The Chinese government has discreetly laid its zero-Covid strategy to rest. While democratic ministers would have loudly proclaimed the relaxations, Chinese bureaucrats step in front of the press and talk about “optimizations” of the existing policy. In fact, everything that defines zero-Covid has been abolished: widespread lockdowns, strict isolation of infected individuals and their close contacts, the dictates of the Covid health app, exhausting endless testing, and permanent distance classes. Now, the name of the game is instead: vaccination, vaccination, vaccination. Xi Jinping is still full of surprises after all.
The departure from zero-Covid is a reaction to the recent protests, but also has economic reasons. China could miss its self-imposed growth target by a wide margin this year because of the lockdowns. This is indicated by the current slump in foreign trade, analyzed by Felix Lee. Those who now gloat should first read the text. After all, foreign trade also includes, above all, German imports, whose exports declined sharply as a result.
In today’s Profile, we introduce Ivana Karásková. The Czech researcher from Prague focuses on the consequences of disinformation and the influence of the People’s Republic in Central and Eastern Europe. Next Wednesday, Karásková and two other experts from Hungary and Serbia will be guests at our Table.Live briefing, where we will take a look at China in the region.
China.Table also offers a new service: job listings. Finding skilled employees for assignments in China is currently quite difficult – this has been shown by our analyses and economic studies. If you are looking for employees in our target group, please contact our colleagues at the ad desk at Advertising@table.media.
Most economists were well aware that China’s economy is not in the best of shape, considering the numerous lockdowns throughout the country. But the magnitude still surprised many: Last month, China’s foreign trade suffered the worst slump since the start of the Covid pandemic in February 2020. It dropped by 9.5 percent year-on-year, according to the General Administration of Customs. The deficit in exports was minus 8.7 percent, while imports fell by as much as 10.6 percent.
The strict zero-Covid policy was probably the main reason for the poor numbers. Repeatedly, entire urban areas have been cordoned off due to allegedly high infection rates. The lockdowns in November interrupted supply chains and dampened consumer mood in China, Jens Hildebrandt, Executive Director of the German Chamber of Commerce in China (AHK) in Beijing, told Deutsche Presse-Agentur. In addition, he said, there were disruptions in supply chains. “Many goods could not be produced because of a lack of preliminary products that could not be delivered at all,” said the head of the chamber.
The collapse of Chinese foreign trade also hits the German economy hard. German exports to the People’s Republic were down 17.5 percent. China’s exports to Germany fell by 14.4 percent. The decline of Chinese exports to the USA is even larger. In November, exports to the US were down 25.4 percent and China imported 7.3 percent less from the United States. Many containers on their way to the USA remained empty.
This was even though it seemed that in the third year of the pandemic, many retailers and logistics companies found a way to cope with the many lockdowns and interruptions. “As far as supply chains are concerned, many traders have found ways of organizing the movement of goods, especially with China, despite the lockdowns there,” said economist Jens Suedekum of Duesseldorf Institute for Competition Economics. He also considered this flexible handling to be one reason why the high inflation rates in Germany and Europe had passed their zenith.
But the lockdowns of October and November were apparently too massive. At times, more than 200 million people were unable to leave their homes or the specially constructed quarantine facilities. According to estimates by the Japanese financial group Nomura, regions that generally contribute up to one-fifth of the gross domestic product were affected. Despite so-called closed circuits in many factories, where employees live and work for days and weeks without leaving the premises, factories were at a standstill.
This had consequences: Due to fewer customer orders, numerous Chinese factories are expected to close two weeks earlier than usual for next year’s Chinese New Year on January 21. Usually, the holiday period is only the following seven days.
Consumption also suffers considerably as a result of strict lockdowns. Entire shopping malls, some of which had only opened in recent years, now stand empty. “Who can survive three months without sales?” one foreign store owner in Shanghai’s once vibrant Anfu-Lu asks on Twitter, for example. Until 15 days ago, this was where the anti-Covid protests had taken place. In the meantime, the entire neighborhood has been sealed off, and stores are still not allowed to reopen despite the promised relaxations.
