Beijing argues that letting go of politics will be good for the Chinese economy in the long run. And that’s a 180-degree turn, agrees Chinese economist Arjen van Dijkhuizen of ABN Amro.
But he can understand China’s initial thinking. “I really think it’s better for China to move away from the zero covid policy in the long run, because it was just unsustainable,” she says. ‘Definitely looking at the acceptance rate of the population. Also witness the protests. In the short term, however, there is a risk of chaos if you look at how things are going now. On both the supply and demand side of the economy.’
Van Dijkhuizen calls China “inadequately prepared” when it comes to vaccinating the most vulnerable part of the population. ‘But also in terms of the ability to care. There will likely be a bumpy road towards the end of covid-zero.”
Aftermath
According to Van Dijkhuizen, this too has some consequences. “Supply issues will continue to play a role in the near term,” she continues. ‘If people get sick and therefore don’t go to work, this will have an impact on production and transport. Also, China celebrates the Chinese New Year at the end of January, during which workers usually go to their families. And this can also lead to interruptions.’
However, the Chinese government is working tirelessly to mitigate these disruptions. Van Dijkhuizen: ‘From a global perspective, it’s a different situation than before the pandemic. Then we saw a disruption in supply, as well as extremely strong demand from the Western world. That demand is now lower due to inflation.’
global balances
He concludes: “The global balance between supply and demand for goods is very different. Container rates – which skyrocketed last year – are already down 80% from last year. That says something.’
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
