China has fully vaccinated more than 1 billion people, with a total of 2.16bn doses as of 15th Sept, which is 70% of the 1.4 billion population.
More than 97% of adults in the capital of Beijing are now fully vaccinated, as are 80% of the residents over the age of 12 in nearby Tianjin. This is hugely beneficial to the eastern Chinese economy, as inoculations are boosted in these highly densely populated areas, this allows for more people to once again go out and about into the busy Chinese cities without fear of catching the virus, and spend once again. The total number of adults fully vaccinated in Shanghai has also risen to 80%. Another likely benefit to this is the decrease in waiting times for ships and other precious cargo to leave the Chinese docks, as experienced earlier on in the year when COVID-19 cases struck many docks and factories. This will decrease the price for Chinese goods as they become more readily available, which is all the talk as shortages of goods are being witnessed across the UK.
Countries like the UK and Germany have only vaccinated 60% of the population, which is, however, far better than the newly emerging economy of India, which has only seen full vaccinations administered to 15% of the population. This is also the case for the 50% of the population who are vaccinated in the US and Japan. This in turn is expected to have detrimental effects on COVID cases, as the winter months fast approach. When the virus spreads under harsh, colder climates, especially in Europe, this can spike cases and hospitalisations, and notably overrun healthcare services such as the NHS. As far as macroeconomics is concerned, this will be devastating to the labour force for these poorly vaccinated countries. As more people become ill and sick, they will be unable to work, and in countries where internet and online communication is insufficiently available, this will mean an extreme fall in the country's output, and could seriously harm economic growth, at least in the short term.
As we move back to China, Beijing has also exported 800 million doses to the rest of the world. This has been a huge aid to countries struggling with vaccine shortages, as experienced earlier this year in the UK.
Chinese officials have said the country will eventually reopen and rely on the protection afforded by its vaccines. This comes as Chinese economic growth has only grown 1.3% in the last quarter, up from 0.4%, and the country desperately aims to rebound to its once unstoppable growth figures.
The success of the Chinese vaccination programmes has meant that government spending on social protection measures for businesses, as well as for the vaccines for its monumental population, can be reduced, and instead, government spending on other sectors such as its healthcare as it prepares for a harsh winter in terms of public health, can be a priority. This reallocation of spending can help re-boost the Chinese economy, as well stimulate a multiplier effect within the economy. This increase in government spending from increased confidence and reduction in fiscal spending will allow for more revenue for large infrastructure projects in the long term and boost China’s productive capacity.
Furthermore, the ability to now open its borders to foreign travellers and holidaymakers is made available which in turn will see drive-in exports for the Chinese economy in the service sector. Furthermore, spare vaccines once the programme is complete can be exported/donated again for other more deprived countries, boosting the Chinese alliance and potentially shifting their stance on the political stage. This boost of tourism however will mean that aggregate demand will be boosted by firms now being able to open their doors and trade, as well as consumers being more willing to spend due to the vaccine programmes success and cases being so low.
As well as this, productivity increases, as does output, and workers who previously worked at factories can return, meaning this goods led economy can continue producing its high quantity of products, and boost exports even further as this labour-intensive economy can continue to pave the way once again.
Written by Euan Taylor
Research compiled by Steven Li