“The leadership has recognized that the zero-Covid policy and economic recovery are mutually exclusive,” Hildebrandt said about the announced turnaround in Covid policy. “The rudder is now being turned and work is underway toward relaxation.” A swift, nationwide exit from zero-Covid would be “a boon” to the recovery of foreign trade and the economy.
However, another reason for the decline in Chinese foreign trade figures is the overall weak global demand. The high inflation and energy prices in most parts of the world in the wake of the Russian war of aggression in Ukraine are also putting pressure on China’s economy. That, in turn, could be one reason why Beijing is no longer quite as united with Putin. At the start of the war in February, the leadership had assumed that the military conflict would be brief and would have little economic impact on China. This assessment turned out to be wrong.
Despite all efforts to achieve self-sufficiency by the Chinese leadership, foreign trade continues to be a key contributor to economic growth in the world’s second-largest economy. The World Bank calculates that the Chinese leadership will fail to meet its growth target of 5.5 percent for 2022. The World Bank now only expects the Chinese economy to grow by 2.8 percent. This would be the first time the leadership failed to reach the projected growth in decades.
Covid measures have been the biggest cause of discontent among the Chinese population and foreigners in the country for the past two-and-a-half years – now relaxations are being announced in quick succession. On Wednesday, the Health Commission held a press conference announcing the de facto end of zero-Covid. Officially, however, it is merely a case of “active optimization”; after all, the strategy was still highly praised state doctrine until yesterday.
Here is an overview of the changes :
The program sounds like a tremendous relief for Lockdown-plagued city residents. It is clearly the answer to their openly voiced discontent. But the relaxations raise questions.
In an interview, German virologist Christian Drosten even warned that China could become a breeding ground for new variants. A virus that is prone to mutation encounters a large and barely immune population there.
In fact, contact restrictions may be reintroduced, albeit through a back door. If Covid spreads among students, schools will have to close eventually. The Omicron variant of Sars-CoV-2 is so contagious that the radical contact restrictions of the past eight months have been the only effective way of controlling the spread of the virus (China.Table reported). This is one of the reasons why China suddenly experienced such severe problems in the spring after a largely virus-free two years.
Now China could face an exponential spread of infections. This will be difficult to contain. Even if Vice Premier Sun Chunlan cites the fact that Omikron is not as dangerous as the reason for the relaxation, the variant is by no means harmless for elderly and already sick patients with poor immunization – the mortality rate in Europe had primarily decreased thanks to booster vaccinations. China also only has half as many hospital beds per capita as Germany. Only 68 percent of China’s elderly are boostered, compared to 86 percent in Germany and 90 percent in Japan.
This is all the more reason to boost the vaccination rate among the elderly now. Zheng Zhongwei, Director of the Development Center for Medical Science and Technology of the National Health Commission, highlighted the safety and efficacy of China’s Covid vaccine. The elderly should definitely get their booster jab, the commission said; however, there will be no mandatory vaccination. Those between the ages of 18 and 59 whose vaccination dates back more than six months would also require a booster.
So a new vaccination campaign is underway in China. But it will be some time before risk groups are boosted. In the meantime, the only way the health commission can really respond to overwhelmed hospitals is to return to restrictions.
China’s role in Central and Eastern Europe has changed. Not for the better, according to Ivana Karásková. Karásková is a China Research Fellow and project coordinator at the think tank Association for International Affairs (AMO) in Prague. She originally wanted to become a journalist and report from around the world. But after graduation, she was deterred by the uncertain future prospects. She opted for science and studied and taught in Prague, Shanghai and Taipei. Karásková thus explored the world that she would later report on as a scientist.
Because at AMO, Karásková examines China’s influence in Central and Eastern Europe. Looking back at the past few years, she says: The economic crisis of 2008 hit Eastern Europe hard. Hopes were high that Chinese investment would help the region get back on its feet. But the investment boom never materialized because “China didn’t have a plan for where it really wanted to invest,” Karásková says. There was also another catch: “The investments from China came with political demands,” Karásková explains. The fact that the situation in Hong Kong and Xinjiang concerned many countries in Central and Eastern Europe was not well received in Beijing.
