IMF Managing Director: "Time to End China's Zero-COVID Policy"

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF)
[Photo by AP Yonhap News]

[Asia Economy Reporter Byunghee Park] Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said that it is time for China to end its strict COVID-19 prevention policy known as the 'Zero COVID' policy, according to an AP report on the 29th (local time).

Georgieva emphasized the need for China to ease its COVID-19 prevention measures and narrow the scope of restrictions, stating that relaxing China's control measures would also benefit the global economy, which is struggling with inflation and the energy crisis.

In an interview with AP in Berlin, Germany, she urged, "China should recalibrate its Zero COVID policy to precisely target confirmed cases for isolation, taking into account the impact on people and the economy."

Following an apartment fire in Urumqi, Xinjiang on the 24th that resulted in 19 casualties, suspicions have spread that delayed firefighting efforts and the strict COVID-19 prevention measures were related. This has led to protests against the stringent COVID-19 lockdowns by hundreds to thousands of people in major cities such as Beijing, Shanghai, Wuhan, Chengdu, Nanjing, and Guangzhou.

This is the first time in 33 years since the 1989 Tiananmen Square pro-democracy protests that voices opposing government policies have been organized and emerged nationwide.

Georgieva stated, "We have witnessed how important it is to move away from strong lockdowns and implement precisely targeted restrictions," emphasizing, "Targeted measures can curb the spread of COVID-19 without incurring heavy economic costs."

She also called on China to review its COVID-19 vaccination policy and urged vaccination for the most vulnerable populations.

AP explained that China has relied on lockdown measures due to the low vaccination rate among the elderly and the spread of highly infectious COVID-19 variants.

Georgieva identified the soaring inflation rate as the greatest risk facing the global economy. She explained that this forces central banks to raise interest rates, which increases borrowing costs for households and businesses.

She said, "Policymakers must approach the fight against inflation with discipline," adding, "Inflation weakens the foundation for growth and hurts the poor the most."

When asked whether the U.S. Federal Reserve (Fed) should stop raising interest rates, Georgieva responded, "The Fed has no choice but to maintain its current rate hike stance until inflation declines to a credible level," adding, "Given current indicators, it is too early to retreat."