[China Economic Dilemma] ② December or Next March... When Is the Reopening Turning Point?

Possibility of Easing from March Next Year at the Two Sessions
Elderly Vaccination Rate Exceeds 90%, Providing Strong Justification

Photo by People's Daily, China

[Asia Economy Beijing=Special Correspondent Kim Hyun-jung] As China continues to adhere to its unprecedentedly strict 'Zero COVID' policy worldwide, there are prospects that the policy stance may change around upcoming political events of the Communist Party leadership.

The nearest scheduled event is the Economic Work Conference planned for early to mid-next month. The Economic Work Conference, the first economic policy meeting since the inauguration of the 3rd term leadership centered on President Xi Jinping, is considered a major event to glimpse next year's fiscal, monetary, and epidemic prevention policies. It will also provide an indication of how much emphasis will be placed on economic issues, which had previously been deprioritized in favor of confirming President Xi's third term and security matters.

An even more notable turning point is the Political Consultative Conference and the National People's Congress (Two Sessions) scheduled for March next year. After the 20th Central Committee concludes its 2nd Plenary Session (Second Plenum) and finalizes the allocation of alternate members and departmental committee members, these will be announced at the Two Sessions in March. Considering the recent financial difficulties faced by local governments and the entry into spring, which facilitates COVID control, the timing is seen as most appropriate.

The relatively 'scientific' rationale behind the government's Zero COVID policy?the low vaccination rate?may approach 100% around the time of the Two Sessions. Initially, China's epidemic prevention authorities maintained strict Zero COVID controls due to limited medical infrastructure, the high risk of severe illness upon infection, and low vaccination rates among the elderly. On the 12th of last month, the State Council of China unusually announced the vaccination rate for those aged 60 and above. According to the disclosed figures, since the spread of COVID-19, a total of 239 million elderly people aged 60 and above have received booster shots, reaching a vaccination rate of 90.6%. Among the entire population, 1.334 billion people have received booster shots, with a vaccination rate of 92.45%.

Some analysts suggest that new economic policies under Xi Jinping's third term will take shape after the Third Plenary Session scheduled for October next year. The Third Plenum, held one year after the new leadership's inauguration, serves as a milestone to evaluate and analyze the past year and finalize the overall reform agenda going forward. If the recent surge in COVID-19 cases does not subside, the government may postpone the timing of policy changes. Bloomberg News, citing opinions from Chinese officials and experts, explained, "China could move away from Zero COVID through substantial vaccination, the introduction of messenger RNA (mRNA) vaccines (Pfizer, Moderna), improvements in healthcare service capacity, and easing of border closures."