Nevertheless, China remained an important player. And Karásková has made it her task to research its influence. In 2016, she founded the Choice (China Observers in Central and Eastern Europe) initiative – a hub for China experts from Central and Eastern Europe. “I could have met China experts in Berlin, Brussels and Washington, but not in Prague or Warsaw.” She is also the founder of MapInfluenCE. The project details how China and Russia behave in the battle of narratives.
As Karásková explains, China has been trying to undermine trust in Western democracies via social media and classic media formats for years. One example: In the spring of 2020, the spokesman for the Chinese Foreign Ministry, Zhao Lijian, claimed that the Coronavirus originated in a US laboratory. This lie spread rapidly through Western social media channels. In part, because an army of new fake accounts, along with accounts of Chinese officials, propagated the hoax, including the Polish version of China Radio International (CRI).
The result worries Karásková. Anyone who compares Western reporting and Chinese disinformation might assume that the truth lies somewhere between the two information poles. This is not only wrong, but also dangerous for democracies, whose most valuable currency is the truth, says Karásková.
For Karásková, Russia’s invasion of Ukraine is adding a new dimension. Because China and Russia learn from each other and multiply the same anti-Western narratives. And this is happening on Western social networks. China’s message is that NATO is to blame for the war and that European democracies are on the verge of collapse. Eastern Europe in particular is the target of such disinformation campaigns. As a result, China is “turning from a problematic partner into a pariah partner for Central and Eastern Europe,” says Karásková.
Moreover, she suspects, “disinformation about Ukraine also involves Taiwan.” The goal, she says, is to already fuel anti-NATO narratives so that China’s propaganda can already build on existing anti-Western propaganda in the event of an invasion of Taiwan. The EU must anticipate this and do more to counter Chinese disinformation, Karásková urges. Jonathan Kaspar Teacher
Christmastime has arrived at Hong Kong harbor – surrounded by palm trees, visually a bit more tropical than in Europe. The oversized Christmas tree, which somewhat comically towers over the real trees, is part of Christmas Town in the West Kowloon Art Park. Or could this be art?
The Chinese government has discreetly laid its zero-Covid strategy to rest. While democratic ministers would have loudly proclaimed the relaxations, Chinese bureaucrats step in front of the press and talk about “optimizations” of the existing policy. In fact, everything that defines zero-Covid has been abolished: widespread lockdowns, strict isolation of infected individuals and their close contacts, the dictates of the Covid health app, exhausting endless testing, and permanent distance classes. Now, the name of the game is instead: vaccination, vaccination, vaccination. Xi Jinping is still full of surprises after all.
The departure from zero-Covid is a reaction to the recent protests, but also has economic reasons. China could miss its self-imposed growth target by a wide margin this year because of the lockdowns. This is indicated by the current slump in foreign trade, analyzed by Felix Lee. Those who now gloat should first read the text. After all, foreign trade also includes, above all, German imports, whose exports declined sharply as a result.
In today’s Profile, we introduce Ivana Karásková. The Czech researcher from Prague focuses on the consequences of disinformation and the influence of the People’s Republic in Central and Eastern Europe. Next Wednesday, Karásková and two other experts from Hungary and Serbia will be guests at our Table.Live briefing, where we will take a look at China in the region.
China.Table also offers a new service: job listings. Finding skilled employees for assignments in China is currently quite difficult – this has been shown by our analyses and economic studies. If you are looking for employees in our target group, please contact our colleagues at the ad desk at Advertising@table.media.
Most economists were well aware that China’s economy is not in the best of shape, considering the numerous lockdowns throughout the country. But the magnitude still surprised many: Last month, China’s foreign trade suffered the worst slump since the start of the Covid pandemic in February 2020. It dropped by 9.5 percent year-on-year, according to the General Administration of Customs. The deficit in exports was minus 8.7 percent, while imports fell by as much as 10.6 percent.
