Xi defends China’s Covid-19 response amid mounting economic woes

Chinese President Xi Jinping joins the Boao Forum for Asia virtually on April 21, 2022. PHOTO: REUTERS

BEIJING (BLOOMBERG) - President Xi Jinping defended China’s lockdown-dependent approach to fighting the pandemic, even as he sought to reassure the world that the country was still committed to opening its economy.  

Nations must expand cooperation to ensure a recovery from the virus-fuelled downturn of the past two years, Mr Xi told the opening ceremony of the Boao Forum for Asia via video link Thursday (April 21).

While Mr Xi made no mention of the Shanghai lockdown or the growing debate over the costs of China’s Covid Zero strategy, he reaffirmed the underlying goal of minimising deaths.  

"We need to work together to defend people’s lives and health," Mr Xi told the annual event held in China’s southernmost Hainan province. "Safety and health are the prerequisite for human development and progress. For humanity to clinch the final victory against the Covid-19 pandemic, more hard efforts are needed."

China is seeking to support economic growth weighed down by lockdown measures to contain the country’s worst Covid-19 outbreaks since the early days of the pandemic.

March data showed the biggest contraction in retail sales and a surge in unemployment to the highest since early 2020, even before more stringent virus-control measures were introduced in places like Shanghai in April. 

"It seems that his speech continues to highlight the risks from Covid-19, but also sticking to his stance for reforms, which is something that has been mentioned before," said Mr Jun Rong Yeap, a strategist at IG Asia Pte.

"Therefore, it seems that the speech has failed to provide any significant uplift for the Chinese equities market, probably as market participants were expecting some form of reassurances that did not play out."

Economists at banks from UBS Group AG to Nomura Holdings Inc. have cut their full-year growth forecasts to well below the governments’ official growth target of about 5.5 per cent.

That adds social risks to the political pressures confronting Mr Xi as he prepares for a twice-a-decade leadership reshuffle later this year expected to give him a precedent-breaking third term as Communist Party leader.  

"The fundamentals of the Chinese economy, its strong resilience, enormous potentials, vast room for maneuver, and long-term sustainability remain unchanged," Mr Xi said.

"They will provide great dynamism for the stability and recovery of the world economy and broader market opportunities for all countries."

Participants in the annual event held in China's southernmost Hainan province included Israeli President Isaac Herzog, Philippine President Rodrigo Duterte, and International Monetary Fund Managing Director (IMF) Kristalina Georgieva.

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