China, the country
where the first case of COVID-19 was detected in the world, is seeing its worst
viral outbreak since Wuhan. Thousands of people are under lockdown and the
virus is starting to affect the coffers of the second-largest economy in the
world. At such a time, even President Xi Jinping is thinking of minimizing the
economic impact of COVID-19.

This, if not
surprising, is certainly novel, because China has consistently attempted to thwart
the virus through its COVID-zero strategy without much consideration for its
economic impact, until now.

China will strive
to achieve the maximum prevention and control effect at the least cost, Xi
Jinping said, at a politburo standing committee meeting recently, reports
Bloomberg. This focus on minimising the impact on economic and social development
is new.

Further, at a
meeting of China’s top financial policy committee, a vow was made to stabilise
financial markets and stimulate the economy. The committee said the COVID
policy needed to be tweaked in order to minimise disruption for businesses.

With 2023 being a
critical year of Xi Jinping as it will decide if the 68-year-old leader will serve
another term in office, China observers say the country is only meaningfully
going to ease up next year. China will first eliminate infections and then
adjust its virus control strategies, said Bruce Pang, head of macro and
strategy research at China Renaissance Securities Hong Kong Ltd.  

The latest round of
lockdowns has had a significant impact on Chinese industry. Temporary factory shutdowns
have been reported by iPhone maker Foxconn Technology Group and Toyota Motor
Corp. Morgan Stanley and UBS Group AG have downgraded China’s growth forecast for
the year.

Xi said China
should “maintain the stability and order of the people’s normal production and
life, do a good job in the production and supply of daily necessities, and
ensure people’s medical needs.”  China further said that people need to be made aware of the benefits of vaccination. He called for a step up in public education, technological research and development of vaccines.