Chinese provinces will spend more than £42.8bn tackling Covid-19 in 2022, according to figures released by local governments, a figure expected to rise as the pandemic’s heavy cost hits the world’s second-largest economy.
Although national figures are not yet available, at least 20 of China’s 31 provinces have published figures on how much money they spent on measures to control the epidemic.
China abandoned its zero-covid policy in December. It is now trying to revive the sagging economy, which grew just 3% in 2022 from 8.4% in 2021, according to official figures.
Different provinces measure their COVID-19 spending in different ways. Some include spending at all levels of government, while others only include spending at the provincial level.
But according to published data, the southern province of Guangdong, home to 127 million people and China’s largest provincial economy, was the biggest spender. In 2022 it spent 71.1 billion yuan (£8.6 billion) on measures such as vaccinations, testing and emergency benefits for those affected by the pandemic – an increase of more than 50% on the previous year. This spending was equivalent to about 0.6% of the province’s GDP in 2022. Before the pandemic, China spent about 5% of its GDP a year on healthcare.
Beijing spent 26.4 billion yuan mainly on epidemic control and prevention, equivalent to about 111% of the city’s health care budget last year. The country’s financial hub Shanghai spent 16.8 billion yuan on similar Covid-containment measures, including building makeshift hospitals. A two-month total lockdown in Shanghai hit the city’s economy, which is set to shrink by 0.2% in 2022.
Since leaving zero-covid, the Chinese government has taken several measures to stimulate economic growth. On 8 January it reopened its borders to international travel, dropping quarantine requirements for incoming travelers. The government has also announced measures to make it easier for property companies to raise finance after a 10% drop in investment in 2022, the first decline since records began. The real estate industry will account for nearly one-quarter of China’s GDP in 2021, but a crackdown on the sector last year hammered the economy.
Public expenditure can now be redirected towards measures designed to boost the economy. Local governments have begun a recruitment spree for civil servants, with plans to increase recruitment by 16%. Economists at the US investment bank Goldman Sachs forecast that China’s growth rate will reach 6.5% in 2023, driving a 1% increase in global demand.
But for ordinary Chinese, the cost of COVID-19 is too high. In December, China’s National Health Commission stopped publishing data on daily cases amid concerns of a huge increase in infections following the end of the zero-Covid policy. China has officially recorded nearly 80,000 Covid-19 deaths since December, which would be a much lower death rate than Hong Kong experienced in the first two months of the Omicron wave. Still, other indicators suggest that illnesses and deaths remain high: Hospitals and morgues are overcrowded, and doctors in many places are short of COVID-19 drugs.