The strict zero-Covid policy was probably the main reason for the poor numbers. Repeatedly, entire urban areas have been cordoned off due to allegedly high infection rates. The lockdowns in November interrupted supply chains and dampened consumer mood in China, Jens Hildebrandt, Executive Director of the German Chamber of Commerce in China (AHK) in Beijing, told Deutsche Presse-Agentur. In addition, he said, there were disruptions in supply chains. “Many goods could not be produced because of a lack of preliminary products that could not be delivered at all,” said the head of the chamber.
The collapse of Chinese foreign trade also hits the German economy hard. German exports to the People’s Republic were down 17.5 percent. China’s exports to Germany fell by 14.4 percent. The decline of Chinese exports to the USA is even larger. In November, exports to the US were down 25.4 percent and China imported 7.3 percent less from the United States. Many containers on their way to the USA remained empty.
This was even though it seemed that in the third year of the pandemic, many retailers and logistics companies found a way to cope with the many lockdowns and interruptions. “As far as supply chains are concerned, many traders have found ways of organizing the movement of goods, especially with China, despite the lockdowns there,” said economist Jens Suedekum of Duesseldorf Institute for Competition Economics. He also considered this flexible handling to be one reason why the high inflation rates in Germany and Europe had passed their zenith.
But the lockdowns of October and November were apparently too massive. At times, more than 200 million people were unable to leave their homes or the specially constructed quarantine facilities. According to estimates by the Japanese financial group Nomura, regions that generally contribute up to one-fifth of the gross domestic product were affected. Despite so-called closed circuits in many factories, where employees live and work for days and weeks without leaving the premises, factories were at a standstill.
This had consequences: Due to fewer customer orders, numerous Chinese factories are expected to close two weeks earlier than usual for next year’s Chinese New Year on January 21. Usually, the holiday period is only the following seven days.
Consumption also suffers considerably as a result of strict lockdowns. Entire shopping malls, some of which had only opened in recent years, now stand empty. “Who can survive three months without sales?” one foreign store owner in Shanghai’s once vibrant Anfu-Lu asks on Twitter, for example. Until 15 days ago, this was where the anti-Covid protests had taken place. In the meantime, the entire neighborhood has been sealed off, and stores are still not allowed to reopen despite the promised relaxations.
“The leadership has recognized that the zero-Covid policy and economic recovery are mutually exclusive,” Hildebrandt said about the announced turnaround in Covid policy. “The rudder is now being turned and work is underway toward relaxation.” A swift, nationwide exit from zero-Covid would be “a boon” to the recovery of foreign trade and the economy.
However, another reason for the decline in Chinese foreign trade figures is the overall weak global demand. The high inflation and energy prices in most parts of the world in the wake of the Russian war of aggression in Ukraine are also putting pressure on China’s economy. That, in turn, could be one reason why Beijing is no longer quite as united with Putin. At the start of the war in February, the leadership had assumed that the military conflict would be brief and would have little economic impact on China. This assessment turned out to be wrong.
Despite all efforts to achieve self-sufficiency by the Chinese leadership, foreign trade continues to be a key contributor to economic growth in the world’s second-largest economy. The World Bank calculates that the Chinese leadership will fail to meet its growth target of 5.5 percent for 2022. The World Bank now only expects the Chinese economy to grow by 2.8 percent. This would be the first time the leadership failed to reach the projected growth in decades.
Covid measures have been the biggest cause of discontent among the Chinese population and foreigners in the country for the past two-and-a-half years – now relaxations are being announced in quick succession. On Wednesday, the Health Commission held a press conference announcing the de facto end of zero-Covid. Officially, however, it is merely a case of “active optimization”; after all, the strategy was still highly praised state doctrine until yesterday.
Here is an overview of the changes :
The program sounds like a tremendous relief for Lockdown-plagued city residents. It is clearly the answer to their openly voiced discontent. But the relaxations raise questions.
In an interview, German virologist Christian Drosten even warned that China could become a breeding ground for new variants. A virus that is prone to mutation encounters a large and barely immune population there.
In fact, contact restrictions may be reintroduced, albeit through a back door. If Covid spreads among students, schools will have to close eventually. The Omicron variant of Sars-CoV-2 is so contagious that the radical contact restrictions of the past eight months have been the only effective way of controlling the spread of the virus (China.Table reported). This is one of the reasons why China suddenly experienced such severe problems in the spring after a largely virus-free two years.
