China ditches zero-Covid strategy to stimulate growth as trade figures plummet

Wed 7 Dec 2022
Posted by: Phillip Adnett
Trade News

China trade - Covid zero policy ease

China has announced measures to ease its strict zero-Covid regime as its trade figures suffer the worst fall in more than two years.

Its National Health Commission made a 10-point announcement on Wednesday, heralding a more lenient approach to policing Covid than in the past.

If testing positive, citizens will be able to isolate at home, while lockdowns will be limited to individual apartment floors and buildings rather than entire districts and neighbourhoods, reports ITV.

Living with Covid

According to the BBC, the changes indicate China is finally moving away from its zero-Covid policy and looking to “live with the virus”, despite the country grappling with its biggest wave of infections, amounting to more than 30,000 each day.

The country has seen recent protests over ongoing restrictions, and the new measures coincide with a meeting of the Chinese Communist party’s politburo that emphasised the importance of stabilising the economy rather than the battle against Covid, reports the FT.

Exports dive

China’s exports and imports shrank at their steepest pace in at least two-and-a-half years in November, due to weak global and domestic demand.

Exports contracted 8.7% in November from a year earlier, a sharper fall from a 0.3% loss in October and well below analysts’ expectations for a 3.5% decline. Economists are predicting a further period of declining exports, reports Reuters.

However, analysts have cautioned that a quick reopening is unlikely given the country’s poor vaccine coverage among the elderly.

Government plans

Only 40% of Chinese over the age of 80 have received a third dose of the vaccine, and Beijing has unveiled plans to vaccinate millions of Chinese pensioners, reports Al-Jazeera.

According to the bank ING’s analysis, China’s trade position is more nuanced with growth in some regions, such as ASEAN, which grew 2.9% year-on-year in November.

China’s exports to Europe, another big destination grew 1.5% YoY, but exports to the US fell 13.2%.