Economy

Estimating The True Death Toll


The Catastrophic End of Zero-COVID

China abandoned its zero-COVID program in December 2022. Travel restrictions were lifted. Quarantines ended. The government stopped testing, stopped even collecting data related to COVID, and declared victory.

Many Western experts, taking it at face value, expected an economic boom. Typical was a February 2023 article in The Economist entitled “What Pandemic? China’s Ultra-Fast Economic Recovery.” China, so they said, was “back with a vengeance.” The authors claimed to discern “evidence of a surprisingly rapid consumer revival in the world’s second-biggest economy” – a trend so strong that “the country’s reopening will boost global growth, perhaps uncomfortably.”

True, the concrete indicia were sketchy. The Economist cited record attendance at a mausoleum (ambiguous?), and long lines waiting to catch cable cars at a popular tourist site. (Not typical metrics of economic performance.) Optimism rested in large part on the “unusually liquid” status of Chinese households, with savings greater than 100% of the country’s GDP, purportedly ready to drive a “spending boom.” The gung-ho account described the “frenetic pace” of “revenge spending”; a “spree”; and a “splurge that will make a welcome contribution to global growth.”

Paeans to the Great Chinese Growth Engine flooded the media. Released from the zero-COVID cage, the Chinese economy would roar back to business as usual. Even the sober folks at the Federal Reserve bought into it.

  • “Despite initial uncertainty about sustained COVID-19 outbreaks, the Chinese economy has begun to rebound, driven by domestic consumption.” – The Kansas City Federal Reserve

BusinessWeek’s contribution was titled “Welcome Back: China Rejoins the Party.” It would be good news for the rest of us, too – “the easing of COVID restrictions may be the boost the flagging world economy needs.”

  • “Around the world economies that rely on tourism and commodities are set to receive a shot in the arm from China’s sudden reopening, as consumers unleash some of the 5.6 trillion yuan in excess savings they built up during the pandemic… Thanks to the reopening, China may account for half of then global gross domestic product growth this year.” – BloombergBusinessWeek (Jan. 18, 2023)

[A passing comment – a buildup of savings is often not seen as a sign of economic health, as economists since Keynes have realized. See Martin Wolf’s commentary in The Financial Times from March 5 of this year – “China’s Excess Savings Are A Danger.”]

In any case, within months it was becoming clear that the projected recovery was not taking place.

  • “After three years of strict ‘zero-COVID’ lockdowns, analysts had expected China’s economy to quickly recover this year. But recent sets of data suggest otherwise. Retail sales, industrial output and investment in July all grew at a slower-than-expected pace. In the meantime, a fall in aggregate demand has put deflationary pressure on the world’s second-largest economy.” – NPR (August 16, 2023)

The end of zero-COVID was not the end of COVID. Infections in China exploded, affecting more than a billion people in just a few weeks. No other country has experienced so many COVID cases in such a short period of time. The healthcare system was completely overwhelmed. And as a June 2023 report in Nature magazine warned —

  • “The latest surge in COVID-19 cases in China is not surprising to researchers, who say that the country will see an infection cycle every six months now that all COVID-19 restrictions have been removed and highly infectious variants are dominant. But they caution that rolling waves of infection carry the risk of new variants emerging.”

Assessing the full medical, social, and economic impact of the pandemic in China starts with understanding the true toll on the Chinese population. Massive outbreaks in other places (e.g., New Zealand, Singapore, and Hong Kong) following the end of zero-COVID policies offer analogies for what China is experiencing, but the surge there is much larger and more intense.

How much larger? It is hard to say. Chinese government statistics on COVID are “useless” (The Economist’s assessment), for reasons described in the previous column. But other types of government data can be used to estimate the true death toll, at least to a reasonable order of magnitude.

Estimating True COVID Mortality in China

How many Chinese have died? Official and unofficial accounts diverge.

Beijing’s message has been triumphalist.

  • “The Politburo Standing Committee said China has ‘created a miracle in human history’ as it has ‘successfully pulled through a pandemic,’ according to a summary published by state-run news agency Xinhua. The summary also said the group claimed that China had kept the lowest COVID-19 fatality rate in the world.” – CNN

On the other hand –

  • “Every unofficial indicator suggests that China is in the grip of a major surge. Pharmacy shelves have been largely emptied of cold and flu drugs and ibuprofen tablets are being sold individually on government orders, with a limit of six pills per customer. Doctors on social media describe hospitals with staff infection rates of 80%.” – The British Medical Journal (January 2023)

China’s active suppression of COVID data makes it impossible to answer this question directly. Incidental data sources (such as the sudden and acute shortages of pharmaceutical products, or satellite images of clogged roadways and parking lots near funeral homes and crematoriums in Chinese cities) suggest the scale of the problem. But they do not easily translate into hard number estimates.

