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China: How and When Will the Zero-Covid Policy End?

March 7, 2022
By Gabriel Wildau

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Declarations of an official end to the Covid-19 pandemic in several countries are leading Chinese policymakers to quietly consider their own exit from a strict zero-Covid policy. The rollout of domestically developed mRNA vaccines and effective antiviral treatments are crucial preconditions for China's exit from zero-tolerance. In Hong Kong, restoring zero-Covid appears impossible, and mainland authorities now view the city as a testing site for temporary measures that the mainland could use for its own transition to a policy of co-existence.

Despite predictions that the Omicron variant would overwhelm China's defenses and render the government's zero-tolerance policy untenable, that policy has proven resilient in the mainland. Still unresolved, however, is how and under what conditions Beijing will eventually exit the policy, especially given concerns that lack of acquired immunity has left the population more exposed to Omicron than other countries.

So long as Covid-19 was causing widespread illness, death, and stress on health systems around the world, political support inside China for maintaining zero-tolerance has remained solid. Even now, our base case remains that relaxation is unlikely before the 20th Party Congress late this year – probably in November. Yet the sharp global decline in infections, combined with recent decisions by several European countries to declare a formal end to the pandemic, is leading to quiet discussions inside China about shifting towards a policy of co-existence.

It is now at least possible that this shift will begin earlier than November. The more China emerges as an obvious global outlier, while the rest of the world enters a post-Covid-19 era, the more zero-tolerance will transform from a source of pride into an embarrassment for China's leadership, generating pressure on them to plot an exit.

Two key conditions are required for China to phase out zero-tolerance. First is the introduction of mRNA vaccines. Beijing's unwillingness to approve the BioNTech jab, despite a long-pending application from Fosun Pharmaceutical, is apparently motivated by nationalism. But ArCoV, an mRNA vaccine developed by two Chinese companies, has entered late-stage phase three trials, and two other mRNA candidates are in phase two. The second condition is effective antiviral treatments, and here, too, there is progress. In December, authorities approved an antibody infusion treatment developed by Brii Biosciences, and in February they approved Pfizer's Paxlovid antibody pill.

Beyond vaccines and treatments, exiting zero-Covid will require a significant public education campaign to prepare the public for likely spikes in infections. Top officials and state media will begin signaling a pending shift before policies actually change. Indeed, this public education campaign appears to have started already, albeit tentatively. On 28 February, Zeng Guang, chief epidemiologist of the Chinese Center for Disease Control and Prevention, published a post on his personal Weibo account that broached the topic in greater detail than any other government scientist or policymaker.

Zeng is perhaps China's most credible scientific voice on Covid-19 issues, and though he published the analysis only on his personal social media account, it still appears to be an important policy signal. He presents the Western approach in a fair-minded way, explaining its reasoning without dwelling on its failures, unlike previous pronouncements by top policymakers and state media. He notes a consensus among Chinese and Western scientists that Omicron is less severe than earlier variants, leading him to predict that Chinese and non-Chinese policies towards the virus will eventually converge.

Though he does not indicate a specific timeline, he noted that the current policy "will not remain forever" and that co-existence with the virus is the long-term goal. On the other hand, Zeng noted that China is not in a hurry to "open its doors" during the traditional early-spring flu season. He concludes: "In the near future and at an appropriate time, China will definitely present a Chinese-style roadmap for co-existence with the virus."

Public discussion of an end to zero-tolerance remains rare – indeed, some Chinese media deleted articles about Zeng's post, even though the post itself remains uncensored on Weibo. Still, Zeng's analysis suggests that in private, policymakers are actively discussing the issue.

Hong Kong as Proving Ground

In contrast to the mainland's successful containment, in Hong Kong Covid-19 continues to rage, and it now appears unlikely that the city can ever return to a state of near-zero. Instead, mainland officials now appear to view Hong Kong as a testing ground for methods of fighting infection surges without the use of strict lockdowns and as a source of data on the effectiveness of antiviral treatments.

But mainland officials will seek to avoid ugly scenes like those in Hong Kong, where patients on gurneys lay outdoors waiting for space in overloaded hospitals. Hong Kong has also demonstrated the vulnerabilities that arise from a large population of unvaccinated elderly residents. In the mainland, around 90% of the population is fully vaccinated, but among those over 80, the ratio is only around 50%. Local officials on the mainland have not pressed the elderly to get vaccinated due to concerns about adverse reactions.

Hong Kong has also illustrated the need for public education designed to discourage patients with non-severe cases from visiting the hospital. As previously noted, at one point last month, around 80% of Covid-19-related ambulance calls in Hong Kong were from asymptomatic patients who had tested positive with at-home tests. Until now, the policy in both the mainland and Hong Kong has been to send all positive cases to the hospital or central quarantine, which may have reinforced a cultural tendency to visit the hospital for even mild illness.

Transitional Arrangements

The mainland's shift to a co-existence policy will be gradual. Thresholds for city-wide mass testing and central quarantine of close contacts could be raised. The bubble system used for the Winter Olympics could be replicated in other cities, enabling them to host international conferences and sporting events. A vaccine passport system could exempt fully vaccinated visitors from the strictest quarantine requirements. These prevention policies would be paired with preparations for shortages of medical staff, tests, and hospital beds. These preparations would include protocols for rationing limited supplies of antiviral treatments and mRNA vaccines so that the most vulnerable populations gain first access.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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