China’s ‘Zero COVID’ Strategy Is Spooking Investors

China’s ‘Zero COVID’ Strategy Is Spooking Investors
A man walks past a bank’s electronic board showing the share index at the Hong Kong Stock Exchange, April 12, 2022 (AP photo by Vincent Yu).

A number of prominent economists and business leaders are sounding the alarm over China’s “zero COVID” coronavirus strategy, painting a gloomy outlook for China’s economy. The government-imposed extended lockdowns and isolation periods to stamp out every outbreak of the virus in cities around the country are creating economic uncertainties and casting doubt on Beijing’s ability to reach its target of 5.5 percent economic growth in 2022.

Beijing’s continued ambiguity regarding its position on the conflict in Ukraine, in which it professes to be neutral, is also worsening its already tense relationship with the U.S., while straining ties with the European Union. Any shift toward providing active support to Moscow would open China up to the risk of being slapped with sanctions similar to those placed on Russia in the aftermath of its invasion of Ukraine.

But above all, the restrictive pandemic measures reveal the downsides of Beijing’s rigid political system under President Xi Jinping’s rule.

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