Although uncertainties aggravated by the war have to be taken into account, this looming economic crisis is rooted in the west’s disastrously short-termist handling of the covid-19 pandemic, of which frequently sought to avoid zero-covid strategies in consideration of the economy, leading in turn to massive outbreaks, inconsistently applied long lockdowns (which were deeply unpopular and implemented ineffectively) and then attempts to forcibly kickstart the economy by injecting trillions worth of stimulus payments and excessive monetary policies, which due to suppressed demand and deteriorating business conditions, then created a tidal wave of inflation and placed burdens on supply chains.

Whilst this strategy allowed western countries to bounce back initially in 2021, the economic merits of such recoveries were exaggerated given the sheer size of GDP slumps some countries had endured, with little consideration given that soon these countries would “come back down to earth” and face additional challenges they had not previously. Even by May 2022, it is quite evident that annual GDP forecasts for most countries were overstated. In particular, the size and duration of the inflation wave was not anticipated, which the US government for one repeatedly wrote off as “transitory”, a miscalculation which proved to be a big mistake, and has forced governments towards fiscal tightening they were not anticipating, posing adverse economic consequences that were not anticipated. In other words, the recovery has faltered before it was even completed.

But China is not in this boat, despite the western triumphalism. Because China has consistently applied a strict, long term and consistent zero-covid policy, which sought to maintain economic stability by pre-emptively quashing outbreaks (from 2020 to 2022), the country was able to maintain natural growth without relying on extreme amounts of stimulus or rolling back interest rates. China grew 2.2% in 2020 and 8.1% in 2021. Without disruption, it was aiming for 5.5% in 2022. Although consumer growth because of these policies was relatively soft, this has also offset the inflation trap and has produced an economic picture whereby China did not have to make economic policies which produced extreme risk, seeking short term recovery at the expense of long term growth options. Therefore, even though Omicron is a challenge, China does not have to resort to extreme policies to get out of this situation which will hamper its future growth, and the Bank of China has seemingly avoided such.