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China navigates a COVID surge after shifting away from draconian restrictions

ROB SCHMITZ, HOST:

China is facing a massive COVID surge. Three weeks ago, China abruptly shifted away from its controversial "zero-COVID" restrictions that had locked down cities for weeks. Those restrictions had been synonymous with Xi Jinping, and chants at protests targeted the leader.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED PROTESTERS: (Non-English language spoken)...

UNIDENTIFIED PROTESTER: Xi Jinping.

UNIDENTIFIED PROTESTERS: (Non-English language spoken)...

UNIDENTIFIED PROTESTER: Xi Jinping.

UNIDENTIFIED PROTESTERS: (Non-English language spoken)...

UNIDENTIFIED PROTESTER: Xi Jinping.

UNIDENTIFIED PROTESTERS: (Non-English language spoken)...

UNIDENTIFIED PROTESTER: Xi Jinping.

UNIDENTIFIED PROTESTERS: (Non-English language spoken)...

UNIDENTIFIED PROTESTER: Xi Jinping.

SCHMITZ: That's the sound of protesters in Shanghai chanting, down with Xi Jinping. Joining us via Skype is Bill Bishop, author of the newsletter Sinocism, which analyzes current affairs in China.

Good morning, Bill.

BILL BISHOP: Good morning.

SCHMITZ: Xi Jinping is meeting with senior officials this week to devise new plans for economic recovery. Just three weeks ago, we had protesters calling on Xi and the Communist Party to step down. The government seems to have done away with much of the "zero-COVID" policy. Is this a sign that Xi Jinping has caved in to what protesters wanted?

BISHOP: I think it's more a sign that the Communist Party caved into the reality of omicron. You know, their policies worked pretty well for the first couple of years. But since omicron has taken over as a main variant, their sort of draconian approach to dealing with COVID just was failing. And so the protests - you know, the government was already - had efforts underway to start figuring out how to reopen and were already making signals that reopening of some form was coming. The protests, I think, were more of a crystallization of how frustrated people - so many people in China became over the last few months because of all the controls, and frankly because the economy was cratering and is cratering

SCHMITZ: Now, Chinese health officials predict 800 million people could become infected in the next few months, which is stunning. I mean, you and I both lived in China for years, and we know the limitations of...

BISHOP: Yes.

SCHMITZ: ...China's health care system. How do you think this will impact China, both from a health standpoint and economically?

BISHOP: So from a health standpoint, it's going to be, I think, very lumpy and potentially quite devastating in some places. Right now, the biggest outbreak appears to be Beijing, where, again, they stop reporting official data. And, you know, the - plenty people said the official data may have had problems. Now there's basically no data. So anecdotally, though...

SCHMITZ: Wow.

BISHOP: ...It sounds like it could be millions of people in Beijing have already gotten it. Beijing has the best health care in China. And so if Beijing is probably going to be able to weather a massive surge and even if the vast majority of cases are mild - or as one of their leading experts yesterday said, we should really rename it coronavirus cold, as part of this - these propaganda efforts to downplay how severe the disease can be - the - as you get out into other cities and get into the rural areas of China, I think it could get quite messy. I mean, we're right on the cusp of the annual Lunar New Year migration, where you have...

SCHMITZ: Right.

BISHOP: ...Tens of millions of people traveling home. So you're going to have massive spreading throughout the country. So we really all should hope that this is a much weaker virus - a much weaker variant.

SCHMITZ: So obviously, the rest of the world still depends on China for much of the global supply chain. How do you think this will impact the global economy?

BISHOP: Well, I think one of the reasons they reopened so quickly was that the supply chains were being dramatically stressed and were causing more and more companies to think they needed to hedge out of China and find other places for supply chains. So I think what's probably going to happen is you're going to see a lot more talk about supportive policies in the next days and weeks. And next year will likely be quite a lot of policy support. And so we may see the kind of rebound that we saw in the U.S. coming out of COVID in - maybe starting in the second quarter of next year, which could actually, some people say, could then reignite some of the inflation of the rest of the world.

SCHMITZ: That's Bill Bishop. He writes the newsletter Sinocism about current affairs in China.

Bill, thank you.

BISHOP: Thank you. Transcript provided by NPR, Copyright NPR.