AUS
NZ
UK
CA
USA
IND
Highlights
- Since China is a significant part of the world economy; many are worrying if China’s adamant Zero-Covid policy will hurt global growth.
- In January, IMF Chief Kristalina Georgieva suggested that if China doesn’t get rid of the policy, it might damage the global recovery.
- The discussion on the Chinese zero-Covid policy has again come into the limelight as a Bank of Japan’s policymaker recently said that China’s zero-Covid curbs may hurt global growth.
Like many other nations like Australia and New Zealand, China adapted the “zero-Covid” policy as the deadly COVID-19 pandemic entered our lives. However, most countries suspended the policy and moved ahead with the upliftment of restrictions to boost the economic conditions. But China seems to be taking another route. Now, the discussion on China’s zero-Covid policy has come into the limelight; let’s understand why!
What exactly is the zero-Covid policy?
The zero-Covid policy was introduced as the pandemic made its entry. Its basic paradigm suggests the protocol of “find, test, trace, isolate, support”. The idea behind the policy is to retrain the transmission of the virus and its subsequent variants; to do so, countries imposed stringent lockdown restrictions, closure of manufacturing, etc.
GOOD SECTION: RBA Governor: Outlook For Inflation And Wages Remains Uncertain
Understanding the efficacy of the zero-Covid policy
It has been observed that the zero-Covid policy might have been successful in the early stages of the virus’ impact. However, with further mutations, the approach is relatively inefficient. Same was suggested by the WHO chief as he said that countries should lift the travel bans to recover the economies and focus on public health via boosting vaccination drives. Thus, several countries like Australia abandoned the zero-Covid policy and are now moving ahead to bring the old normalcy back.
ALSO READ: Crude oil rises on Fed rate hike worries
So, why is China sticking to the zero-Covid policy?
Despite most countries abandoning the policy, China seems to have no plans of getting rid of the same any time soon. The world’s second largest economy believes that the approach has been tremendously helpful in curbing deaths and the transmission rate of the virus in the demography. China might think that the policy is the most suitable for fighting the pandemic; however, world economists have different views. Since China is a significant part of the world economy; many are worrying if China’s inflexibility with the Zero-Covid policy hurt global growth.
Source: © Ipopba | Megapixl.com
MUST-READ: US inflation spike may weigh on ASX stocks; what can investors do?
Can China’s zero-Covid curbs hurt global growth?
Due to strict restrictions in the country, there has been a substantial impact on the global supply chain. There has been a significant disruption in several China-based factories of top carmakers. Additionally, due to extensive lockdowns, there have been disruptions and delays for the leading chipmakers like Samsung Electronics based in China.
In January, IMF Chief Kristalina Georgieva said that China should relook its zero tolerance for COVID policy. The Chief economist suggested that if China doesn’t get rid of the policy, it might damage overall global recovery. She also pointed out that China’s extensive COVID regulations may burden the Chinese and the global economy.
The discussion on the Chinese zero-Covid policy has again come into the limelight as the Bank of Japan’s policymaker has recently said that China’s zero-Covid curbs may hurt global growth. According to him, the restrictions imposed by China may prolong the disruptions in the supply chain, and thus, the international inflationary pressure may rise.
ALSO READ: Worrying about the stock market crash? Here’s what you could do
Can China’s zero-Covid curbs hurt global growth ?
Bottom line
Conclusively, it is pretty clear that unless China eases out its pandemic-infused restrictions, the world economy might not grow optimally. China’s economy is significant for the production and distribution of goods and services globally. Being a world power, it becomes crucial for the country to join hands with the rest of the world in the revival journey.
