Goldman says China will stick to Covid Zero even after Communist Party meeting

(Bloomberg) — Goldman Sachs Group Inc. sees China sticking to its zero-tolerance approach to Covid-19 after a key Communist Party meeting next month, with the bank’s economists downplaying expectations of any major policy changes soon after the conference.

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Stability will be the dominant narrative ahead of a meeting of China’s top leaders, where President Xi Jinping is expected to secure a record third term, economists including Goldman’s China head Hui Shan wrote in a report published on Tuesday. That’s why Covid containment measures, especially around the capital, have been stepped up in recent days, they said, with areas near Beijing locked down, rules on virus testing tightened and domestic travel discouraged next month.

The summit every five years will focus mainly on reshaping the party leadership, Goldman economists wrote, with a shift away from Covid Zero — China’s ongoing strategy to contain the virus with lockdowns, mass testing and border controls — – probably after the annual National People’s Congress sometime in the first half of next year.

China watchers have been slowly downplaying expectations of breaking Covid Zero, with Xi stressing his commitment to the approach in recent months and officials imposing more lockdowns this year than at any other time during the pandemic. While countries like Singapore and New Zealand used to seek to eradicate the virus, they have since turned to living with it like the US and Europe, leaving China increasingly isolated as it continues to prioritize preventing deaths at all costs.

Disruptive Strategy

Some experts see China sticking with the disruptive strategy for the long term, given the country’s low elderly vaccination rates and less effective Covid vaccinations.

China’s Covid Zero could last years because it works for Xi

China reported 915 new Covid cases for Monday, marking below 1,000 infections for a second day. That included 16 in Beijing, where there have been outbreaks at several colleges and a high school in recent days. All the cases in the capital were already in quarantine. China is isolating all Covid infections and their close contacts as a way to stop community transmission, a strategy that was perfected during the original Wuhan outbreak and is still being pursued.

With more than 2,000 delegates set to descend on Beijing for the October 16 conference, authorities are taking no chances with Covid. A district of Shijiazhuang, capital of neighboring Hebei province, was locked down from 6 a.m. local time on Tuesday, and the Sanhe district will also be under a stay-at-home order after a resident tested positive for the virus.

Other parts of China, from areas in Xinjiang in the northwest to Guiyang, a city of about 6 million people in the south, are also under lockdown and subject to repeated mass testing efforts. Testing has become central to China maintaining Covid Zero, with negative tests required to enter workplaces, public transport and even parks in some parts of the country. The megacity of Chengdu in the southwest, home to about 21 million people, also remains largely under lockdown.

China plans Covid Zero years with testing around every corner

China’s virus czar, Vice Premier Sun Chunlan, echoed Xi’s line at a meeting of the national Covid task force on Friday, saying the country’s main goal right now was to prevent major outbreaks and ensure economic stability , especially before the conference. After the meeting, China’s provincial and city governments held teleconferences to reinforce messages over the weekend.

Big take: China destroyed Covid. But Covid Zero could crush China

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