Economic Impacts of China’s Zero-COVID Policies

53 Pages Posted: 1 May 2023 Last revised: 31 Dec 2023

See all articles by Da Gong

Da Gong

University of California, Riverside (UCR)

Zhuocheng Shang

University of California, Riverside (UCR)

Yaqin Su

Hunan University

Andong Yan

University of California, Riverside (UCR)

Qi Zhang

Autonomous University of Barcelona

Date Written: April 17, 2023

Abstract

This paper presents an investigation of the economic consequences of the zero-COVID policy implemented by the Chinese government as a pilot experiment in using big data for country management from 2020 to 2022. Our study includes an original county-daily panel data set on the COVID-19 Risk Level issued by the State Council of the People’s Republic of China (PRC). To measure economic activities, we used satellite data on night lights and PM2.5, and geographical data on population mobility. Our findings indicate that the zero-COVID policy did not result in significant economic loss in 2021. However, in 2022, when the Omicron variant emerged, a stricter zero-COVID policy led to a 30% decline in mobility, a 1.17% decrease in PM2.5 and a 7.7% reduction in night lights. Based on our calculations, China experienced a 3.9% loss in GDP as a consequence of the implementation of the zero-COVID policy in 2022.

Keywords: COVID-19, zero-COVID policy, Air pollution, Human mobility, Night lights

JEL Classification: I18, D04, Q53

Suggested Citation

Gong, Da and Shang, Zhuocheng and Su, Yaqin and Yan, Andong and Zhang, Qi, Economic Impacts of China’s Zero-COVID Policies (April 17, 2023). Available at SSRN: https://ssrn.com/abstract=4422902 or http://dx.doi.org/10.2139/ssrn.4422902

Da Gong (Contact Author)

University of California, Riverside (UCR) ( email )

900 University Avenue
Riverside, CA 92521
United States

Zhuocheng Shang

University of California, Riverside (UCR) ( email )

900 University Avenue
Riverside, CA 92521
United States

Yaqin Su

Hunan University ( email )

2 Lushan South Rd
Changsha, CA Hunan 410082
China

Andong Yan

University of California, Riverside (UCR) ( email )

900 University Avenue
Riverside, CA 92521
United States

Qi Zhang

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

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