Letters | As China eases its zero-Covid policy, can it prove the naysayers wrong?

Readers discuss China’s economic resilience during the pandemic, and how work-life balance can spur the economy

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A worker in a protective suit stands at a food shop in Shanghai on December 12. On December 8, China’s State Council issued new guidelines on how to manage and monitor Covid-19 symptoms. Photo: Reuters

Published: 2:30pm, 14 Dec 2022

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On September 22, 2015, President Xi Jinping delivered a speech in Seattle in which he shared his first-hand experience of China’s extraordinary journey. “We can fulfil the Chinese dream only when we link it with our people’s yearning for a better life,” he said.

The president’s words were by no means lip service: between 2015 and 2019, the nation recorded annual gross domestic product growth of 6-7 per cent, 3-4 percentage points higher than that of the United States, Japan and Germany, the other three of the world’s four largest economies.

Then, in 2020, Covid-19 hit the world hard. A chorus of economists warned of the impact of China’s stringent zero-Covid policy on the economy.

Despite the intense outbreaks in 2020, China recorded GDP growth of 2.2 per cent, while the other large economies recorded negative growth – the United States -3.4 per cent, Germany -4.6 per cent and Japan -4.5 per cent.

Although China’s resilience during challenging times should be clear by now, why are sceptical voices still raised now that the country has begun to gradually unwind its zero-Covid restrictions and, in a pro-growth shift, proposed a 5 per cent GDP growth target for next year?

While the central government can decide to reopen the Chinese economy overnight, it takes time to restore market confidence, both among foreign investors and domestic consumers. Li Daokui, Mansfield Freeman professor of economics at China’s Tsinghua University, said in an extended interview with CNBC’s Squawk Box Asia on November 30, “the long run impact might be already shaped, that is, the international economic community are thinking twice about the stability of supply chains in China” and that they may opt to “rebuild their own supply backup chains in their own countries or regions”.