China is facing “tough challenges” as it enters “a new phase” in its COVID-19 response, President Xi Jinping said in his annual new year’s address on Saturday, marking his first comments on the current wave of new cases that has followed the unexpected ending of “zero-COVID” policy on December 7.
Mr. Xi said China’s economy remained “resilient” after what has been a difficult year with growth hit by COVID-19 lockdowns, a continued downturn in the property market, and a slump in the tech sector that has reeled from regulatory crackdowns.
“Chinese economy has remained the second largest in the world and enjoyed sound development. GDP for the whole year is expected to exceed 120 trillion Yuan ($17.4 trillion)”, he said, which would peg growth for the year at around 4.4%, as the GDP for 2021 was revised recently to 114.9 trillion Yuan.
With the opening of the country after three years of zero-COVID, which was phased out on December 7 and is to be followed by the opening of China’s borders with quarantine no longer enforced starting January 8, growth is expected to rebound next year, but only after a sluggish start.
First quarter growth is set to be hit by the ongoing record wave of COVID-19 cases around the country following the December 7 easing, with a smaller second wave expected after the annual Chinese new year holiday in end-January. On Saturday, the official Purchasing Managers’ Index (PMI), reflecting factory activity, fell for a third month, marking the sharpest contraction since the start of the pandemic.
Mr. Xi in his address said “following a science-based and targeted approach, we have adapted our COVID response in light of the evolving situation”. “We have now entered a new phase of COVID response where tough challenges remain,” he said. “Everyone is holding on with great fortitude, and the light of hope is right in front of us.”
While many young Chinese have welcomed the end of lockdowns and restrictions, the wave of cases for a population with low immunity has seen the deaths of many elderly people around the country, with crematoria in Beijing and other cities reporting record waiting periods. Chinese authorities are not, however, reporting the number of deaths, prompting calls from the World Health Organisation for more data and transparency.
The end of zero-COVID followed an outbreak of a highly transmissible Omicron sub-variant in a population with low immunity and unexposed to previous waves, quickly overrunning China’s lockdown and testing regime. Protests in end-November against the reimposition of lockdowns also pushed the government to ease the policy.
Mr. Xi in his speech said “it is only natural for different people to have different concerns or hold different views on the same issue,” in an apparent indirect reference to them. “What matters is that we build consensus through communication and consultation,” he added. “When the 1.4 billion Chinese work with one heart and one mind, and stand in unity with a strong will, no task will be impossible and no difficulty insurmountable.”
Mr. Xi, who began a third five-year term in October, highlighted the completion of China’s space station, the launching of a third aircraft carrier, the building of a “strong military”, and the delivery of the C919, China’s first homegrown large passenger jet, as some of the key landmarks of the past year.
