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Expect millions of COVID deaths in China in coming weeks
Hey, everyone, Peter Zeihan here coming to you from Colorado from my kitchen where I am currently suffering through the flu, which is all kinds of not fun.
Anyway, I thought that would be a perfect backdrop to talk about our favorite communicable disease, COVID, because we now have a situation brewing in China that is getting very sketchy, very fast.
The Chinese, in reaction to the late November, early December protests that eventually involved millions of people, have decided to start loosening their regulations on social control that are COVID-related. And it’s leading to a fast outbreak that is going to be very difficult to put numbers on much of this policy.
The Chinese have discontinued their use of their social monitoring app for COVID, which a lot of people thought it was never gonna go away, because it was great for social control, but they’ve got other methods for doing it. So I was never really overly concerned there.
If you’ve got mild symptoms, you can recover from home rather than having to go to a quarantine clinic. And the quarantine clinics are about what you would expect from a government institution where people don’t have a choice where they can go, they were basically prisons that had a modicum of medical assistance. And they were not particularly hygienic. And a lot of people got co-infections that came from the times there. There’s also room now for provincial and local governments to set and lessen restrictions of their own for the first time. And we are seeing a general mobilization of the health system across the Chinese system to deal with the anticipated surge in cases and it’s wildly wildly insufficient. What we’re seeing there is something going down that is very similar to what the United States went through back when we had our Omicron outbreak in January of February of 2022. Anyway, lots of businesses are closed, a lot of the testing facilities are closed, because they can’t find enough workers who are not infected to do the tests in the first place. So China’s data has always been sketchy at best. And now in many cases, they’re not even attempting to generate it. We’re also seeing significant shortages of common pharmacy items and drugs and anything you’d use to treat flu like symptoms. The scale of what’s coming is kind of difficult to wrap your mind around. So the United States has 330 million people. And one of the common criticisms of the American healthcare system, which is accurate, is that our healthcare system is awful at actually keeping people healthy. But it’s excellent at providing critical care. The Chinese system is not good at keeping people healthy either. And it sucks at providing critical care. And in the case of the United States, with our 330 million people, we still lost over a million citizens over the three years of the epidemic to date. Now, the Chinese deaths to this point had been a rounding error, because the Chinese have succeeded in keeping the general population away from the virus and they you know, deserve some kudos for that. But the Chinese population is not nearly as healthy as the American population. If you can imagine that. On average, the population that is older has been for about a decade. And if some new data revisions that they’re working on prove true, probably closer to and in relative terms, more Chinese are diabetic than Americans. And that has generally proven to be like the number one comorbidity factor when you’re looking at COVID. And all of a sudden, this is all going down at once. I think that the best way to think about this is if you think about the American COVID experience through 2020, 2021 and 2022. Things came in phases. We were first exposed to the original virus, and then we had alpha and then we had delta then we have Omicron. And about the time that alpha was popping up, we were getting mass vaccination and play with mRNA vaccines that proved to be wildly effective. And so we had our initial death wave. And then we had our vaccination and then we had the delta delta wave and then we had this mass infection with Omicron at the beginning of this year.
So pretty much everyone in the United States has now been exposed to at least one of the strains most of us two or more. And most of us have gotten vaccinated and with a plurality of those people are actually getting boosted people like me if you know immunocompromised, I think I’ve had five shots down.
The point is it didn’t happen all at once. And we all have experienced a degree of exposure and protection. The Chinese don’t have that. The Chinese vaccine was barely functional against the original wild strain out of Wuhan and against the current Omicron q1 One, I can’t even remember the name of the strain against the current strain, it doesn’t work at all. And say what you will about the Chinese health system, the lock down to the perpetual lock downs did succeed at limiting exposure, so no one has natural immunity either. So you cut all this loose at the same time and we’re talking millions of deaths because the RS zero for the current strain. What’s the best way to do this? Let me compare it to measles. So measles has an R zero of 1218 which means your average infected person We’ll then go on to in fact, another 12 to 18 people. I have not seen an estimate out of China, suggesting that the current strain is better than measles most indicated, it’s worse. There’s an open question of fatality rates. And that, of course, is where the Chinese are doing their normal makeup data as they go along. They’re projecting that the death rate is 100 per 100,000 infections, which would be about the same death rate you get from stubbing your toe. And that is just obviously laughable, it’d be less severe than what the flu is, more likely, we’re looking at something at least 15 to 20 times that, at least that’s what data from the rest of the world would suggest. So from a health point of view, what’s about to happen is just horrific. We’re talking probably millions of deaths in a relatively short period of time as three years of exposure, American style has been compressed into just a few weeks, and it was kicked off with several 100 super spreader events during the protests. So the next question, of course, comes back to politics, Chairman Xi has set up a system, we’re in the face of massive unrest, he’s allowed a lessening of restrictions, and he’s now passing the buck to local and provincial government governments allowing them to loosen and tighten policy. But in a cult of personality system, this can very quickly lead to a crisis of confidence in the ability of the government to function at all. Because it’s not any longer clear who is pulling the shots, you could have a nightmare scenario where a policy failure in a single province leaves two out of control death rates and quit in which case nobody trusts the government at any level. Or from Julie’s point of view, you could have the opposite happen, where a local province generates a spectacular local health policy and manages to keep COVID under control as well as keeping the economy open. That would be a direct challenge to GE personally. More likely, we’re going to see some broad scale incompetence here, because GE has spent the last 10 years purging the system of anyone who’s capable of conscious thought. History tells us that when China spins apart, it goes down one of two ways. Number one, the center over concentrates power. And the inefficiencies, inefficiencies, eventually bring the system down. At the moment, GE is not going in that direction. The other option is that the provinces take power, because for whatever reason, the center can’t wield it. And they go their own way. And so we’ve got this weird moment, which is actually almost unique in Chinese history, where we clearly have a centralized Imperial desk pot, and the person of Jing ping, but he’s refusing for whatever reason, to use that power to control the current situation. So we can actually get the worst of both worlds here, as he lets governments have enough rope to hang themselves and then goes back in as the Savior locks everything back down. I mean, that’s just one possibility here. But no matter how this goes at this point, we’re talking about China being offline from a manufacturing point of view for at least the next three or four months, because it will take them that long for this current version of COVID to boil through the population. And we’re already seeing mass closures of a lot of health and health adjacent systems that already can’t cope. And we are still in the very, very, very early days. All right, that’s it for me. Until next time,
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