In his latest "My Take," "Varney & Co." host Stuart Varney discusses the devastating effects of China's zero COVID policy has on U.S. inflation, arguing when China shuts down factories, "they create a supply chain problem here."
STUART VARNEY: There's one country that still clings to a zero COVID policy and that is China.
They're not trying to live with it. They are trying to stamp it out. It won't work. And worse, their policy hurts us.
China has put 20 million people under strict lockdown. There are severe travel restrictions for next week's Lunar New Year holiday. China's leader, Xi Jinping wants a COVID-free Olympics. And a COVID-free country.
But China is the manufacturing capital of the world. When they shut down factories there, they create a supply chain problem here. And supply chain problems play a big role in rising inflation.
Xi can't change course. He's staked his leadership on showing how China can manage COVID, while America can't – good luck with that.
China's vaccines are nowhere near as effective as those developed in the West and nobody has been able to shut down omicron completely.
Xi should accept that COVID is becoming endemic, that we've all got to live with it. But he won't. He can't. He's locked into lockdowns. A reversal would mean a huge loss of ‘face’ and that's not good in China.
Just as we learn to live with COVID, China goes the other way in a futile attempt to kill it off. It's like trying to eradicate the common cold. So the supply chain problems continue. Inflation lingers and it's partly their fault.