China's Covid reopening is both a great relief and a leap into the unknown.
Personal reflections on the change in Covid policy
Me going for a covid test this summer. I tested ever 2-3 days for about 4 months then almost daily for past 2 months. Everyone is delighted that the testing program has been greatly reduced, but concerned over the pending outbreak. Good news I have since taken off the seven kilos I put on during lockdown that are still on me in this picture!
Great news as China starts reopening! It is as though a giant weight has been lifted from my shoulders and that of all residents. Still, despite our relief, there is a tremendous sense of unease as Shanghai and the nation as they come to grips with a fast-spreading wave of infections.
I feel a tremendous sense of relief knowing that Shanghai and China are returning to some sense of normalcy. Among fellow Shanghai residents, it is the only topic of conversation, and despite the new sense of angst over getting covid, the policy change was warmly welcomed. Make no doubt about it, the protests of several weeks ago showed that the population had reached the breaking point and forced the policy change.
As of last Thursday, the 4th, many covid restrictions were eased. The two biggest policy changes were:
Regular covid testing was abolished;
Those with COVID could quarantine at home.
If you get COVID now, the recommendation is simply to stay home for a week. The reality is that without regular testing, those who get asymptomatic COVID won’t even know they’ve got it, and the virus is spreading very quickly now. This is why China is heading into the “great unknown.”
More changes today!
And the gifts are still coming. Just today, it was announced that the "COVID-19 itinerary card” would be abolished. For those who don’t know this system, which got less press than the “health code,” this green arrow was required for all travelers and tracked anyone whose phone pinged a cell tower in a high-risk area. It was generally disliked as it lead to many false alarms. Many friends received calls telling them not to travel due to false positives. One received a call telling him to remain in Beijing while he was already in the Shanghai airport!
Today’s news is that the “itinerary card” would be abolished.
What this means for me
After two months of Shangahi lockdowns, our “SuiShenMa” or “Health Code” became a part of my life. For example, to go to my yoga studio, I had to show a health code with tests within 48 hours, while the supermarket required 72hrs. This meant that I was testing whenever I walked by a convenient testing booth without a line. In the end, I was testing every 24 hours! It was soul-crushing.
Life in Shanghai revolves around your “green code” without it; you aren’t going anywhere. This hasn’t ended. Even without testing, we still need to have a green code. The question that is still hard for us to answer is what will make it turn yellow or red?
Clearly, if you are in close contact with someone who is registered as sick, you will still get a red code. Another is if your building or the floor of your building is considered “high risk” due to cases, you can get a code change. What is unclear is how anyone will know that you’re sick.
Those that do get covid and know it through self-testing will likely not report it unless required by an employer. Reporting COVID may still result in the floor of your building being put under quarantine, so I don’t expect many to “self-report” unless they absolutely must. Unless you have COVID that requires hospitalization, how will anyone know? This goes to the heart of the problem with the new system and why it will likely tear through Shanghai and China.
Life and the precious “green code.” Without it life stops. A green code is still required for entrance to the mall and many public places. The problem is that it’s hard to know exactly what makes it turn yellow or red under the new system.
-UPDATE: as of Tuesday 12 DECEMBER, no more green codes anywhere- yoga, mall, restaurants….simply gone overnight!
The irony of opening up
Still, even though China is opening up, that doesn’t mean that people aren’t afraid of getting sick or suddenly going out and about. The irony is that many Shanghai residents are more afraid of getting COVID now than ever! The increased chance of getting it is making some go out less.
Tonight my yoga school had about 50% of the normal attendance, and this weekend the traffic at the mall near my house was down by more than half. It will take time for the situation to stabilize, but for now, many are staying home, wearing masks, and trying to stay healthy.
It’s not just local Shanghaiese. My teacher friends from the West are less than two weeks away from a long five-week winter holiday and are now requesting to go back to online classes out of fear of getting sick before they leave the country.
It is also important to understand that testing requirements remain in place for teachers, health, food service, and other workers in sensitive areas. Employers also demand daily PCR tests before coming to work.
Some cities also may still require testing for entry into certain public venues. Even now, with the opening, the rules to follow are not universal.
Shanghai resident Thomas Hale perfectly summarizes my experiences crossing city and provincial borders with this article: here
Worst of all was that the rules could change overnight! On a recent trip, my friends were woken up from their hotel beds in the early morning and told that they had to leave immediately due to a rule change!
