![]() China's strong centralized decision-making avoids such problems. A highway connecting two cities can provide large benefits overall, but if a town along the route objects to its construction and has a say in the matter, the project might not proceed. ![]() One example is China's rapid infrastructure development. The central government's argument for re-centralization is that it allows Chinese authorities to mobilize resources and make investments that are good for the country but that local governments would never pursue on their own. A recent example is the trade war with the United States, which generated nationalist support but damaged the economies of coastal manufacturing cities like Shanghai. But, because regional governments' interests are not always aligned with those of the national government, re-centralization has been unpopular in many provinces. To counter this tendency, the central government has invested a large share of its growing revenues since the early 2000s in centralizing mechanisms, such as by expanding the bureaucracy and strengthening tax enforcement. Fiscal federalism was very effective at promoting growth, but it also gave regional governments a taste for independence. After the disastrous one-size-fits-all policies of the Great Leap Forward in the 1950s, the post-1978 reform government devolved decision-making to regional governments, which were given much more autonomy over economic policy and were encouraged to compete with one another. Second, there is an ongoing competition within the Chinese leadership between those who believe in strong centralized authority and those who prefer more decentralized governance. If an easing of the lockdown were to result in higher mortality rates among vaccinated Chinese (compared to vaccinated populations elsewhere), China would be deeply and publicly embarrassed. First, while the Chinese government aims to be a global leader in vaccine production, Chinese vaccines are widely considered to be less effective than those being produced and administered elsewhere. Two facts are crucial to understanding the rationale for the lockdown. The fact that the city has recorded only 17 deaths (as of April 20, 2022) has added to the public's anger and frustration. Shanghai officials did not have time to set up the infrastructure needed to sustain a prolonged lockdown, and residents were unable to stock up on enough food before being confined to their homes. And Chinese authorities have introduced additional economic uncertainty by shifting suddenly from a four-day lockdown to an indefinite one. Economists estimate that Shanghai's closure could reduce overall Chinese GDP by 4 percent this year. ![]() Moreover, complete lockdowns have high economic costs. And while China's elderly population does have a surprisingly low vaccination rate (around 60 percent), immunizing this cohort is well within the country's messaging and mobilization capabilities. Yet one is left wondering why the authorities didn't opt for a less costly alternative to a complete lockdown.Īfter all, Omicron, which now accounts for almost all new cases globally, has only mild effects on vaccinated people. The official reason for this drastic policy shift is that citywide testing had revealed high infection rates. CHICAGO ― After signaling that it was moving to a more nuanced COVID-19 policy, Shanghai ― a city of 26 million ― was pressured by the central government to lock down in late March, and has only just started to ease restrictions after almost one month. ![]()
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