COVID-19 expenses pile misery on the Chinese economy as provinces reveal staggering data

China’s beleaguered provinces reportedly spent $45.80 billion on anti-Covid measures in 2022. The figure is expected to rise as China still reels under the economic stress induced by the pandemic. While comprehensive national data on governmental spending is not available in China, at least 20 of the country’s 31 provinces have revealed details about their COVID-19 expenses. Of all, China’s southernmost province of Guangdong spent the highest amount of money on checking the spread of the pandemic. It spent a whopping amount of $9.20 billion alone on testing and vaccination. This amount was equal to 0.6 per cent of the province’s Gross Domestic Product last year.

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Anti-Covid spending in top Chinese cities

The Chinese capital city of Beijing topped the chart in Covid expenses with $3.85 billion in 2022. This was equal to 111 per cent of the city’s total annual healthcare budget. Shanghai, China’s financial hub, also spent $2.45 billion on anti-COVID-19 measures. Shanghai's economy suffered greatly during the two months of complete lockdown, and it shrank by 0.2% in 2022.

Latest Covid updates from China

The cost of COVID-19 is still high for the average Chinese people. China's National Health Commission stopped publishing data on daily cases in December due to worries that there would be a sharp increase in infections following the withdrawal of the Zero-Covid policy. China has officially documented roughly 80,000 Covid-19 deaths since December, which would be a significantly lower death rate than Hong Kong suffered in the first two months of its Omicron wave.

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Chinese provinces under great economic stress

China’s 31 provinces are already buried under a huge stockpile of outstanding bonds. They are close to breaching the Ministry of Finance’s threshold of 120 per cent of their income. Local authorities are expected to hit a tall maturity wall in upcoming years. As per a report by Bloomberg, bonds worth $2.1 trillion are due over the next 5 years, which is roughly equal to 40 per cent of their total outstanding debt.

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