(Bloomberg) — China is “crab-walking” toward the end of Covid Zero, said former Australian Prime Minister Kevin Rudd, who predicted the world’s No. 2 economy will make major changes in the strategy by the middle of 2023.
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“Barring a new variation of the pandemic that we thus had not dreamt of yet, I think China will be by mid-year well on its way to being out of this,” he said Thursday during a panel discussion on China at the Bloomberg New Economy Forum in Singapore.
“That will have a huge positive impact on domestic consumer demand, which has been suppressed for a very long period of time.”
China has pursued a zero-tolerance approach to the virus for nearly three years. The closed borders, mass testing and snap lockdowns have hurt the economy and contributed to rising unemployment, especially among young people.
The government has signaled some easing of restrictions lately by reducing quarantine times and pulling back on testing — though health officials in Beijing have characterized that overhaul of the Covid-19 playbook as a refinement of rules and not a relaxation of controls. Lockdowns and movement curbs remain a significant part of life for many Chinese as cases rise.
The ruling Communist Party’s flagship People’s Daily newspaper said in an editorial Thursday that the government will stick with Covid Zero.
Read More: China’s Forgotten Covid Zero Lockdown Has Just Hit 100 Days
Speaking on the same panel at the NEF, South China Morning Post editor-in-chief Tammy Tam said the legal environment in Hong Kong provides many opportunities for businesses.
Since 2019, when the city was rocked by historic and sometimes violent anti-government protests, China under President Xi Jinping has moved to tighten its grip on the city, imposing a national security law and revamping the electoral system.
“When Xi visited Hong Kong on July 1, he made it public that Hong Kong’s common law system will be here to stay,” she said. “Under the common law system, it also provides a lot of opportunities.”
The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
In other remarks on China at the NEF:
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James McGregor, the chairman for APCO Worldwide Greater China, said Beijing needs to address dampened consumer confidence given the rolling Covid outbreaks and lockdowns
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McGregor added that the government may need to “move ahead with some economic reforms that we’re not expecting out of necessity”
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In a separate conversation at the forum held by video link, Wang Huiyao, founder of the Center for China and Globalization, a policy research group in Beijing, said the Asian nation is looking for ways to address challenges such as bringing more people in the middle class and handling its hundreds of millions of migrant workers
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Wang also called for more dialogue between China and the US after the meeting on Monday between Xi and President Joe Biden at the Group of 20 gathering in Bali, Indonesia, predicting that Beijing will start sending more officials to America as part of that effort
–With assistance from Alfred Cang and Rebecca Choong Wilkins.
(Updates with more comments from other speakers.)
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