In tackling Covid-19, China is well aware of its role in the global economy

Beijing has persevered with the ‘dynamic zero-Covid’ policy with full understanding of Shanghai’s role in both the Chinese and world economy to prevent a further downturn
Meanwhile, efforts are under way to develop Hainan as a free-trade port and for China to contribute to economic integration in Asia and beyond

Xie Maosong

Published: 3:30am, 21 Apr 2022

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As the world continues to suffer due to the pandemic and the Russia-Ukraine conflict, China’s choices and stance are being watched closely. Many are concerned that China’s pandemic controls will have a lasting impact on the country’s continued reform and opening up as its choices will have a profound impact on the world.

At the Boao Forum for Asia, which started on April 20 with the theme “The world in Covid-19 and beyond: working together for global development and shared future”, China will provide clear answers.

Yes, the world is worried about China’s economy under the strict pandemic controls, especially as Shanghai, its business and finance centre, is at the centre of a new outbreak. The international metropolis has had the highest gross domestic product of all Chinese cities for a decade. Its net fiscal contribution is the second-largest in China. Shanghai is also a major hub for China’s global trade, with total foreign trade volume reaching US$4 trillion yuan.

There’s no doubt that, by sticking to a “dynamic zero-Covid” policy in an effort to break the transmission chain, Shanghai’s economy has seen a short-term decline. Many are worried that if it does not rebound quickly, and substantially, the city risks entering a period of pandemic-induced economic stagnation.

As an international hub and the world’s largest container port, Shanghai must not let the pandemic spill over to its economically vibrant neighbouring provinces of Zhejiang and Jiangsu, and their cities. This would bring larger disruption to China’s economy, and would also place the world economy at risk.

The Chinese government has persevered with the “dynamic zero-Covid” policy with full awareness of Shanghai’s role in both the Chinese and world economy. China has learned a lesson from the many Western countries that loosened their Covid-19 policies, only to suffer severe economic downturns.

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Shanghai has gradually drawn up a white list of companies deemed safe enough to resume work, including Tesla’s factory operations. Some, but not all, middle schools will also reopen after the “golden week” holiday in May. As an ancient Chinese poem suggests, “A thousand sails pass the sunken boats, and thousands of trees grow beside the withered ones.”

Shanghai expects to reach dynamic clearance of Covid-19 cases at the end of spring in May. The Pudong New Area has been the hardest hit area in Shanghai during the outbreak. However, the city, which has struggled through the crisis, is making steady progress on the road of reform and opening up.

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Pudong deserted amid Shanghai lockdown on eastern bank of Huangpu River

While tackling Shanghai’s outbreak, China is also focusing on Hainan, benchmarking the southern island against the world’s freest ports like Hong Kong, Singapore and Rotterdam. President Xi Jinping visited Hainan 10 days before the opening of the Boao Forum and emphasised the need to speed up the construction of a free-trade port with Chinese characteristics and world influence.

Designating Hainan to become the “paradigm of China’s reform and opening up in the new era” can have an impact on the entire nation, as seen with Shenzhen and the Shanghai Pudong New Area in the past.

Based on an awareness of China’s long history and civilisation, the country is often “picky” about the choice of major international meeting venues. When talking about Hainan Island, people often describe it as “the edge of the world.”

This phrase has a multidimensional meaning. It implies that such a place “transcends distance and makes everyone your neighbour” as an old saying goes, and it brings about the integration of cultures.

Many Chinese will remember it as the place to which Su Dongpo, a famous Chinese poet and statesman, was exiled after being demoted. In ancient China, literati or scholar-officials in exile brought the advanced culture of the central areas with them, promoting the integration of cultures and ethnicities.

President Xi Jinping visits a container terminal in the Yangpu economic development zone in Danzhou, Hainan province, on April 12. Photo: Xinhua

Today, the world is increasingly talking about the “Asian century”. China will work with other countries to fully leverage the Regional Comprehensive Economic Partnership (RCEP) to build the world’s largest free-trade zone.

Unlike other countries, China does not attach any political strings to its efforts to promote common development and deepen economic cooperation with other Asian countries, let alone set a debt trap.

Cooperation with strings attached and debt traps are the usual tricks of the West, as illustrated by the recent US aid grant to Nepal and the proposed Lend-Lease Act for Ukraine, which echoes the Lend-Lease programme in 1941 allowing the US government to quickly send war supplies to the United Kingdom during World War II. After World War II ended, the US required the UK, struggling to rebuild its economy, to pay back its debts, which accelerated the decline of its global influence.

Historically, Chinese civilisation respects and acknowledges cultural differences, which is why the Boao Forum for Asia has also adopted topics related to diversity of civilisations and religions besides the economy, science and technology. This diversity represents the historical experience of Asia, the best example of which is the ancient Silk Road.

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Belt and Road Initiative explained

The economic integration of Asia is completely different from the Monroe Doctrine of the US, fundamentally because China’s peaceful and inclusive nature differs greatly from that of the United States.

Continuing Asian economic integration will lead to better economic integration of Asia and Europe, Africa and America. Over time, Europe will come to realise that the China-EU investment agreement is not for China’s benefit, but for Europe’s and China’s mutual benefit, with China, in fact, making big concessions.

Xie Maosong is a senior fellow of the Taihe Institute, and a senior research fellow at the National Strategy Institute of Tsinghua University