China's Economy May Slow Down Due To COVID Policy, Xi's Ambition

China's economy is expected to slow down ahead of the ruling Communist Party's twice-a-decade congress in fall 2022 as President Xi Jinping's radical "zero corona" policy and socialist ambition are set to choke private spending in the country, analyst Tomoyuki Tachikawa wrote recently for Kyodo News.

Photo Insert: To make an achievement in the economic field to secure a controversial third term as party leader at the congress, Xi would also promote "common prosperity."

Even after the end of the Beijing Winter Olympics, slated to start Feb. 4, the Chinese government is likely to continue implementing strong anti-epidemic measures, including locking down major cities and suspending all public transportation services.

To make an achievement in the economic field to secure a controversial third term as party leader at the congress, Xi would also promote "common prosperity," aimed at reducing income gaps at home, by levying more regulations on the nation's lucrative sectors.

Consumption in China has been "tepid" as the movements of people have recovered only to half the level before the coronavirus outbreak began nearly two years ago, said Kokichiro Mio, a senior researcher at the NLI Research Institute in Tokyo.

A scholar familiar with the Chinese government's thinking said "the Communist Party's zero corona policy is certain to remain in place almost throughout 2022, given that President Xi has been keen to end the congress successfully after the Beijing Olympics."

"For at least another one year, Chinese citizens and companies would be frustrated by severe restrictions by authorities and lose their motivation to increase spending and investment. This would put serious downward pressure on the economy," the scholar, speaking on condition of anonymity, said.

The world's second-largest economy grew 8.1 percent in 2021 from the previous year with domestic demand recuperating from the coronavirus shock, marking the biggest expansion in 10 years, government data showed Monday.

The economy, however, edged up only 4.0 percent in the October-December period of 2021 alone, as the outlook has become dim amid mounting fears about another wave of infections, first detected in China's central city of Wuhan in late 2019.

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