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Analysis:

China expects Omicron’s Specter

China expects Omicron’s Specter …

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James Palmer

The Chinese city of Xian is completely cordoned off. More than 13 million people are locked in their homes with the windows closed as the city sprays disinfectant and runs mass tests amid a multitude of COVID-19 cases. The 150 local cases reported for Sunday are a tiny number compared to those in the rest of the world; however, they represent a potential catastrophe in a nation that has successfully maintained a “zero COVID” policy since the first outbreak.

It is not clear whether the Xian cases were the Omicron Variant, but it’s pretty likely as they have spread faster than any other outbreak in China since the first Wuhan expansion was contained. Whether China can hold its ground against an opponent moving faster than ever is a big question. Some of Western coverage had a gleeful tone, as if China’s COVID-19 success was finally being drawn to earth. But with hundreds of thousands of lives potentially at stake, the way the system handles omicrones will shape many of China – and the world – in 2022.

One scenario is that Omicron is so transmissible – almost as fast as measles – that China’s precautionary measures simply cannot withstand it, no matter how extensive the quarantine of Chinese leaders across the country is. At some point, the virus escapes containment and then spreads quickly and far enough that even China’s ultra-strict lockdowns cannot eradicate it. Over the coming months, the number of cases of omicronen in this scenario will rise to millions or tens of millions.

The Chinese city of Xian is completely sealed off. More than 13 million people are locked in their homes with the windows closed as the city sprays disinfectant and runs mass tests amid a multitude of COVID-19 cases. The 150 local cases reported for Sunday are a tiny number compared to those in the rest of the world; however, they represent a potential catastrophe in a nation that has successfully maintained a “zero COVID” policy since the first outbreak.

It is not clear whether the Xian cases were the Omicron Variant, but it’s pretty likely as they have spread faster than any other outbreak in China since the first Wuhan expansion was contained. Whether China can hold its ground against an opponent moving faster than ever is a big question. Some of Western coverage had a gleeful tone, as if China’s COVID-19 success was finally being drawn to earth. But with hundreds of thousands of lives potentially at stake, the way the system handles omicrones will shape many of China – and the world – in 2022.

One scenario is that Omicron is so transmissible – almost as fast as measles – that China’s precautionary measures simply cannot withstand it, no matter how extensive the quarantine of Chinese leaders across the country is. At some point, the virus escapes containment and then spreads quickly and far enough that even China’s ultra-strict lockdowns cannot eradicate it. Over the next few months, the number of cases of Omicron in this scenario will rise to millions or tens of millions.

A best-case scenario is that Omicron as a baseline is less fatal, even for the unvaccinated. In South Africa and Denmark, cases rose and fell rapidly without increasing hospital admissions or deaths. But Denmark has a very high vaccination rate, and South Africa has had three previous waves of COVID-19; the same results may not apply to a relatively pristine Chinese population. The official claims state that China has only had 101,000 COVID-19 cases in total – a drop in the bucket of 1.4 billion people. Even assuming the official numbers during the first outbreak were a significant and likely deliberate undercount, for example a million cases in a country with a population as large as China would still be insignificant.

What happens next depends on the level of protection offered by China’s vaccines against Omicron. Although the mRNA vaccines used in the West were not as effective against omicron transmission compared to previous variants, they still offer strong protection against hospitalization and death – especially with a booster. The data on the Chinese vaccines are so far very incomplete, but early studies, even on booster vaccines, are not promising.

Even in a vaccinated population, a recent (but pre-omicron) Chinese study estimates an outbreak on the order of that in the United Kingdom or the United States could cause more than 10,000 or 20,000 serious cases per day. Much would then depend on the resources and experience of the hospital. China managed to cope with the Wuhan outbreak in part because of its ability to divert medical resources from across the country to the affected city. A super-spreading omicron that would hit the whole country within a few weeks would be a nightmare – especially considering that Chinese doctors, despite being world leaders in early treatment, don’t have nearly two years of experience dealing with COVID-19 that clinicians in other countries have.