Analysts have used three main approaches to assess the true impact of COVID in China.

  1. Calculations of “excess mortality”—death counts well above the long-term trend lines;
  2. Extrapolations based on ratios derived from comparable countries; and
  3. Models based on demographic or economic data that correlate closely with COVID outcomes

1. Excess Mortality Calculations

This is the most straightforward approach, and arguably the most convincing. It relies entirely on official Chinese government figures.

Death rates are generally very stable. In most countries today, the crude death rate from all causes rises gently as the population ages. “Excess mortality” is defined as a significant upward deviation from the long-term trend.

Beginning in 2019, China experienced a sudden and significant inflection in the crude death rate. The multi-year average rate of annual increase jumps by a factor of five and remains elevated.

The total over four years from 2019-2022 amounts to about 1.6 million excess deaths. (2023 added another 800,000 “excess deaths” above the pre-COVID baseline.)

The Economist magazine has modeled excess mortality extensively and with technical sophistication. As of July 2023, their model produced estimates of between 560,000 and 3.7 million excess deaths in China, with a central “best estimate” of just under 2 million deaths (roughly in line with my simple estimate provided above).

The most recent assessment of excess mortality comes from an article published in the Journal of the American Medical Association on August 24, 2023.

  • “An estimated 1.87 million excess deaths occurred among individuals 30 years and older during the first 2 months after the end of China’s zero-COVID policy. Excess deaths predominantly occurred among older individuals and were observed across all provinces in Mainland China.” [Emphasis added.]

In summary, it is clear that COVID-19 struck China hard, starting in 2019, and persisting over the past four years. The crude death rate skyrocketed, reflecting millions of “excess” deaths above the normal long-term trend.

2. Estimates Based on Comparables

This approach relies on observed ratios for infection and mortality in other countries (“comparables”) where COVID data is more complete and of higher quality. These ratios are then applied to the Chinese population to derive an estimate of the likely impact there.

Strong comparables would combine: (1) similar cultural and ethnic background; (2) similar economic systems; (3) similar zero-COVID regimes; and (4) more reliable data.

Hong Kong is the best case for comparison. The city maintained a zero-COVID regime (albeit less stringent than that on the mainland) until February 2022, when it was overwhelmed by Omicron. In March 2022, the British Medical Journal wrote:

  • “Hong Kong 1715535207 reports the world’s highest death rate as the zero COVID strategy failed. Coronavirus infections are surging…Previously a global model for COVID containment, transmission of SARS-CoV-2 has soared as Hong Kong’s zero COVID strategy has failed to contain the more contagious omicron variant.” [Emphasis added]

In the 12 months following the breakdown of Hong Kong’s zero-COVID regime, the cumulative COVID death count in Hong Kong increased by over 6000 percent—from 213 to 13,370. (The increase in the U.S. over the same period was 22 percent.) This is evidence for the catastrophic impact of the Omicron variant on a poorly prepared population, It underscores the point that the return-to-zero in China’s reported daily death rate after March 2023 is epidemiologically impossible. Applying Hong Kong’s mortality rate of 184 COVID deaths per 100,000 population to China’s population of roughly 1.4 billion people would yield an estimate of about 2.5 million deaths, which is in line with the excess mortality figures cited above.

A Stanford University study modeled China’s death count based on Hong Kong and Korean experiences resulted in lower estimates: “987,455 and 619,549 maximal COVID-19 deaths, respectively, assuming the entire China population was infected.” Leaked official Chinese reports indicate that infection rates for the Chinese population reached 80 percent to 90 percent within a few weeks after the lifting of zero-COVID in December 2022.

