Xi and top Chinese leadership to hold key economic meeting as COVID spikes

[December 14, 2022]  By Julie Zhu and Liz Lee

HONG KONG/BEIJING (Reuters) - Chinese President Xi Jinping, his ruling Politburo and senior government officials will meet over the next two days to plot a recovery for China's battered economy just as the nation faces a surge in COVID-19 infections.

The key annual economic policy conference takes place as virus infections spike in the capital Beijing a week after the leadership abandoned its tough "zero-COVID" controls.

The policy had been championed by Xi but last month sparked the most extensive protests under his 10-year presidency.

The closed-door annual Central Economic Work Conference will run from Thursday to Friday, according to three sources with direct knowledge of the matter.
 

Policy insiders and business analysts are watching closely, saying the leadership was likely to chart further stimulus steps and discuss growth targets.

Global investors, already caught off guard by the virus-policy U-turn, now find themselves flying blind into a chaotic post-pandemic transition, lacking proper data to track rising infections and potential threats to the economy in the months ahead.

Economists estimate that China's growth has slowed to around 3% this year, far below the official target of around 5.5%, marking one of China's worst performances in almost half a century.

State media reported late on Tuesday that some 50 people are critically or seriously ill in hospitals in Beijing, while infections are also rising in the cities of Wuhan and Chengdu as well as Hebei province, according to medical staff, social media posts and state press reports.

But exact case numbers have become impossible to track due to lessened testing, and the National Health Commission (NHC) said from Wednesday it would no longer report new asymptomatic COVID-19 infections as it was hard to accurately tally the total count, breaking with a practice it has held for most of the past three years.

China's yuan, on track for its worst year since 1994, when China unified the official and market exchange rates, eased against the dollar on Wednesday with traders also citing worries about a fresh surge of infections.

The increase in the number of cases comes a week after Chinese authorities overturned previously extensive testing and quarantine rules, aligning with a world that has largely reopened three years after COVID emerged.

The elation that met those changes has quickly faded amid mounting signs that China may pay a price for shielding a population that lacks "herd immunity" and has low vaccination rates among the elderly.

'PRICE WE PAY'

The World Health Organization warned of "very tough" times ahead, highlighting wider fears of a wave of infections across a 1.4 billion population.

"It's always very difficult for any country coming out of a situation where you've had very, very tight controls," WHO spokesperson Margaret Harris said in Geneva, adding that China faced a "very tough and difficult time."

A staff wearing a protective suit walks into a fever clinic in Beijing, China December 14, 2022, in this screen grab taken from a Reuters TV video. REUTERS TV via REUTERS

Official COVID case counts in China have been trending lower in recent weeks, but that has coincided with a drop in testing and is increasingly at odds with the situation on the ground.

China has not reported any COVID-related deaths since Dec. 3, before the country started the loosening of curbs.

In the three years since the pandemic erupted in the central Chinese city of Wuhan, China has reported just 5,235 COVID-related deaths - a tiny fraction of its population, and extremely low by global standards.

Long queues outside fever clinics, buildings attached to hospitals that screen for infectious diseases in mainland China, have been a common sight in Beijing and other cities in recent days. National health authorities said that as of Wednesday they have opened over 47,000 fever clinics.

"This is the price we pay for being freer," a 26-year-old surnamed Liu who works in marketing told Reuters on the streets of the capital.

"Now it is essential that we improve our awareness in self-protection. I think now the risk depends on individuals," she added, requesting anonymity.

In Shanghai, China's most populous city, at least seven schools have said they will stop in-person teaching due to COVID cases, with classes going online, according to parents and notices seen by Reuters.

Infections are expected to spread across the country in coming weeks, as some people who have not been able to travel return to home towns and villages.

State media reports on Wednesday said daily traffic flows at the main railway station in the tech hub of Hangzhou had more than doubled to 128,000 as young people headed home.

The mass movement of people will peak going into the Lunar New Year holidays which start on Jan 22, after restrictions on domestic travel for the previous three years.

Already road and air traffic in China, the world's second-biggest oil consumer, has rebounded sharply after the easing, boosting the outlook for fuel demand and supporting crude prices.

Top Chinese health officials have downplayed the threat of the disease and pushed the idea of self-care in recent weeks, a dramatic u-turn from previous messages that the virus had to be eliminated.

The National Health Commission said it would roll out the second COVID-19 vaccine booster shots for high-risk groups and elderly people over 60 years old.

(Reporting by Bernard Orr and Liz Lee in Beijing and Brenda Goh, Casey Hall, Winni Zhou, David Stanway and Shen Yiming in Shanghai; Additional reporting by Xu Jing in Beijing; Writing by John Geddie and Greg Torode; Editing by Simon Cameron-Moore and Raju Gopalakrishnan)

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