Chinese Think Tank Challenges Zero-COVID and Warns of Economic Stagnation

A worker in a protective suit walks on a closed bridge during lockdown in Shanghai, China, on May 18, 2022. (Aly Song/Reuters)

A Chinese think tank openly challenged Beijing’s strict zero-COVID measures with an online post on Chinese social media WeChat and Weibo that warned the policy would cause an “economic stall.”

The Anbound Research Center said, “Preventing the risk of economic stall should be the priority task,” in a report titled, “It’s Time for China to Adjust Its Virus Control and Prevention Policies,” on Aug. 28.

“China’s economy is at risk of stalling” due to the “impact of epidemic prevention and control policies,” the think tank said. But, the post was removed the next day, according to an Associated Press report.

However, this online post could be a sequel to Anbound’s reports warning of the Chinese economic stagnation.

Beijing’s Challenge

On Aug. 14, the think tank published a briefing addressing China’s goals of controlling COVID-19 while stabilizing the economy, and ensuring development.

It stated that “stagnation” describes the reality that is happening in China right now, a consequence of the “country’s strict measures in response to the outbreaks of the COVID-19 cases.”

With the imposition of “static management,” as such a lockdown measure is called, the disruption it caused to economic activities and the losses incurred because of it may be no less than those that result from a war, said the report.

Affected by the impact of the pandemic, China’s GDP growth rate in the first half of the year was only 2.5 percent.

The report emphasized that in the second half of the year, China needs to strike a balance between COVID-19 measures and economic recovery. If the mistakes of the first half of the year are repeated in the second half, the Chinese economy will be hit hard even in the absence of war.

“Mere strict implementation of ’static management‘ and ’one-size-fits-all lockdown' would not be good policy practice,” the report said.

People ride bicycles on a street with little traffic in the Central Business District in Beijing, China, on May 14, 2022. (Ryan Woo/Reuters)

Local Government’s Share

Three days later, an Anbound article addressed Premier Li Keqiang’s recent call to provinces of major economic significance to “shoulder greater responsibilities.”

The article pointed out that the central government obviously was pressured to rely on local governments to take the initiative to “achieve the expected goals of economic and social development.” However, these economic powerhouse provinces, mainly in the eastern region of China, have been hit hard by the pandemic.

Thus, the unprecedented pressure on China’s economy and finances is worse in the eastern region of China. Therefore, “its economic recovery becomes slow, with their growth foundation being less than solid,” Anbound concluded.

Anbound, founded in 1993, is a consulting firm that has served the regime’s Central Financial and Economic Leading Group and provided research and policy advice since 1998. It has seven local offices in China, according to its official website.