In December 2019, a rare fear of coronavirus emerged from the Wuhan province of China and caused an epidemic around the world. The medical system of developed countries like Europe and America could not save lives from the outbreak of Corona. There was a terrible silence around the world at the end of last year. At a time when thousands of people around the world have lost their lives due to the corona virus, the number of corona deaths in China has been shown to be only 5 thousand. But in recent months, all records of infections have been broken in the country. Its impact is already being felt in the world economy including the neighboring country India.

Xi Jinping government adopted zero tolerance policy against Corona to control the situation. But people’s lives are fed up with the trap of such strict rules. The country’s economy started collapsing, along with rising unemployment. As the situation got out of hand, the Chinese people took to the streets because of their stomachs. Finally, the Chinese government had to withdraw from the zero-tolerance policy in the face of public protests.

Immediately after the withdrawal from the policy, the worst picture began in China, a country of 1.4 billion people. The infection started to increase at the speed of a fast horse. Analysis and predictions of researchers say that if this situation continues, 1 million people will be infected and 5000 will die every day in the country. Even by April next year, one-third of the population nationwide may be affected by this virus. According to London-based research firm Airfinity Limited, if the current wave of corona continues, the daily detection rate may increase up to 3 million 70 thousand in January. Basically, this has been claimed through scientific analysis of the country’s recent corona situation and infection rate. Another wave of infections is likely to follow after January, leading to a peak of 4.2 million daily infections in March.

Currently, the corona virus is spreading rapidly throughout China. A hospital in Shanghai has already told its staff to prepare for a fierce battle against Covid-19, Reuters reported. They estimate that half of the city’s 2.5 million people will be infected by the end of next week. As of Wednesday, the relevant authorities said that 3 lakh 89 thousand 306 patients with symptoms have been identified so far.

China could face more than a million Covid deaths next year due to relatively low full vaccination rates among its vulnerable elderly population, experts say. China’s vaccination rate is more than 90 percent, according to official data, but the rate for adults who received booster shots is 57.9 percent and 42.3 percent for people age 80 and older.

How will the effect of Corona in the world?

Due to the unprecedented corona infection in China, anxiety has arisen among the neighboring countries. But can this epidemic spread globally again? It is not uncommon to have the question creeping into your mind. Economists believe that if the pandemic does not spread, the global economy will be severely impacted.

According to the December monthly report, Japan will pay close attention to the current Covid situation in China, in addition to the risk of a global economic slowdown, price hikes and supply constraints. As currently the world’s third-largest economy, Japan has been struggling with sluggish global growth and high import costs that are affecting the country’s exports and manufacturing activity. A Cabinet Office official said, ‘If the infection situation in China affects the supply chain or trade, it could also affect the Japanese economy as we saw earlier this year.’

Tokyo, meanwhile, is raising hopes of a recovery as it upgraded its outlook on business sentiment for the first time in a year. The government expects the Bank of Japan to steadily achieve its two percent rate target based on economic, price and financial conditions.

In addition to Japan, neighboring India also has increased concern about Corona. Four patients infected with the omicron type of the virus, BF.7, have been identified in the Indian states of Gujarat and Odisha. The meeting was held last Wednesday with the Union Health Minister and the high officials of the Ministry of Health. Prime Minister Narendra Modi held a meeting to review the Corona situation on Thursday afternoon. According to Indian media reports, Omicron’s BF.12 variant was also detected in India in October-November. Those treated in isolation at home have fully recovered. Sources also said that the first patient was detected in July. Even though the country has not been forced to follow the Covid restrictions so far, from Thursday all airports have taken steps to test samples of international passengers on a random basis.

The government of West Bengal, the closest state of Bangladesh, is also trying to proceed with the ‘wait and watch’ strategy to deal with Corona, said the health department of the state. Although the daily number of corona infected in West Bengal is less than ten, the central government of the country has warned West Bengal in this regard that the outbreak of corona may increase in India and Bengal at any time due to the way the infection is increasing in China. Mainly on the occasion of Christmas and English New Year, the crowd will increase in the streets and restaurants after a few days. This situation has raised concerns about covid.

World economy

The knock-on effects of ditching ‘zero-Covid’ are highly uncertain given China’s complex vaccine coverage, fragile health infrastructure and lack of clarity about the true extent of infections as Covid-19 cases begin to rise, Reuters reports. The World Bank on Tuesday cut its outlook for China’s growth this year and beyond, citing the impact of a sudden relaxation of strict Covid-19 control measures among other factors, including its shaky property sector.

Bank of Japan Governor Haruhiko Kuroda cited the resurgence of the virus in China as a downward pressure on the global economy, while Taiwan listed the spread of Covid-19 in China as a major uncertainty facing its economy.

Yet the consensus view remains. If China does what US Treasury Secretary Janet Yellen this month calls its ‘very complex issue’ of changing its Covid-19 stance, it will boost both its domestic economy and the global one. This would reinforce the belief among policymakers in the Group of Seven (G-7) countries that raising interest rates would bring inflation under control and that any recession would be relatively shallow and short-lived.

Mike Gallagher, director of research at Continuum Economics, said: ‘If you wait six months to get out of the Covid wave … we will get to a point where China can live with Covid like everyone else. The grand strategic game is about to reopen. It’s going to be very bumpy.’

In any case, the situation in China is important

Siddharth Sanyal, chief economist at Bandhan Bank of India, said, “If China slows down, if China shuts down in the next two, three-four months, that means the pace of recovery in the global economy will suffer significantly in the near term.”

China is the world’s second largest economy and there is no denying its dominance in swinging economies or even crippling smaller ones. Indeed, the implications may be more profound now that the global economy is not yet out of the woods and India is still far from its recovery. According to economists, zero tolerance and disruptive measures to control infection have already pushed the country into recession. Soon after it was relaxed, the situation took a turn for the worse. In addition to slowing growth, China’s unemployment situation remains fragile and it has a shaky property market that puts banks’ loan books at serious risk.

(25 December)