onsdag 7. desember 2022

Chinese economic growth may never recover from COVID – here’s why

Many countries have had to navigate the balancing act of keeping the economy alive versus protecting citizens from COVID in recent years. In China, patience with its zero-COVID policy – one of the world’s toughest strategies for dealing with the pandemic – are wearing thin among workers and students. Sporadic protests have erupted all over China in recent weeks, triggered by the deaths of ten people in a fire in an apartment block in Ürümchi, Xinjiang in November.

But even with signs that restrictions are starting to relax across the country, the impact on the economy will not be as straightforward as the Chinese government might hope. The conundrum for China is that the state has promised its citizens safety from the virus through its zero-COVID policy, which has led to large sections of the vulnerable populationbeing unvaccinated. No government wants to concede it may have been wrong about something, but it’s particularly important for the credibility of the social contract between the Chinese Communist Party and the people. The authorities guarantee social and economic stability and the freedom to get rich, in exchange for absolute power.

But with the slowing of China’s GDP growth, rising graduate unemployment (youth unemployment reached 20% in July), and increasing economic hardship, China’s social contract is starting to unravel.