BEIJING (BLOOMBERG) - The Covid-zero policy is the most "economic and effective" for China and the country is capable of achieving its goal of stamping out infection, said President Xi Jinping on a visit to Wuhan, the city where the virus was first detected in late 2019.

The remarks, reported by state media Xinhua, made clear that the world's No. 2 economy does not plan to back away from an approach of lockdowns and mass testing that has isolated it from a world living with the virus.

Efforts to stamp out the pathogen as it has become increasingly infectious has extracted a tremendous social and economic cost, but China has defied critics that said elimination was not possible as its biggest cities of Beijing and Shanghai squashed outbreaks with months of strict curbs.

Mr Xi's comments are likely to dash hope that China is cautiously embarking on an exit plan, after its travel curbs were unexpectedly eased on Tuesday (June 28).

"China's population base is large, and if 'herd immunity' and 'lying flat' policies were taken, the consequences will be unimaginable," he said, according to Xinhua.

"We would rather temporarily affect a little economic development, than to risk harming people's life safety and physical health, especially the elderly and children."

The comments represent the clearest sign yet that Mr Xi was willing to expend the political power he’s amassed over the past decade defending a policy that has required locking down large swaths of the country’s most economically important cities for weeks on end.

The president characterised Covid Zero as connected to the Communist Party’s “nature and purposes”.  “We have the leadership of the party, we have the communities as the foundation at grassroots level, we have the capability and strength to implement "dynamic-clearance policy" until reaching the final victory,” Mr Xi said, using China’s preferred term for the approach. 

Growth target

The comments come in the run up to a pivotal party congress later this year, in which Mr Xi is expected to secure a precedent-breaking third term in power.

By increasingly tying Covid Zero to his own prestige as a leader, Mr Xi is making it riskier for critics of the policy to speak up and also raising the political stakes for himself. 

China’s Covid-19 outbreaks and an ongoing property market slump have put the government’s economic growth target of around 5.5 per cent out of reach.

In Wuhan, Mr Xi said China “needs to promote the stable and healthy development of the economy as much as possible at the same time” as carrying out the work of pandemic prevention.

Mr Xi also said the country needed to be more self-reliant on developing cutting edge technologies, especially in chip industry and high-end manufacturing, saying the country must “firmly hold the lifeline of science and technology in its own hands”.

Testing protocol

Mr Xi’s remarks come after the country managed to quell its most serious outbreaks since the Wuhan crisis: both Shanghai and Beijing reported zero local cases on Monday, for the first time since Feb 19, with the financial hub in particular emerging from a bruising two-month lockdown. 

The Omicron outbreak has tested its playbook, but China appears to have emerged from that with a new protocol for maintaining Covid Zero indefinitely.

While an easing of travel quarantine buoyed markets on Tuesday as a sign of reopening, officials in the same document codified a standardised approach to mass testing and lockdown that local officials should follow. 

China’s 1.4 billion people live in a new normal of constant testing and tracking.

In the capital of Beijing, residents are required to show a green code on a mobile app that tracks their health status, and take a Covid-19 test every three days to enter any public venue, including restaurants, shops, and mass transportation. Kids over age three must be tested to play in the park.