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Geopolitical Monitoring Report | December 23, 2022

by | Dec 23, 2022 | Blog

China

 

China’s New COVID Wave Threatens a New Round of Disruptions

 

Background:

China continues to relax its stringent “zero-COVID” restrictions following anti-government protests that occurred last month and now the country is experiencing a massive nationwide outbreak of the virus. The wave has led to warnings of overcrowding in hospitals and reports of backlogs at crematoriums in major cities across the country.

The virus’ debilitating spread throughout the country is primarily being driven by the fact that there is little natural immunity in the general population (because zero-COVID was effective at preventing earlier variants from spreading), a lack of effective domestic vaccines for the latest variants, and the fact that current variants of COVID-19 that are spreading are highly transmissible.

China’s resistance to relaxing “zero-COVID” and its refusal to accept foreign vaccines have left millions vulnerable to the current outbreak; this has led to concerns from the US State Department and others that rapid spread may result in additional mutations in the virus that create new variants that evade already existing vaccines.

Impact:

Beijing will likely have three primary options moving forward and none of them are likely to have overly positive outcomes for the country. The first option is to continue dismantling the “zero-COVID” policies, which would allow the virus to continue spreading unchecked. This would obviously cause widespread illness and death throughout the country. 

The second option would be to reinstitute some elements of “zero-COVID” and return to lockdowns as a mitigation method. This choice would risk additional outbreaks of civil unrest that could destabilize the regime.

The final likely option would be to import more-effective vaccines from Western nations. While China has begun to show signs that they may become more open to Western vaccines, – Beijing has recently allowed some BioNTech vaccines into the country from Germany for use by German nationals – they still appear resistant to the idea of allowing widespread vaccination of its citizens using Western mRNA vaccines. In addition, a mass vaccination campaign with imported vaccines at this stage would likely not roll out quickly enough to prevent the worst of the outbreak. Beijing is likely hesitant to pick this option to preserve its international reputation and that of its vaccines.

China has already seen its vaccine donations and shipments to low and middle income countries drop significantly this year due to these countries preferring to choose Western vaccines, and accepting those same vaccines would further damage the reputation of Chinese COVID shots. Regardless of which option is chosen, it is likely that this latest outbreak will result in significant disruptions to the Chinese economy that will have further negative supply chain impacts that will likely have global impact.

Mitigation:

Social media platforms and media outlets need to be aware that no matter which approach the Chinese government elects, there is likely to be a flood of inauthentic bot activity on social media networks that are aiming to bolster support and deflect criticism of whichever decision is made. Companies and organizations that operate in China or rely on supply chains in the country should ensure that they maintain comprehensive monitoring of the situation for abrupt changes in China’s COVID policies and for any early indications that the changes may be made. This will enable them to adapt and mitigate the impacts that will be caused by either the widespread spread of COVID or a reintroduction of “zero-COVID” style lockdowns.

Finally, these companies should also continue to monitor for signs of renewed unrest. The protestors scored a large victory by securing the pullback of “zero-COVID” restrictions and this could encourage additional protests in the future.

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Table of Contents

China

Background

Impact

Mitigation

 

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