Source: “Chinese flag with Covid-19 vaccine” by wuestenigel is licensed under CC BY 2.0
The 2022 Beijing Winter Olympics are particularly important for China and for its leader, President Xi Jinping. The spectacular 2008 Summer Olympics were seen as China’s “coming out party,” a vibrant showcase for the successes of three decades of “reform and opening” and the country’s newfound national confidence and wealth. In a similar fashion, the 2022 Olympic games represent an opportunity for President Xi to demonstrate his successes in office. Perhaps chief among his accomplishments is the highly effective domestic management of the Covid-19 pandemic. The Olympics and the Omicron variant of Covid-19 pose a major source of risk to this success.
“Zero-Covid” in China
Key to President Xi’s approach to the pandemic is the popular, if increasingly tenuous, “zero-Covid” policy. China has operated under this policy since the end of the country’s first wave of the virus in the winter of 2019-2020. Despite a very high vaccination rate, China’s government has thus far aimed to prevent essentially all local transmission of the virus, and to dramatically reduce cases from international travel. Pursuant to this policy, local and provincial governments have instituted lengthy travel quarantines, strict lockdowns of major cities, internal travel restrictions, and testing of 100,000 visitors to Shanghai Disneyland over a single reported case in October 2021.
While occasionally intrusive, the policy has proven effective. At approximately 116,000 as of writing, China’s cumulative Covid-19 case numbers are comparable to those of Luxembourg at 108,000, and well below those of Western countries like the United States, at 57,000,000. The relative lack of local transmission has allowed the country to return to a state of normalcy sooner than the rest of the world, with industries operating at full capacity for most of 2020 and 2021. McKinsey research confirms that countries that kept Covid-19 cases closest to zero saw the fastest initial economic recovery in 2020. The speed of this return to normalcy proved important to the world economy in this time as well, with China’s manufacturing recovery serving as one of the key drivers of the global economic rally. For this reason, the success of “zero-Covid” has proven very popular and forms a pillar of Xi Jinping’s Covid-19 messaging at home and abroad. The policy serves as a key source of legitimacy for Beijing and for local and provincial governments around the country.
The Omicron Variant, and Why it Matters to Beijing
The importance of “zero-Covid” means that the omicron variant of Covid-19 poses a significant risk to China’s government and investors alike in 2022. Omicron is more transmissible than the Alpha or Delta variants of the virus, and possibly less severe. In places where the new variant has taken hold, it has spread quickly and become the dominant variant, leading to high case rates but lower hospitalization and death rates than other variants. This directly shifts the risks inherent to a “zero-Covid” policy. The high rate of transmission from Omicron increases the need for dramatic shutdowns which reduce economic output and lead to local hardship and dissatisfaction. Meanwhile, the payoff of the policy is reduced. With lower rates of severe outcomes from infection among vaccinated individuals, the likelihood of scenes like those in Wuhan in early 2020, with hospitals overflowing with patients, is reduced with Omicron.
In determining the future of “zero-Covid,” Xi and the Party will have to consider the effectiveness of Chinese vaccines at preventing transmission as well as mild, and severe cases. The effectiveness of the Chinese vaccines does appear to be waning, however, with SinoVac’s CoronaVac unable to “provide enough antibodies to neutralize Omicron.” Even prior to the emergence of the new variant, this led to outbreaks in countries where these vaccines have been widely distributed, although death and hospitalization rates in these countries remained low. Indeed, studies indicate that while less effective than mRNA vaccines at preventing infection, Chinese manufactured vaccines remain effective at preventing severe outcomes. The effectiveness of the vaccines used in China only exacerbates the Omicron dilemma.
Another key factor to President Xi’s “zero-Covid” calculus will be public opinion and messaging. Omicron poses two competing sources of risk for Xi and the government, effectively raising the stakes of whatever decision is made. With a variant capable of rapid transmission, and lockdowns becoming more commonplace and possibly more intense, dissatisfaction with the policy is likely to rise. At the same time, Xi and the Party will feel pressure to maintain “zero-Covid,” which is currently rather popular and crucial to China’s domestic and foreign narrative of having defeated the virus. Either widespread protest and suppression, or uncontrolled viral transmission would be a bad look ahead of this year’s 20th Party Congress, at which top party officials will be selected. A bad Covid-19 outcome could potentially threaten Xi’s personal tenure in office. The stakes are high for Beijing.
Enter: the Olympics. In February 2022, the city of Beijing will host the Winter Olympic Games, inviting thousands of athletes from around the world to China’s capital. Current plans are to keep all athletes, visitors, judges, and support staff in a “closed loop” between the Olympic village and other venues. Local visitors will not be allowed into the loop, and it will remain apart from the rest of the country. Most athletes will need to be vaccinated, and additional distancing and air-purification measures will be taken inside the loop. Testing will be frequent, and community transmission will be met with quarantines. Outside the loop, Beijing has reduced internal travel to the city in preparation. Measures are tight, but the scale of the event and the high transmission rate of Omicron may well prove unmanageable.
What Will China Do?
China’s “zero-Covid” policy stands at a crossroads in early 2022, and with it stands President Xi Jinping’s record of success regarding Covid-19. If the policy is altered, China’s pandemic experience could look more like that of the West, with smaller local disruptions, at the cost of a shattered sense of immunity to the virus. If the policy remains, the lockdowns will inevitably intensify, threatening larger disruptions to society and the economy. Already, Omicron is surging in several regions in China, increasing the frequency of local disruptions. The major port city of Tianjin joined Xi’an with a partial lockdown in January, and Omicron has spread in other areas of the country. Indeed, risk consultancy Eurasia Group has rated China’s “zero-Covid” policy as the single greatest source of political risk in 2022.
Eurasia Group sees the policy as doomed, but it is a realistic possibility that the measures can succeed. The pairing of nationalistic messaging with new lockdown measures, for example, may mitigate social resistance well enough to maintain support. Whatever the outcome, the Omicron variant completely upends the existing logic of “zero-Covid.”