If Omicron got out of hand, there would be an initial, sweeping lockdown of the same magnitude as was imposed in late January 2020 during the first outbreak. That would buy time and potentially save many lives – albeit at significant economic and social costs, as with the previous lockdown. However, given Omicron’s portability, easing the lockdown would be even more difficult – and more outbreaks likely to occur. Moving to a scenario in which COVID-19 is increasingly being treated as an endemic disease, as is now happening in other countries, would be an extremely difficult political decision that would have to be made by Chinese President Xi Jinping himself.

Besides that Public health disaster would have resulted in a psychological shock with geopolitical consequences. China is rightly proud of its successful response to the coronavirus (though it goes unmentioned responsibility for covering up the first outbreak). Much glee was also expressed about the disasters in other parts of the world. A serious outbreak would call all of that into question.

The likely response would be to triple the debt to the United States. Fort Detrick’s conspiracy theory, which baselessly claims that the virus is the US Army’s fault, is mainstream in China, is considered an accepted fact by the state media, and is taught in elementary schools, according to my friends with young children. China has spread the theory online worldwide, with little effect, but it appears, as we can see, to be believed by many domestically – there is little resistance to the idea online. That’s bad enough the way things are; if the United States were blamed for the mass death in China, relations between the two superpowers could hit new lows.

I’ve outlined best and worst case scenarios, but here is the slightly more likely outcome. The COVID-19 restrictions apply – but are pushing the lockdown and quarantine system to its limits. Case numbers hit the low thousands in certain cities, but mass testing and bans are preventing wider outbreaks.

I think those predicting inevitable failure may underestimate how far China will go to keep the virus out. The country’s lockdowns were wider and more strictly enforced than anywhere else in the world, aided by overlapping systems of both electronic and human surveillance. No one enforces small rules better than curious, usually retired neighbors who are part of China’s “residents’ committees”; At the same time, these intensive networks can also be used to ensure that people in lockdown receive food and medical help. Above all, there is a total willingness to use state power and invent new rules – without restricting the power of the government – in order to do whatever is necessary to achieve the ultimate goal.

The middle ground still brings many problems himself. China has had regular lockdowns in certain cities and towns for the past two years, but these will have to become much more frequent to keep Omicron out. This comes at a high economic cost, both to keep businesses in the affected areas and because of the uncertainty it means for the rest of the economy. And since Omicron (and possibly its successors) are likely to be endemic to the rest of the world, there is no clear end point – until the Chinese government is convinced enough of the quality of the boosters and treatment to take the risk of the virus invading, which could take years.

Many local Chinese governments are already facing financial problems, not only because of the debt burden but also trying to pay off routine expenses. The huge stimulus package of 2020 helped a lot, but a similar amount of spending might be required to keep things going – especially given the ongoing housing crisis. Every lockdown is associated with a price tag.

Above all, however, this will affect China’s trade – and with it the global supply chain. Delays in Chinese ports due to COVID-19 regulations were a major contributor to traffic jams in late 2020, which have calmed down somewhat but are still holding back key industries like the automotive sector. Turnaround times increased from 12 hours before the pandemic to 16 days in major ports such as Shanghai. The increased precautionary measures are already making this worse; One Delta flight literally turned in the air as the company said it couldn’t afford to adhere to the new measures. Chinese flights are being canceled in large numbers both domestically and internationally, with airlines canceling more than 2,000 last Friday through Sunday. The closer China closes its gates, the more intolerable its role as the world’s factory becomes.

Finally, there are two upcoming events that are at great risk from omicron. The first is the annual Spring Festival travel season known as Chunyun, when hundreds of millions of people typically travel across China to see their families. I currently suspect that the Spring Festival trips, which this year would normally be most intense in the first week of February (the Chinese New Year itself is February 1st), will be canceled entirely, or at best seriously, by the government. That’s a blow to Chinese families – and to the economy, which usually gets a big boost from spending and traveling this week.

But more importantly from a leadership perspective, the Beijing Winter Olympics, which are held in the same week as Chunyun begin. The NHL has already withdrawn from the Olympics, citing the Omicron risk. Current policy is to allow vaccinated athletes without quarantine, but given the effectiveness of Omicron in infecting the vaccinated, this does not seem sustainable. Instead, China is expected to have at least a two-week quarantine period for foreign athletes ahead of the Olympics – during which time it would be extremely difficult for them to train. Without this, however, there is a risk of a severe omicron outbreak in the athletes themselves. And one thing is certain: don’t expect Xi to shake hands with either of them.

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