This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: China’s Covid-19 Dilemma Deepens
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > China’s Covid-19 Dilemma Deepens
Markets

China’s Covid-19 Dilemma Deepens

Editorial Board Published January 10, 2022
Share
China’s Covid-19 Dilemma Deepens
SHARE

The hypercontagious Omicron Covid-19 variant has its first toehold in China: The country confirmed its first local transmissions over the weekend in the northern city of Tianjin. A public health official told state media that the virus appears to have spread for at least three viral generations in the city.

China successfully faced down the fast-spreading Delta variant in 2021, but at a high cost. Repeated tough measures to quash local outbreaks seriously damaged the service sector, consumption and growth. Now, an even more contagious variant is knocking at the door. Does that mean an even bigger hit to growth?

A lot remains unknown about Omicron—particularly how virulent it really is—but there are reasons to think it might hit growth harder.


Newsletter Sign-up

Heard Alert

The first word on what Wall Street is talking about.


Morgan Stanley economists think that if Omicron’s higher transmissibility leads to multiple citywide lockdowns across different regions, it would knock China’s first-quarter growth down by 0.6 to 0.7 percentage points to just over 4% year over year. Goldman Sachs puts the potential impact of a broader outbreak this winter at 0.9 percentage points for full year 2022, which, all else being equal, would drive its full-year forecast below 4%. More important, Morgan Stanley sees Omicron as a potential turning point at which the economic costs of China’s harsh Covid-19 control measures start to outweigh the benefits.

Scientists are using automation, real-time analysis and pooling data from around the world to rapidly identify and understand new coronavirus variants before the next one spreads widely. Photo Illustration: Sharon Shi

Part of the problem for Beijing is simply a numbers game. If preliminary research indicating that Omicron is far more transmissible, but less deadly, than Delta holds up, then economic disruptions in wealthy countries—which dented demand for services and pushed up demand for Chinese-made goods in 2020 and 2021—might prove relatively transient and small. That would remove one crucial support for Chinese growth that has helped offset the hit from China’s own draconian Covid-19 control measures. At the same time, those measures might have to be used more frequently—and intensified further—to keep Omicron at bay. Overseas Asian manufacturers, whose populations already have substantial natural immunity or high vaccination rates, also might be less likely to shut down again for a milder variant, meaning more competition for a slower-growing export pie.

Finally, China has relatively few intensive-care hospital beds—4.4 per 100,000 people compared with around 26 in the U.S. and 11 in South Korea, according to Morgan Stanley—meaning that a large spike of even a significantly less-dangerous disease would still risk strained hospitals and many deaths. Nearly two years of government messaging on the horrors of Covid-19 abroad and China’s relative competence also magnifies the political risk of an about-face now, especially in a fraught political year when President Xi Jinping appears poised to bid for a precedent-breaking third term at the Communist Party’s head.

After a disastrous beginning, China’s monumental effort to control Covid-19 worked well throughout late 2020 and reasonably well in 2021, despite mounting economic costs. From here on out, the trade-offs—both political and economic—could get larger.

Write to Nathaniel Taplin at [email protected]

The Omicron Variant

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the January 11, 2022, print edition as ‘Covid-19 Dilemma Deepens in China.’

Contents
Newsletter Sign-upHeard AlertThe Omicron Variant
TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Huawei Pours Money Into China’s Chipmaking Ambitions Huawei Pours Money Into China’s Chipmaking Ambitions
Next Article Zynga, Lululemon, Virgin Orbit, Tilray: What to Watch When the Stock Market Opens Today Zynga, Lululemon, Virgin Orbit, Tilray: What to Watch When the Stock Market Opens Today

Editor's Pick

Nicki Minaj Calls Cardi B’s Daughter ‘Ugly’; Cardi Shoots Again That Nicki’s Son Is Nonverbal Because of Drug Use Throughout Being pregnant

Nicki Minaj Calls Cardi B’s Daughter ‘Ugly’; Cardi Shoots Again That Nicki’s Son Is Nonverbal Because of Drug Use Throughout Being pregnant

Studying Time: 3 minutes The Nicki Minaj vs. Cardi B beef has been occurring for years. Like, mainly for so…

By Editorial Board 4 Min Read
Maggie Baugh: Every part We Know About Keith City’s Rumored New Girlfriend
Maggie Baugh: Every part We Know About Keith City’s Rumored New Girlfriend

Studying Time: 3 minutes Is Keith City hooking up together with his…

4 Min Read
Map: See the place California FAIR Plan seeks house insurance coverage fee hikes
Map: See the place California FAIR Plan seeks house insurance coverage fee hikes

The FAIR Plan, California’s last-resort insurance coverage program for owners needing fireplace…

5 Min Read

Oponion

Hailey Bieber Focused by ‘Transvestigators’ For Some Cause

Hailey Bieber Focused by ‘Transvestigators’ For Some Cause

Studying Time: 5 minutes Hailey Bieber is the goal of…

August 21, 2025

Liam Payne: Three Arrests Made in Reference to Singer’s Demise

Three individuals have been arrested together…

November 7, 2024

Omicron Variant Has Covid-19 Vaccine Makers Preparing for Worst Case

Drugmakers raised the prospect that existing…

November 29, 2021

Trump requires decrease rates of interest to go ‘hand-in-hand’ with tariffs: ‘Lets rock and roll, America’

Federal Reserve chair Jerome Powell shares…

February 12, 2025

Bay FC snaps 4-game shedding streak with a 1-1 attract Orlando

Bay FC snapped its four-match shedding…

September 14, 2025

You Might Also Like

Traders have fun Japan’s ‘Iron Lady’ election win
Markets

Traders have fun Japan’s ‘Iron Lady’ election win

Federated Hermes CIO Stephen Auth weighs in on Japan's first elected feminine prime minister and provides an concept on what…

3 Min Read
Tesla teases Tuesday announcement with social media movies
Markets

Tesla teases Tuesday announcement with social media movies

Niles Funding Administration founder and portfolio Dan Niles discusses Tesla’s potential $1 trillion compensation plan for Elon Musk on ‘The…

5 Min Read
Gold FOMO may push steel to ,000
Markets

Gold FOMO may push steel to $4,000

Pacer ETFs President Sean O’Hara discusses the advantages of ETFs and lays out his favourite investments on ‘The Claman Countdown.’…

3 Min Read
OpenAI turns into world’s most respected non-public firm with 0B valuation: report
Markets

OpenAI turns into world’s most respected non-public firm with $500B valuation: report

OpenAI CFO Sarah Friar joins Mornings with Maria to debate main investments from NVIDIA, SoftBank, and others, the U.S.–China AI…

5 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?