The year is almost over, and one more newsletter before we bid farewell to 2022. This week saw Covid peaking all over China, and more and more signs that it’s all over. Or nearly. The borders will be quarantine and lockdown-free from January 8. But people who return to the most infected country on the planet on, say, January 3? They still go through it, it would seem. This is, after all, the country that invented bureaucracy.
It’s clear that there is an enormous appetite right now among Chinese people to get out and visit other parts of the world, and a flight from China landing in Milan this week had 52% of the passengers testing positive. BUT in all cases it was just standard Omicron, no nasty new China strains. Will it be a return to the glory days of the mid-2010s when Chinese tourists dominated everywhere? Maybe not. The economy is down, people are more wary about travel in general, and aware of the ever-greater negative perceptions, right or wrong, attached to the idea of China/Chinese.
And the economy? Things are mega subdued right now, and while there is much talk of a post-Covid bounce, we will just have to wait and see. How to get consumers to spend and private companies to invest, that is the big question. The Q4 numbers are going to be awful. The new year will see percentage jumps simply because of the dire base numbers from 2022, but exports, consumer spending and FDI will all likely be in the doldrums, and pumping up property and infrastructure at the national and local levels is not the answer.
The best explanation we have seen for the sequence of events leading us to this situation is that they realised the economy was tanking and they had to abandon zero-covid sooner rather than later. The advantage of rushing it in spite of a lack of preparation and insufficient medical supplies was that it could all be pinned on the outgoing team, while the new team chosen at the big 20 and due to be installed at the NPC session in March can start with a clean slate. Sounds plausible…
Anyway, happy new year to all our readers!