China's regional governments spent billions on COVID prevention and control, a budget report reveals

Many of China's regional governments have revealed the enormous expenses incurred in order to enforce the country's zero-Covid policy. The whopping amounts corroborate state media reports that suggested that the huge costs were a primary reason for Beijing to abruptly pull the plug on its Covid policy.

A report published by the state-owned Xinhua News Agency on January 8, the day when Beijing lifted travel restrictions, talked about the main reasons behind the sudden change on the government's Covid policy.

“It is difficult to eliminate the coronavirus, and the social cost and price of Covid prevention and control are rising,” it said.

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A provincial budget report released on Friday revealed that Guangdong, the country’s top province by economic output, has spent a total of 146.8 billion yuan ($22 billion) on preventive measures since the beginning of 2020. It was mostly spent ontesting, vaccination and made up for other policy enforcement-related expenses.

Also Read | Hit by Covid restrictions, China's economy grew 3% in 2022

During the three years, Covid-related spending saw a surge of about 50 per cent each year. It hit a peak of 71.1 billion yuan ($10.6 billion) in 2022, and is equivalent to 35 per cent of the province’s spending on research and development.

The figure even exceeds the amount the country had spent on establishing its national chip fund, a hallmark initiative of President Xi Jinping’s administration. Set up on 2014, China Integrated Circuit Industry Investment Fund had an initial investment of $138.7 billion yuan ($21 billion.)

Notably, the local governments of the county started convening for annual legislative sessions last week. They will be talking about their policy goals for the new year at the meeting. Most of them are facing a shortage of cash due to the COVID-19 curbs that put immense pressure on the entire economy.

The meeting will culminate in the national parliamentary session in March where Xi will mention the nation’s GDP growth target, as well as its budget plans and other goals.

(With inputs from agencies)

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