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China: Covid Surge Signals Return of the Command Economy

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In an effort to maintain its “zero covid” strategy, China has been taking a hardline approach not seen since the heyday of Chairman Mao. And China may have stumbled in doing so.

A new piece from the New York Times details the fraught economics and politics of trying to completely stamp out a viral pandemic at any cost. While most nations have strived for a balance between public health measures and maintaining some level of economic productivity, China’s absolutist approach has not abated and now has more than 340 million citizens under a harsh lockdown.

Ray Bradbury’s classic novel, Fahrenheit 451, features a menacing mechanical hound as part of its conformity efforts, and in Shanghai, a city with roughly 25 million inhabitants, Communist Party officials have resorted to eerily similar measures to enforce its lockdown.

But China’s push for zero covid has gloomy implications beyond the loss of freedom of mobility. During the era of the command economy, not only were the people of China poor and impoverished in massive numbers, the only way many families could find relief was on the black market.

The Party’s continued insistence on eliminating covid, rather than learning to live with it, has also reinvigorated the black market. The Times reports that only commercial drivers with passes are allowed on the road, and that those passes can fetch upwards of $2,000 for just single-day use on the black market.

Citizens can’t order food deliveries from restaurants, and some neighborhoods prohibit the purchase of toilet paper or baby diapers as nonessential items. While some large corporations, like Tesla, can afford to obey the stifling restrictions, many small businesses in China struggle.

The impact of the Communist Party’s crackdown-lockdown will echo throughout the global economy as well. Several major Chinese ports are under lockdown even as United States, Europe, and Japan are feeling the heat of inflation coming on the heels of cash-heavy economic stimulus and strained supply chains.

It is unclear how long this extreme form of lockdown will persist, or how deep its costs will be, but China’s handling of covid has already soured its reputation around the globe. Adding to the woes of the global inflation surge, in pursuit of an arguably failed public health strategy, won’t do much to foster better relations with the family of nations, especially the United States.