Thanks to COVID, China’s New Currency Is the Potato

Forget the digital yuan. The People’s Republic of China has a new currency. It is called potato.

University students in Xian prefer to charge potatoes over cash for tuition services, explains Charles Burton, China watchdog at the McDonald-Laurier Institute newsweek, The tutors also accept rice, he says.

Want to buy cotton swabs in that central Chinese city of 13 million? Potato is a medium of exchange.

Xian residents are exchanging cigarettes for cabbage, dishwashing liquid for apples and sanitary pads for vegetables. One video shows a resident trading a Nintendo Switch console for a pack of instant noodles and two steamed buns. radio free asia reports That one resident offered a smartphone and a tablet for rice.

An apparently disappointed poster on a Twitter-like Weibo site Talked about a “return to a primitive society”.

In once-modern but now-primitive Xian, authorities are enforcing isolation to end the transmission of COVID-19. residents, for example, have Not allowed to leave the house to buy food From 27th December. Earlier, they could go out once every three days to stock up.

Officials are delivering food, but many residents have received either little or nothing. The joke at Jian is that the delivery is limited to the number of journalists who can document the delivery for promotional purposes.

China has a “zero-Covid” policy designed to prevent the spread of any disease. Accordingly, the authorities in Xian are taking extreme measures.

Xian isn’t the only place that’s been locked down. Yuzhou, a city of 1.1 million people in central Henan province, was locked down this month because Three asymptomatic cases in two days, Only disease control officials are allowed to go out. have a case That’s all the authorities had to do to shut down Dongxing last month in southern Guangxi.

Many Chinese officials and scientists believe that Beijing’s extreme measures do not work and end up harming the country. So why is the Communist Party so insisting on maintaining an apparently harmful policy?

There are probably three reasons for the Chinese regime to panic. First, the International Olympic Committee (IOC) may postpone the Winter Olympics in Beijing, which begins on February 4, because of the inability of local authorities to control the disease.

The IOC has finally postponed the 2020 Tokyo Summer Games by a year due to COVID concerns. Dick Pound, the longest-serving member of the Olympic Governing Board also raised the possibility of postponement In USA Today Interview, though he thought the Olympics would go ahead as scheduled.

Second, the rapidly spreading outbreak challenges the legitimacy of the Communist Party as the regime began to argue in early 2020 that its control of the disease showed the superiority of Chinese communism over democracy – and American democracy in particular. Beijing has left no stone unturned to campaign, so even today every COVID infection undermines the Communist Party’s rule.

Renminbi and New Taiwan dollar (TWD) banknotes arranged in Hong Kong on July 3, 2018.
S3studio/Getty Images

Third, China’s COVID-19 vaccines are usually ineffective And it may not have any effect on the Omicron version. A strategy to learn to live with it would certainly be less viable for a country with no security other than isolation.

Isolation—return to a primitive society—has consequences. And disease control measures are now hitting the Chinese economy hard. No wonder Xi Jinping’s 2022 New Year’s address was more remarkable than what he didn’t say. ruler of china Unlike previous years, did not talk about GDP,

GDP is being impacted as manufacturing is being hit, as can be seen in Xian’s semiconductor manufacturing sector. So far, Samsung Electronics has announced only minor disruptions to the production schedule at its Xian-area plant, but Micron Technology’s facility there is running out due to a labor shortage, not to exceed 50 percent of the capacity,

Not only foreign companies have been affected. As a result of nationwide disease control measures Unprecedented shutdown of small Chinese companies, the “backbone” of China’s private sector. 4.37 million small businesses closed their doors in the first 11 months of 2021. During the same period, 1.32 million were formed, which is significantly less than the 6.13 million formed the previous year. In 2020, China lost 4.45 million small businesses, almost twice what it lost in the previous year and ten times in 2018. For the first time in two decades, more than openings have been closed. These companies are the core of China’s export sector.

Expect more export-oriented companies to close as many workers, due to COVID-19 fears, likely won’t return to their jobs after the long Lunar New Year break that begins next month.

Therefore, China’s disease-control measures are bound to exacerbate global supply-chain disruptions. “Unless they are removed quickly, China’s extreme zero-COVID policies are likely to cause even bigger problems for companies that source from the People’s Republic of either intellectual property theft And a fake legal system, or a long-standing campaign of political oppression like Xi Jinping’s campaign,” tells Washington, DC-based business expert Alan Tonelson. newsweek, “Disruptions are bound to last beyond the current outbreak in Xian. Ultimately, any company that sources from China faces the prospect of complete and sudden shutdowns of production and transportation systems, even when the smallest virus outbreaks.”

The totalitarian-style lockdown means the disruption will last for a long time. As Tonelson, who blogs at RealityCheck, says, “The highly permeable Omicron version practically guarantees that infection clusters will keep popping up for several months.”

The Communist Party may be hoping that there are lots of potatoes. Goldman Sachs now believes China will be tightly closed until spring 2023.

Gordon G. Chang is the author of China’s coming fall, Follow him on Twitter: @GordonGChang,

The views expressed in this article are those of the author.