What does the end of Zero-Covid spell for China?

What does the end of Zero-Covid spell for China?

Plus: Australia’s back on ministerial speaking terms with China, ASEAN deepens ties with the EU, and the UN takes a big step towards protecting nature

Hi there Intriguer. Ukrainian President Volodymyr Zelensky is expected to travel to Washington DC to meet US President Biden in a trip the New York Times described as “risky”. Zelensky will use the opportunity to pitch the soon-to-be-Republican-controlled Congress on the importance of continued US military aid. If he makes the journey – his trip’s not officially confirmed – it will be the first time he has left Ukraine since the war began 301 days ago. 

Today’s briefing is a ~4.8 min read:

  • 🦠 China’s pivot: What the end of Zero-Covid means for China and the world.
  • ➕ Plus: Australia’s back on ministerial speaking terms with China, ASEAN deepens ties with the EU, and the UN takes a big step towards protecting nature.

👋 Don’t miss our ‘2022 Year in Review’ newsletter dropping tomorrow! We’ll be back to regularly scheduled programming on 9 January. Happy holidays to all!


What does China’s rapid reopening mean?

In brief:

  • Chinese authorities have unofficially declared the end of China’s Zero-Covid policy and reversed several pandemic control measures.
  • While analysts expect China’s economy to improve, the shift will likely put China’s healthcare and medical system under severe stress.

China’s doors are reopening.

The Covid u-turn

China went from zero (Covid) to 100 real quick. Earlier this month, Chinese authorities rapidly reversed several pandemic control measures, including lockdowns, centralised quarantine requirements, and mass testing.

  • The rollback of strict Covid measures follows mass demonstrations across the country in protest of China’s strict containment policies.

Now, authorities are promising a return to “normalcy by spring”.

What gives?

The protests’ immediate trigger may have been Covid-related social controls, but many protestors were also frustrated with downstream economic failures. As Carnegie Senior Fellow Michael Pettis explains:

“November’s economic data was terrible: not only has the supply-side of the economy (exports, industrial output) performed badly in spite of a great deal of stimulus and subsidies but also, probably to no one’s great surprise, the demand side of the economy (retail sales, imports) performed even worse.”

As for timing, abandoning Zero-Covid probably wasn’t an option before October’s 20th Party Congress.

What it means for…

🇨🇳 China

Covid is likely going to get a lot worse before it gets better. The government’s official data is unreliable, but reports suggest that the healthcare and supply chain systems are already strained.

On the economy, officials are more optimistic. They reckon the policy pivot “will disturb the economy in the short term but will be a major boon for the whole year”. 

  • The World Bank is less confident, but still expects China’s economy to grow by 4.3% in 2023, compared to 2.7% this year.

🌏 The rest of the world

When a contagious disease spreads rapidly through an inadequately-vaccinated population, supply chains are bound to be disrupted, and new variants are more likely to emerge.

Still, China’s trade and tourism partners are excited to see the Chinese economy getting back on track.

  • According to IMF Managing Director Kristalina Georgieva, the end of Zero-Covid “can be very good for the Chinese people and economy, and also good for Asia and the world economy,” even if a strong Chinese recovery exacerbates global inflation.

The bottom line: In time, the ‘living with the virus’ approach may jumpstart ailing global economies. But given China’s low vaccination rates, any relaxation of Covid restrictions was always bound to carry a massive public health toll.

After years of lockdowns, many Chinese had had enough. Now, the question is: is the country ready for a brutal Covid winter?


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Southeast Asia & the Pacific

🇦🇺 Australia

Australian Foreign Minister Penny Wong will travel to meet her Chinese counterpart for the first minister-level visit between the countries in nearly three years.

  • The visit coincides with the 50th anniversary of the establishment of diplomatic ties, and aims to stabilise the two countries’ fractious relationship.

🇫🇯 Fiji

Fijian Prime Minister Frank Bainimarama’s FijiFirst party has lost its parliamentary majority, winning only 42.5% of the vote in last week’s election.

  • Bainimarama may also be out of the top job for the first time since 2007, if the tiny Sodelpa party (5% of the vote) declines to enter a coalition with FijiFirst.

🇲🇾 Malaysia

Malaysian Prime Minister Anwar Ibrahim won a no-confidence vote in Parliament on Monday, consolidating power a month after inconclusive elections.

  • The no-confidence vote couldn’t come soon enough for Ibrahim, who has already set out a long list of economic and democratic reforms.

🇵🇭 Philippines

Lawmakers in the Philippines’ lower house have approved President Ferdinand Marcos Jr.’s plan to create a sovereign wealth fund and sent the measure to the Senate.

  • Not everyone’s a fan of the proposal: critics say the fund will add to the Philippines’ debt burden and damage the country’s banking system if it fails.

🌏 Regional

The Association of Southeast Asian Nations (ASEAN) held its first-ever summit with the EU last week.

  • The EU already has several free trade agreements with individual ASEAN states, but both organisations are eyeing an inter-bloc free-trade agreement.

Good news for nature!

The UN vote on biodiversity brings us a little closer to a future where birds help us get dressed in the morning and make our beds for us. Via: Giphy.

We likely won’t look back at 2022 as an especially hopeful year for humanity, so here’s some good news to close things out.

All but two countries signed onto a pact to protect biodiversity at the UN Biodiversity Conference, or COP15, in Montreal.

  • The agreement commits signatories to protect 30% of Earth’s land and water; an improvement on the current 17% of land and 10% of water that are protected.
  • Signatories also agreed to raise $200B for biodiversity protection and double developing economies’ annual conservation fund.

Why it matters: Humans use thousands of plant and animal species for food and to support economic activities. But industries like farming, fishing, and mining are devastating some of the same species that humans rely on.

  • A UN biodiversity report from 2019 estimated that 1 in 8 species are on the brink of extinction in the coming decades.

The deal may not go far enough, according to some environmental activists and representatives from developing countries. Plus, the United States (along with the Holy See) is not a party to the UN Convention on Biological Diversity.

Still, the agreement is the most ambitious global conservation effort ever. According to Brian O’Donnell of the conservation group, Campaign for Nature:

“There has never been a conservation goal globally at this scale. This puts us within a chance of safeguarding biodiversity from collapse […] We’re now within the range that scientists think can make a marked difference in biodiversity.”


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