Medical workers around a locked neighborhood after new cases of Covid were detected in Shanghai
Chinese President Xi Jinping has pledged to reduce the economic impact of anti-Covid measures, signaling a shift in a longstanding strategy to reduce deaths but weigh on the second-largest economy. world.
While reiterating its commitment to its Covid-Zero policy, China will “strive to achieve maximum prevention and control effectiveness at the lowest cost and minimize the impact of the epidemic on the development of the epidemic.” economic and social development,” Xi told a meeting late Thursday of the Politburo. Standing Committee, the highest decision-making body of the Communist Party.
This is the first time Xi has emphasized minimizing the economic costs of containing Covid at a politburo meeting since the start of the pandemic in 2020, according to a search on the government website Bloomberg. China is dealing with its worst Covid-19 outbreak since the first outbreak in Wuhan, with tens of millions of people including residents of the southern tech hub Shenzhen under lockdown.
As part of its pledge to stabilize financial markets and stimulate the economy, China said virus control should be coordinated with economic development. The comments, made at a recent meeting of China’s top financial policy committee, reiterated what officials have frequently appreciated over the past month that Covid policy needs to be adjusted. to minimize disruption to business operations.
People familiar with China’s thinking told Bloomberg News that China won’t meaningfully ease Covid Zero before 2023, as demand stabilizes in a politically important year for the virus. Mr. Xi.
Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong Ltd. in combating the virus implies “any correction will be preceded by eradication of the infection,” he said.
Growth target
Some economists, including Morgan Stanley and UBS Group AG, recently downgraded their growth forecasts for the year, saying Beijing’s expansion target of around 5.5% would be difficult to achieve. Goldman Sachs Group Inc chief economist Hui Shan.
Virus control measures have led to temporary factory closures at companies such as iPhone maker Foxconn Technology Group and Toyot Motor Corp. For consumers, the restrictions have meant a decline in travel and spending at shops and restaurants, with sentiment still weak from pre-pandemic levels.
In another positive sign, the government said on Friday, China’s southern tech hub in Shenzhen will resume factory, bus and metro operations in five counties once they reach Covid target.
Beijing also wants people’s lives to be minimally disrupted, with Xi saying China should “maintain the stability and order of production and people’s normal life, do a good job of production and provide daily necessities and ensure the medical needs of the people.”
On vaccines, Xi called for strengthening public education and promoting the benefits of dosage and further improving vaccination rates. He also called for scientific and technological research and vaccine development to be strengthened.
Nomura Holdings Inc. China’s focus on developing home-grown vaccines remains uncertain, suggesting that it is not ready to exit its Covid Zero strategy this year, said the statement.
The comments were deemed “not yet a sign of exiting the current ‘dynamic zero-Covid strategy’, nor a sign of a roadmap to a transition to a Covid-living strategy,” the economist said. Nomura’s China chief, Lu Ting and colleagues wrote in a note.