This will come as a surprise to many. Many view China’s COVID rules as being passed down by a monolithic Beijing government. Instead, they were developed locally and could be different for each city and province. This hodge-podge of rules made travel frustrating beyond belief.
The great unknown, how many will die?
Estimates of potential deaths due to covid in China vary. The most common numbers quoted seem to be in the one million range. The big question is, how fast will it hit? So far, evidence from my social group in Shanghai shows that it’s hitting fast and hard. Friends are already telling me that corporate training events are being canceled due to the high number of sick people unable to come to work. My aforementioned teacher friends are reporting that students are also reporting sick with great frequency.
All of this is anecdotal, and we’ll have to wait and see though it seems that we’re going for the “swift reopening” scenario in the graphs below. The graphs below are from a model reported on by the Financial Times that was the best I’ve seen. In the “swift reopening” scenario, the model shows daily fatalities of 20,000 per day and demand for intensive care units at ten times higher than capacity. Sobering enough for you?
The best analysis I’ve seen so far comes from this Financial Times article, whose predictions for a “swift reopening,” what we have now, are sobering: here
Was Zero-Covid a failure?
This is a tough question, and I think that we’ll only know in a few years. It’s easy to sit in the West and say China botched it. Given the massive population and weak hospital system, we’re only going to know how bad it will get in about two months, and even that will likely not give us the full picture.
Columbia University’s Shang-Jin Wei wrote that China’s containment policies may well have saved at least a million lives, with a statistical value of $1 trillion, which far offsets the estimated $384 billion in lost GDP. These are sobering calculations, given how the model above calls for one million deaths.
Was it all for nothing? China bought two years to vaccinate its vast population, during which time covid became much weaker while covid controls damaged the economy. I don’t think we can answer definitively yet, but I don’t think so.
Still, what is clear is that in real life, the calculus between saving lives and cratering the economy, the policy could not be sustained. Protests made it clear that keeping people locked up was no longer an option and that China would have to open up regardless of the cost.
What China perhaps could have done better was to get the elderly vaccinated. The government tried. It ran multiple campaigns to get the elderly vaccinated, but they simply didn’t want vaccines. Many elderly still trust traditional Chinese medicine and simply don’t believe or understand why vaccines are necessary. Others trusted so deeply in the government’s ability to control the virus that they saw no need for vaccines.
In the end, nothing short of a mandatory vaccination program would succeed in vaccinating China’s elderly. Of those, 60 and over thirty percent, or 85 million, have not had their third flu shot. A third shot is required due to the lower efficacy of China’s vaccine. And yes, as an over-60, I had three shots!
China’s vaccination policies for the elderly will likely come under fire. The government tried but how can you vaccinate people who don’t want it? Financial Times article: here
This hits home for me. I honestly believe that the two-month Shanghai lockdowns were worthwhile if they saved the lives of the elderly. Hong Kong had just experienced a devasting loss of its elderly, and a similar scenario for Shanghai seemed inevitable. Between then and now, the government did a lot. Still, I am left with the sense that more could have been done.
Gripped in relief and fear
This article is not intended as a definitive analysis of the COVID situation in China. I know that there are many topics, like vaccines, that I haven’t covered. In addition, I am not up for a full debate of zero covid, which requires far more than the brief paragraph that I gave it. My intent with this article was to give a more personal view of what’s happening in Shanghai now, unlike my writing on CBDC and Fintech
Shanghai is gripped in a sense of relief and fear. Relief that we can travel again, no longer need to test and can stay sick in our own homes. There are rumors that on January 9th a new policy that does away with quarantine when arriving on foreign flights will take effect. Many of us are thrilled with the thought of international travel again.
At the same time, our joy is tempered by a growing sense of fear as more and more report friends take to WeChat to report that they are sick. I received one while writing this article. We are all heading into the unknown, and only time will tell the toll that Omicron will take on China. The immediate impact is already starting to manifest itself with people calling in sick. Whether this will grow exponentially or slowly due to the remaining controls is what everyone is watching closely.
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Rich Turrin is the international best-selling author of "Cashless - China's Digital Currency Revolution" and "Innovation Lab Excellence." He is number 4 on Onalytica's prestigious Top 50 Fintech Influencer list and an award-winning executive previously heading fintech teams at IBM following a twenty-year career in investment banking. Living in Shanghai for the last decade, Rich experienced China going cashless first-hand. Rich is an independent consultant whose views on China's astounding fintech developments are widely sought by international media and private clients.
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