Now China could face an exponential spread of infections. This will be difficult to contain. Even if Vice Premier Sun Chunlan cites the fact that Omikron is not as dangerous as the reason for the relaxation, the variant is by no means harmless for elderly and already sick patients with poor immunization – the mortality rate in Europe had primarily decreased thanks to booster vaccinations. China also only has half as many hospital beds per capita as Germany. Only 68 percent of China’s elderly are boostered, compared to 86 percent in Germany and 90 percent in Japan.
This is all the more reason to boost the vaccination rate among the elderly now. Zheng Zhongwei, Director of the Development Center for Medical Science and Technology of the National Health Commission, highlighted the safety and efficacy of China’s Covid vaccine. The elderly should definitely get their booster jab, the commission said; however, there will be no mandatory vaccination. Those between the ages of 18 and 59 whose vaccination dates back more than six months would also require a booster.
So a new vaccination campaign is underway in China. But it will be some time before risk groups are boosted. In the meantime, the only way the health commission can really respond to overwhelmed hospitals is to return to restrictions.
China’s role in Central and Eastern Europe has changed. Not for the better, according to Ivana Karásková. Karásková is a China Research Fellow and project coordinator at the think tank Association for International Affairs (AMO) in Prague. She originally wanted to become a journalist and report from around the world. But after graduation, she was deterred by the uncertain future prospects. She opted for science and studied and taught in Prague, Shanghai and Taipei. Karásková thus explored the world that she would later report on as a scientist.
Because at AMO, Karásková examines China’s influence in Central and Eastern Europe. Looking back at the past few years, she says: The economic crisis of 2008 hit Eastern Europe hard. Hopes were high that Chinese investment would help the region get back on its feet. But the investment boom never materialized because “China didn’t have a plan for where it really wanted to invest,” Karásková says. There was also another catch: “The investments from China came with political demands,” Karásková explains. The fact that the situation in Hong Kong and Xinjiang concerned many countries in Central and Eastern Europe was not well received in Beijing.
Nevertheless, China remained an important player. And Karásková has made it her task to research its influence. In 2016, she founded the Choice (China Observers in Central and Eastern Europe) initiative – a hub for China experts from Central and Eastern Europe. “I could have met China experts in Berlin, Brussels and Washington, but not in Prague or Warsaw.” She is also the founder of MapInfluenCE. The project details how China and Russia behave in the battle of narratives.
As Karásková explains, China has been trying to undermine trust in Western democracies via social media and classic media formats for years. One example: In the spring of 2020, the spokesman for the Chinese Foreign Ministry, Zhao Lijian, claimed that the Coronavirus originated in a US laboratory. This lie spread rapidly through Western social media channels. In part, because an army of new fake accounts, along with accounts of Chinese officials, propagated the hoax, including the Polish version of China Radio International (CRI).
The result worries Karásková. Anyone who compares Western reporting and Chinese disinformation might assume that the truth lies somewhere between the two information poles. This is not only wrong, but also dangerous for democracies, whose most valuable currency is the truth, says Karásková.
For Karásková, Russia’s invasion of Ukraine is adding a new dimension. Because China and Russia learn from each other and multiply the same anti-Western narratives. And this is happening on Western social networks. China’s message is that NATO is to blame for the war and that European democracies are on the verge of collapse. Eastern Europe in particular is the target of such disinformation campaigns. As a result, China is “turning from a problematic partner into a pariah partner for Central and Eastern Europe,” says Karásková.
Moreover, she suspects, “disinformation about Ukraine also involves Taiwan.” The goal, she says, is to already fuel anti-NATO narratives so that China’s propaganda can already build on existing anti-Western propaganda in the event of an invasion of Taiwan. The EU must anticipate this and do more to counter Chinese disinformation, Karásková urges. Jonathan Kaspar Teacher
Christmastime has arrived at Hong Kong harbor – surrounded by palm trees, visually a bit more tropical than in Europe. The oversized Christmas tree, which somewhat comically towers over the real trees, is part of Christmas Town in the West Kowloon Art Park. Or could this be art?
