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China is risking a big hit to the economy and supply chains with zero-Omicron approach

Mount Equity Group Tokyo Japan > News > Markets > China is risking a big hit to the economy and supply chains with zero-Omicron approach

The Covid-19 variant has been cropping up across China in recent days, including in major port cities like Dalian and Tianjin, prompting restrictions that could upend business operations in those places. The rest of the world is also dealing with Omicron, but China is different because of how intent authorities are on preventing any widespread outbreak by locking down cities and curbing travel. The strict approach has so far been effective: China has recorded far fewer Covid-19 cases than many other nations during the pandemic, and its economy was the only major one to grow in 2020.

Omicron, though, threatens to expose some serious flaws in that plan. The variant is much more transmissible than others, making it difficult to contain. And as the rest of the world learns to live with the virus, economists say China’s zero-tolerance strategy is likely to do more bad then good in 2022.

Goldman Sachs, for example, has just slashed its…

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