China's strict COVID-19 policy is weighing on consumption and rattling foreign firms, but its effectiveness and the imperative to maintain stability heading into a sensitive year mean Beijing will stick to its approach, experts say.
Two recent studies showed antibody response from the two vaccines was weaker against Omicron than against some older versions of the virus, but it remains unclear how the variant would affect the vaccines' overall effectiveness.The COVID-19 policies are credited with helping the country's industrial sector by preventing widespread factory shutdowns and keeping the export machine humming.
Retail sales rose just 3.9% in November, well below pre-pandemic trends. The catering and hospitality sectors have been hit particularly hard."Nowadays the approach is a net negative for the economy," said Kuijs, noting that other highly vaccinated countries have moved to a "living with COVID" approach that makes growth increasingly resilient to new outbreaks and variants.
"In a worst-case scenario we fear there may not be meaningful change until late 2022, or even into 2023," said Joerg Wuttke, president of the European Chamber of Commerce in China. China, where the pandemic first emerged in the central city of Wuhan, has officially reported just 4,636 deaths, well below many other countries and a tiny fraction of its population, and relatively few in the country of 1.41 billion have been infected.