As China lifts most COVID controls, its economy has a ways to go to recover
MARY LOUISE KELLY, HOST:
After three years of repeated COVID lockdowns, China's officials say the country is back in business. But is it? NPR's Emily Feng asks, how quickly can China bounce back?
EMILY FENG, BYLINE: Earlier this month, hundreds of workers in China revolted. They marched through streets and threw chairs and boxes at police. They were demanding their jobs back because they worked at a factory making rapid antigen tests. And now that China has lifted nearly all of its COVID controls, they were out of a job.
FENG: NPR confirmed the protest happened with two workers who participated. The protest was notable because it highlighted a strange contradiction. China's COVID controls killed local economies, but it also created a lucrative health industry. And now, with control suddenly gone, China will have to pivot again to welcoming foreign investment and getting its lockdown-battered citizens to spend more. Understandably, there is skepticism.
NARGIZA SALIDJANOVA: Trust but verify, right?
FENG: That's Nargiza Salidjanova, a China director at the research firm Rhodium Group. She says investors are skittish. There's been too many sudden policy reversals and, earlier this month, GDP figures that raised eyebrows.
SALIDJANOVA: Markets where actually - like, stock indices were falling given the inconsistencies in official indicators. So the market didn't believe the numbers. That's not very encouraging. The first step is to actually start releasing accurate numbers so investors can trust you again.
FENG: Adding to China's challenges are bigger global economic uncertainties just as China finally reopens its borders. Bert Hofman explains. He was former China director for the World Bank and is now a professor at the National University of Singapore.
BERT HOFMAN: Remember; in 2020, China was up and running with manufacturing again. Nobody else was. So exports really drove the recovery in China, the first recovery in China. This time around, it's different. The world economy is not doing so well. And therefore, export demand will be lackluster at best.
FENG: So Chinese officials are looking for ways to boost consumption right at home. Nick Marro, a senior analyst at the research firm The Economist Intelligence Unit, is watching consumption closely as well.
NICK MARRO: It really has to come from the consumer in terms of, you know, are people going to be willing to, you know, dine out? Are they willing to spend on entertainment and leisure goods? Are they, you know, willing to, you know, return to China's malls and markets and kind of lend support to the retail environments?
FENG: Yes, Marro says. Consumers plowed their somewhat diminished incomes into savings during the pandemic, and so now they've got a bit more money to spend. But they're also risk-averse. So he says the consumer recovery likely won't get China immediately back to pre-pandemic levels. And, of course, COVID-19 still remains a variable. It's a potential X-factor that could continue to jeopardize China's recovery.
LAUREN ANCEL MEYERS: And part of the equation for how long that immunity lasts is how quickly the virus is evolving.
FENG: This is Dr. Lauren Ancel Meyers, a professor at the Center for Pandemic Decision Science at the University of Texas.
MEYERS: You know, what is the next variant that's going to emerge and spread over the world? How similar does it look to, you know, the current spreading variants and the vaccines that they use to, you know, vaccinate people?
FENG: China's public health authorities say 80% of the country - that's more than 1.1 billion people - have already gotten COVID in this most recent surge. Such a rapid and wide-scale level of infection means a decent amount of natural immunity. But the economy is far from being immune to further shocks. Emily Feng, NPR News.
(SOUNDBITE OF KENDRICK LAMAR SONG, "MONEY TREES FT. JAY ROCK") Transcript provided by NPR, Copyright NPR.