China Is Killing Its Own Economy For Political Reasons. This Won’t End Soon.

We’ve written extensively about China’s Dynamic Zero Covid policy and how it’s wrecking its economy. Still, the story keeps getting worse and demands more time and attention.

The Dynamic Zero Covid policy was invented by Chairman Xi Jinping of Communist China and relies on public health officials, city officials, police and Communist Party cadres for its full implementation. Under the policy, a single case of COVID can result in an entire building being placed under quarantine.

Multiple cases in a single neighborhood will result in the entire section of town being placed under quarantine. More than ten cases or so can result in an entire city being locked down. This applies to the biggest cities in China including Shanghai (population 26 million) and Beijing (population 22 million).

These lockdowns are more than an inconvenience; they’re extreme. Tens of thousands of those in contact with the infected are physically relocated to COVID concentration camps on the outskirts of the cities. Anyone seen on the streets is arrested on sight. Transportation linkages into and out of the cities are shut down, except for the few who have special permission to travel. For those allowed out to perform essential services, testing centers are set up on street corners every few blocks and tests are administered daily.

No sooner does one city come out of a lockdown than another city becomes the victim of a new lockdown as reported here. China says this is all necessary to “defeat” the virus. But that’s absurd.

The SARS-CoV-2 virus that causes COVID is highly infectious and is airborne, so it goes where it wants. No amount of testing or lockdowns will stop the spread. The official Chinese vaccine from Sinovac does not stop infection or the spread of the disease (neither do the Pfizer or Moderna vaccines we use), so that’s not a factor.

The real problem is that the Chinese have not reached the stage of herd immunity. The best vaccine is the disease itself. Cases are usually mild or symptomatic and the antibodies that result are the best defense against getting the disease again or spreading it. Since the Chinese use extreme lockdowns, they don’t achieve herd immunity and they can’t get past the pandemic in the way that the U.S., Europe, and others already have.

China is destroying its economy in this losing game of Whac-a-Mole. Factories are closed during lockdowns, supply chains are disrupted by shutdowns in transportation lanes, and productivity is crushed by the time spent in lines for testing or in the concentration camps.

Why does China persist in such a pointless and costly effort? The unspoken reason is that Chairman Xi is scheduled to be appointed to an unprecedented third term as President this November at the 20^th National Party Congress.

Xi does not want to admit defeat by COVID and does not want to embarrass himself by admitting his policy was wrong. So he persists at great cost. This is how ideology trumps science and common sense. The losers are the Chinese people – and investors in China.

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