The View | As long as China sticks to its zero-Covid policy, no amount of regulatory tinkering can revive its economy

Without a road map for a way out or addressing deep-seated social issues, short-term strategies for economic recovery will have only a limited effect

Regulatory easing can only work alongside efforts to increase the supply of jobs and housing and raise Covid-19 immunity – even if it means using foreign vaccines

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A cyclist stops at a quiet intersection in Beijing’s Central Business District, after the government recommended people work from home to prevent the spread of Covid-19, on May 5. Photo: Getty Images/TNS

Published: 3:30am, 11 May 2022Updated: 4:12am, 11 May 2022

The economic challenges facing China today are distinctly complex. Job creation is critical to social stability, even as the country’s ageing workforce is shrinking. The private sector must prop up a less-efficient state-owned sector. Economic development must be balanced with political control.

Added to these issues are dampened global and domestic demand for consumer goods, energy shocks, rising commodity prices, and disrupted trade and surging inflation as a result of the war in Ukraine. The world is staring at a serious risk of recession.

Finally, the Omicron wave that has rolled over China, hitting cities like Shanghai and Beijing, has taken a heavy toll on the country’s economy.

In the midst of multiple adverse trends, Beijing has announced measures to energise growth, including loosening the restrictions on Big Tech and real estate imposed last year. Will this be enough to boost the economy towards the government’s 5.5 per cent growth target for this year?

Certainly, a more measured regulatory approach for internet companies, even if forced by the recent downturn, would improve business confidence and encourage investments. But Beijing has left no doubt that private capital will remain subject to the strict supervision of the party, with little tolerance for other emerging bases of power.

Long-term regulatory stability remains uncertain. To toe the line, Big Tech will remain hamstrung from “imprudent” risk taking.

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.css-1m2rp1p{color:#34b8b5;}The View | As long as China sticks to its zero-Covid policy, no amount of regulatory tinkering can revive its economy

The View | As long as China sticks to its zero-Covid policy, no amount of regulatory tinkering can revive its economy