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Airport staff members wearing personal protective equipment greet passengers at the airport in Beijing following the Beijing 2022 Winter Olympics in China, on Feb. 21.EDGAR SU/Reuters

You can bank on one sure result from just about every Olympics: Regardless of who took home gold, silver or bronze, the host country ends up losing, at least financially. That’s certainly true for China, whose rigidly enforced zero-COVID policy means zero tourists, zero ticket revenue and a lot of suffering entrepreneurs.

The total price tag for the 2022 Games has reportedly climbed to nearly US$40-billion. That’s the second-highest amount ever forked out for one of these quadrennial winter extravaganzas, after Russian President Vladimir Putin’s profligate Sochi games of 2014.

Unlike Russia, Beijing can cover its hefty tab without putting a hole in its finances or a dent in the economy. It’s what happens after the Olympic flame is doused that ought to be worrying policy makers, particularly if they remain wedded to the world’s most stringent COVID controls.

From the early days of the pandemic, China’s swift lockdowns of neighbourhoods, districts, cities and entire regions, sometimes in response to only a handful of cases, effectively contained the virus and helped keep the world’s second-largest economy on the rails. President Xi Jinping and other senior Communist officials could tout the results as proof that their forceful response was far superior to the fumbling efforts of most Western democracies.

China’s economy grows 8.1% in 2021 but slows near end due to strict COVID-19 rules, debt curbs

But now the Chinese have to deal with their own sputtering economic engine, amid deepening woes in the battered property market, falling consumer demand and heavy-handed government intervention in public markets and private business. Beijing has notably reined in the domestic tech players that dominate the booming digital economy and targeted fast-growing private finance, property and education companies for becoming too powerful, too greedy or socially harmful.

And conditions are about to get worse. That’s because even the strongest policing won’t stop the highly contagious Omicron variant from rampaging across China. The population is vulnerable because of a low level of natural immunity – another result of the tough restrictions – and inferior domestic vaccines that provide less protection than those developed by Pfizer and Moderna.

The virus has already surfaced in Beijing and other cities across the country, prompting lockdowns of more than 20 million people. Omicron may be milder than earlier variants and impossible to corral, but the government is sticking with what has become a counterproductive strategy.

Eurasia Group, a prominent geopolitical adviser, has ranked zero COVID and its potential economic and political fallout as the biggest risk facing the world this year (well ahead of Mr. Putin’s machinations). China’s strategy “will fail to contain infections in 2022 and will lead to larger outbreaks and more severe lockdowns and greater economic disruptions,” the firm warned in its annual assessment of global risks.

But Mr. Xi can’t afford to discard a policy that so many Chinese regard as his great success in curbing a deadly disease.

“Keeping the country locked down for two years has now made it more risky to open it back up,” Eurasia president Ian Bremmer and chair Cliff Kupchan say in their analysis. “It’s the opposite of where Xi wants his country to be … but there’s nothing he can do about it. The initial success of zero COVID and Xi’s personal attachment to it makes it impossible to change course.”

So while other countries with high vaccination levels are easing restrictions and adjusting to life with Omicron, China faces a fresh wave of quarantines, factory closings and supply chain disruptions. This will inevitably hamper the global recovery – China accounted for more than a quarter of world economic growth last year – and heighten inflationary pressures.

China’s factory output grew faster than expected in November, but new COVID-19 restrictions hit retailers

The International Monetary Fund expects the Chinese economy to expand at a 4.8-per-cent clip this year, down sharply from 8.1 per cent in 2021. Some private forecasters are more pessimistic. Goldman Sachs has reduced its estimate by half a percentage point to 4.3 per cent. It would have lopped off nearly a full point because of the COVID policy alone, but expects fiscal and monetary easing will prevent a steeper decline.

The reduced growth still sounds good compared with the IMF’s projections of 4 per cent for the U.S. economy, 4.1 per cent for Canada and 3.8 per cent for Germany. In China, though, such a dramatic slowdown is tantamount to a recession. And it spells trouble for some commodity producers, exporters of industrial and consumer goods and service providers that count heavily on the Chinese market.

Abandoning the zero-COVID game plan would be the smart move. But Mr. Xi is unlikely to take any bold steps until after he has secured an unprecedented third five-year term in power, which is expected at next fall’s Communist Party congress.

Add in the uncertainty stemming from the continuing assault on private companies Mr. Xi regards as too big, harmful to society or insufficiently committed to the party’s long-term goals, and it’s going to be tough for investors with exposure to the Chinese market to plot a safe course this year.

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