Aggravating Factors

There are important differences, however, between China and even the closest comparables, which point to a more severe impact for China. These aggravating factors include:

  1. Age & Low Vaccination Rates: Significant segments of the elderly population in China have not been fully vaccinated. For example, during the Shanghai outbreak, officials reported that only 38 percent of residents over the age of 60 were “fully vaccinated” even by Chinese standards. This “age risk” is acute. In a detailed study of Hong Kong COVID mortality patterns, 96 percent of all deaths occurred in people over 60, and the death rate for those over 80 was 867 times the rate for those in their 20s. As of March 2022, there were 36 million elderly Chinese who were completely unvaccinated, including 13 million over 80. The Stanford study cited above concluded that “[t]he most critical factor that can affect total COVID-19 fatalities in China is the extent to which the elderly can be protected.”
  2. Vaccine Efficacy: The “immunologically unprepared” or “functionally unvaccinated” status of the main body of the Chinese population, due to less effective Chinese vaccines (compared to those used elsewhere), and diminishing immunity benefits over time are reflected in high rates of infection since the end of zero-COVID (as acknowledged in leaks from official sources there).
  3. Healthcare Facilities: The well-known institutional deficits in the Chinese healthcare system, fewer intensive care units, fewer front-line personnel (especially nurses, and especially in rural areas), would likely translate into higher CFRs (i.e., more sick people would die due to inadequate care). A 2022 study by Chinese and American scientists published in Nature summarized the downside considerations and noted: “The level of immunity induced by the vaccination campaign would be insufficient to prevent an Omicron wave that would result in exceeding critical care capacity with a projected intensive care unit peak demand of 15.6 times the existing capacity and causing approximately 1.55 million deaths.”

Ultimately, estimates based on the “comparables” approach are roughly in line with estimates based on excess mortality, and are five to 30 times higher than the official COVID death count published by the Chinese government.

3. Models

COVID rates for China can also be estimated from various public data sources that partially and/or indirectly correlate COVID mortality. In February 2023, The New York Times reported on the results of a number of different modeling approaches, which converged in an estimate of 1 million to 1.5 million Chinese deaths through the end of 2022, and before the real impact of the lifting of zero-COVID (again in line with the excess mortality calculations described in the previous section.) A Chinese-led study extrapolated from the Shanghai outbreak in Spring 2022 and estimated 1.6 million deaths by mid-2023.

Airfinity, a health data analytics group, modeled 600,000 deaths in the first month after the lifting of zero-COVID—10 times China’s official figure during the same time period—and 1.7 million deaths by April 2023. The Seattle-based Institute for Health Metrics and Evaluation forecast about 300,000 deaths in China from the end of zero-COVID through the first quarter of 2023. (This model has been widely criticized as prone to significant underestimates for many countries, and updating was “paused” at the end of 2022. Even so, its final forecast was 100 percent higher than the official Chinese figures.)

And as noted earlier, The Economist’s figure for COVID deaths is about 2 million (central estimate) as of July 2023 – 1500 percent higher than the official death tolls.

Conclusions and Questions

China’s zero-COVID policy effectively meant zero reporting of COVID. The suppression of data began early and instinctively, and became the fixed official policy in April 2020. It did not really change even after zero-COVID was lifted in December 2022. “Zero reporting” continues to this day. The most basic data are apparently no longer even being collected.

Consideration of anomalies in the raw mortality figures, infection rates, and case-fatality rates all show impossibly low figures for China compared to other countries with similar demographic and policy profiles. Hong Kong’s infection rate is 143 times higher than the infection rate reported for the Chinese Mainland, and the mortality rate is 30 times higher than the mainland’s reported rate.

In particular, the extremely low reported Case-Fatality Rate (CFR) reported by China (described in the previous column) — 33 times lower than the CFR of Hong Kong — is medically inconceivable. The fate of an infected person in Mainland China cannot have been very different from that of a COVID victim in Hong Kong or anywhere else. In fact, the institutional deficits in China’s healthcare system would imply less effective treatment of COVID patients compared to Hong Kong or Korea.

The number of Chinese killed by COVID was likely between 1.5 and 2 million through mid-2023, with estimates ranging up to 3.5 million at the high end. The number who became seriously ill would have been in the tens of millions, stressing the healthcare system, diverting resources from productive uses, and hobbling the economy. Because of Beijing’s active suppression of the key data, it may never be possible to completely isolate and quantify the effects of this factor, but it must be accounted one of the major contributors to China’s current slowdown.


For more information, see Part 1 of this essay, here:

ForbesThe Missing Factor In Explanations Of China’s Economic Distress: COVID (Part 1: The Cover-Up)



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Financial World News @2024. All Rights Reserved.