China’s zero Covid policy has been set aside for now, with the government easing curbs on lockdowns, mobility, quarantining, testing and running of businesses in the last few days in urban centres and business districts such as Guangzhou, Shanghai, Beijing and Xinjiang. The move is clearly a response to the protests that were sparked off by the November 24 fire at Urumqi town, Xinjiang province, that killed scores of people, as rescue efforts were stymied by lockdown blockades. In a eerie throwback to the Tiananmen Square protests of May 1989, the incident turned into a lightning rod for pro-democracy protests, this time led by the affluent middle-class that has profited from economic growth, with students and others joining in.
Taking the world by surprise, calls for resignation of President Xi Jinping were openly voiced, barely a month after the Chinese Communist Party (CCP) elected him as ‘leader for life’, with no dissident voices in sight. Unlike in 1989, though, there is no 18 per cent inflation (2 per cent now); and there were active factions then in the CCP, led by Zhao Ziyang among the reformists and Li Peng among the conservatives. That said, the lockdown has turned into a lived metaphor for the denial of political freedoms for days on end, at a time when the rest of the world has shrugged aside Covid and resumed normal life and recreation – such as thronging stadiums to watch football. It is just as well that the Chinese authorities have acted on time to defuse some of the anger of a cooped-up populace – unable to freely use social media and access news. The massive state security apparatus swooped in taking away protest leaders to unknown fates. The protests have once again brought to the fore central contradiction in the Chinese State since the days of Deng Xiaoping – one between economic openness and the total absence of individual political freedoms. So long as the economy was doing well, the denial of freedoms to the 700 million middle class did not pose serious problems for the establishment. Covid has upset that delicate balance. Meanwhile, as the protests earlier in Hong Kong have shown, democracy remains a big draw.
That said, it is hard to hazard a guess on the effects of lifting Covid curbs – both in health and economic terms. A spurt in cases and deaths among the 260 million, 60-plus age population could lead to a renewed clampdown, because of the somewhat low vaccination rates in this age-group and the local vaccines proving ineffective. Typically, an authoritarian state cannot be expected to course-correct easily, and import vaccines.
A normalised China can ramp up commodity demand and inflation, even if it leads to improved supply of finished goods. It is expected to grow 3.3 per cent in 2022, 4.6 per cent in 2023 and 4.1 per cent in 2024 (according to OECD, a forecast made before the latest developments). World growth prospects could improve, provided inflation does not get the upper hand. Meanwhile, India should stick to its existing assumptions while framing policy. Its advantage as an open society should not be taken for granted.