China Economy Hit by 8 Trillion COVID Expense, Depleting Health Insurance Funds

On February 15th, large-scale protests erupted in the cities of Wuhan, Dalian, and Anshan, where a large number of retired citizens gathered in front of the local government buildings to protest against the Chinese Communist Party's recent healthcare reform policies. Since most of the participants in the rights protection movement were elderly retirees, the movement was dubbed the "white-hair movement" following the "white paper movement" that happened a while ago.

In Wuhan, where the COVID-19 outbreak began, many elderly people gathered at the popular Zhongshan Park and blocked nearby traffic, including Liberation Avenue. This caused the adjacent subway station to close and police to arrive to maintain order. There were physical altercations between police and protesters as police used force to push them back, while protesters chanted slogans like "Give us back our healthcare money!" and "Down with the reactionary government!" Some elderly individuals fainted during the protest. Communication signals were reportedly blocked and several people were taken away by police.

Recently, many provinces in China have disclosed their 2022 epidemic prevention expenses in their 2023 fiscal budget reports. According to China’s Caixin media, 17 out of 31 provinces and cities in China have published their 2022 epidemic prevention expenses, ranging from 1 billion yuan to tens of billions. Guangdong topped the list with 71.139 billion yuan, followed by Zhejiang with 43.509 billion yuan, Beijing with nearly 30 billion yuan, Shanghai with 16.77 billion yuan, and Shaanxi with 19 billion yuan.

On December 7th last year, the CCP officially launched the "ten new measures" to fully relax epidemic prevention, attempting to stimulate the economy by issuing bonds. However, the result seems to have further worsened the local fiscal situation. Economists warn that the debt sustainability of China's local governments is continuously declining.