurement of prevention and control materials in 2022.
A Reuters report, based on official provincial 2022 budgets, said 20 Chinese provinces spent at least 352 billion yuan ($51.6 billion) on Covid-19 containment in 2022.
“Of China's 31 provinces, regions and municipalities, at least 20 have disclosed their expenditure on fighting the pandemic in 2022, with rich provinces spending the most,” the report said, adding, for example: “The eastern coastal province of Jiangsu, the country's second-biggest provincial economy, spent 42.3 billion yuan handling the pandemic last year, 28 times more than in 2021”.
Mostly provincial budget outlays covered vaccination, PCR tests, subsidies to health workers, and corporate subsidies.
“Economic growth in China is projected to slow to 4.3 percent in 2022 before rebounding to 5.2 percent in 2023, largely reflecting the economic damage caused by the persistence of Covid-19,” the World Bank said in a report last June.
“For sure, China’s rebound won’t be linear. The sudden exit from zero-Covid in the final weeks of 2022 triggered an immediate slump in activity. Lack of transparency over the infection and fatality rates adds uncertainty to public health costs and the economic outlook. Neither is it clear that China has the pent-up demand seen in other major economies, given Beijing’s relatively restrained stimulus through the pandemic,” Bloomberg said in a report in late January.
Of course, the announcement of victory over Covid-19 was only an exercise in triumphalism.
“Always putting the people and their lives first, the CPC Central Committee with Xi at its core has optimized prevention and control measures in light of evolving situations, efficiently coordinated Covid-19 response with economic and social development, and effectively protected the people's lives and health,” the meeting said, according to the official statement released by Xinhua at the end of it.
Sutirtho Patranobis, HT’s experienced China hand, writes a weekly column from Beijing, exclusively for HT Premium readers. He was previously posted in Colombo, Sri Lanka, where he covered the final phase of the civil war and its aftermath, and was based in Delhi for several years before that
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