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Goldman says China will stick to Covid Zero after CPC meeting

Following a crucial Communist Party gathering next month, Goldman Sachs Group Inc. expects China to continue its zero-tolerance policy toward Covid-19, with the bank's economists downplaying expectations of any significant policy shifts occurring shortly after the congress.

According to economists including Goldman's China head Hui Shan, stability will be the key theme leading up to the summit of China's top leaders, where President Xi Jinping is anticipated to win a record-breaking third term.

They said that this is the reason why Covid containment efforts, particularly those surrounding the capital, have been stepped up recently. Beijing-area areas have been sealed down, virus testing regulations have been tightened, and internal travel will be prohibited for the next month.

According to the Goldman economists, the once-every-five-year summit will primarily be concerned with changing the party leadership and that a shift away from Covid Zero, China's ongoing strategy of containing the virus through lockdowns, mass testing, and border controls, is unlikely to occur until after the annual National People's Congress sometime in the first half of 2019.

Disruptive Strategy

Given the low elderly immunisation rates and ineffective Covid inoculations in China, several analysts predict the country will continue its disruptive policy over the long term.

For the second day in a row, China recorded less than 1,000 infections by 915 new Covid cases on Monday. That number included 16, and in recent days, there have been unrests in a high school and several institutions in Beijing. All the cases in the capital were already quarantined.

The government isn't taking any chances with Covid because more than 2,000 delegates are expected to arrive in Beijing for the conference on October 16. After a resident tested positive for the virus, a district of Shijiazhuang, the capital of the neighbouring Hebei province, was placed under lockdown starting at 6 am local time on Tuesday. The neighbourhood of Sanhe will also be under a stay-at-home restriction.

In a meeting of the national Covid taskforce on Friday, Vice Premier Sun Chunlan, China's virus czar, reaffirmed Xi's position and stated that the country's top priority at the moment, particularly in the run-up to the congress, was to prevent significant outbreaks while guaranteeing economic stability.

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