China Eases Covid Restrictions Again In Preparation For Economic Recovery

The Chinese government issued sweeping changes to ease its Covid-related restrictions on Wednesday, a move that signals the country is preparing to live with the virus after three years of strict controls that have increasingly made it a global outlier and weakened its economy.

The National Health Commission published 10 new measures this afternoon as part of its latest virus policy that will now allow asymptomatic patients as well as those with mild symptoms to quarantine at home. The central government in Beijing has also scrapped testing requirements for domestic travelers, banned local officials against prolonged lockdowns, while vowing to boost vaccination rates among senior citizens in its latest policy step.

The adjustments represent a “proactive optimization” taken to reflect the characteristics of the current virus strain, officials said during a press conference that was livestreamed on the same day. They point to the less severe Omicron variant as one reason for the loosening, and said virus control is now entering a “new phase.”

The commission’s announcement comes on the heels of recent adjustments in Beijing and Shanghai, where residents are no longer required to show PCR test results in order to take public transport or enter outdoor venues like parks and tourist attractions. Just last month, China had also announced the easing of Covid controls that included cutting quarantine periods for international travelers and close contacts of confirmed cases, while also scrapping a so-called circuit-breaker mechanism that punishes airlines for bringing confirmed cases into the country.

The rolling back of the restrictions comes as leaders vow to boost growth. China’s Politburo, the country’s top decision-making body, emphasized in a meeting presided over by President Xi Jinping that it would “push for an overall turnaround in the economy” next year, according to a report from the official Xinhua News Agency, which was also published on Wednesday. The leadership said it would implement active fiscal and prudent monetary policies, and boost internal consumption as well as market confidence.

Interestingly, the report made no mention of China’s “dynamic zero Covid” policy, which had resulted in a series of mass lockdowns and other stringent movement restrictions to weed out Covid. The measures became a major disruption to supply chains, caused economic hardship across countless industries, and even led to widespread protests in a country that otherwise rarely experiences public displays of discontent.

China’s economic activity contracted further in November, with indexes measuring both the industrial and service sectors registering bigger declines than economists had initially expected. In a research note dated November 29, Nomura economists led by Lu Ting issued a forecast for the country’s gross domestic product that predicts growth of 2.4% year-over-year in the fourth quarter, and 4% in 2023, which is lower than consensus estimates of 3.9% and 4.9%, respectively.