The rapid global spread of COVID-19 has demonstrated that no matter how successful America is at fighting this pandemic here at home, we will never stop this threat unless we’re also fighting it around the world. In this series of issue briefs, the USGLC takes an in-depth look at the global response and COVID-19’s impacts on vulnerable populations, global development and diplomacy, and the future of U.S. global leadership. Read more from our series here.

In response to the global outbreak of COVID-19, China moved quickly to produce and export PPE, ventilators, and medical supplies around the world. Throughout 2021, they partnered with developing economies to improve vaccine manufacturing capacity and utilized vaccine diplomacy to extend their influence.

However, the United States has far outpaced China in global health leadership. While China has played a significant role in global pandemic response, the U.S. has donated the most vaccines for worldwide distribution. The U.S. alone accounts for 40 percent of total vaccine doses committed for donation.

• The United States is by far the largest international donor of COVID-19 vaccines, donating over 500 million vaccine doses to 110 countries, working toward the Biden Administration’s commitment to donate 1.2 billion.
• S. donations far exceed China’s vaccine outreach, with estimates tracking China’s current donation total at nearly 200 million doses.

China’s “Vaccine Diplomacy”

Not only has China fallen behind the U.S. in the quantity of vaccines delivered, but they’ve also been scrutinized for the quality of their vaccines. Two doses of Chinese vaccines, which are produced by Sinopharm and Sinovac, may provide relatively lower protection against Omicron than those produced using mRNA technology.

• Data compiled by UNICEF indicates that shipments of Sinopharm and Sinovac declined in the final months of 2021, from a peak in the summer and early fall, reflecting lower international demand for Chinese vaccines.
• Several governments are reshaping their vaccine campaigns after initially rolling out Chinese vaccines. Bahrain, Cambodia, Chile, Indonesia, Thailand, and the UAE—are recommending or offering a non-Chinese booster shot to those who received Sinovac or Sinopharm vaccines.

China’s vaccine donations have also been directly linked to foreign policy interests, rather than the recipient country’s medical needs. Aid has often come with strings attached, such as requesting recipient countries provide public displays of gratitude.

• Nicaragua received 1 million vaccine doses days after cutting diplomatic ties with Taiwan in favor of China.
• China pressured Ukraine into withdrawing its support for more scrutiny of human rights in China’s western region of Xinjiang by threatening to withhold 500,000 doses of Chinese-made COVID-19 vaccines destined for Ukraine.

Economic Impact

Some have questioned the effectiveness of China’s vaccine diplomacy, but the real impact of the pandemic on China’s global influence may be the economic impact of actions taken to prevent the spread of the virus.

China’s Economy in Response to the Pandemic

China’s strict virus containment measures coupled with the shutdown of economies in countries critical to China’s economic recovery led to major limitations on their growth.

• 2020 was the year that Chinese leadership planned to celebrate the doubling of its economy over a single decade, but as Yukon Huang at the Carnegie Endowment noted, the coronavirus “obliterated those forecasts.”
• Yet in face of these challenges, China was the only major economy to grow in 2020, even if at its slowest annual rate since 1976 (2.2%).

In 2021, as the rest of the world began loosening their COVID restrictions and restarting their economies, countries clamored for China’s goods. Exports surged to a record high, and China expanded growth by 8.1%.

Economic Risks on the Horizon for 2022

However, new risks to the Chinese economy, notably the Omicron variant, could spell trouble for China’s economy in 2022. Small surges in infections prompted stringent lockdowns in the country’s largest industrial cities, grinding supply chains to a halt. Added concerns over debt and a real estate bust point to a slowdown in China’s rapid recovery.

• The IMF cut its forecast for China’s 2022 GDP growthbased on expectations the zero-COVID policy will cause increased restrictions on business activity and that there will be protracted financial stress among property developers.
• China’s zero-COVID policy has helped mitigate virus spread, and the country continues to report a low official death toll. The country is also reported to be heavily vaccinated, with nearly 86% of their total population having received two doses. However, with little natural immunity and far less efficacious vaccines, China is opting to maintain strict lockdowns in the face of more minor outbreaks.

Weakened Chinese production poses a major setback for businesses hoping to unclog supply chain bottlenecks that have plagued the global economic recovery.

• Disruptions could hamper consumer confidence and aggravate inflation, which is already at a 40-year high, increasing challenges for the Biden Administration and the Federal Reserve.

A Roadblock to the Belt and Road Initiative

With the world shut down and nations shut off from each other, the coronavirus initially “all but halted the Belt and Road Initiative in its tracks,” according to the Council on Foreign Relations, because its projects often rely on Chinese rather than local materials and supplies.

• In June 2020, the Chinese Ministry of Foreign Affairs estimated that 50-60 percent of its projects under the Belt and Road Initiative had been either “seriously” or “somewhat affected” by the coronavirus pandemic.

The greatest impact on the Belt and Road Initiative may have been the result of restrictions on travel and the movement of goods, although others have highlighted the economic impact on countries that have signed on to the Initiative. Many countries announced they were postponing, cancelling or reviewing Chinese-funded projects, including Egypt, Bangladesh, Pakistan, and Tanzania.

• Kazakhstan and Bolivia canceled $1.5 billion and $1 billion in projects respectively, while Costa Rica, Sudan, Ethiopia, Ecuador, Zambia, and Cameroon have suspended or canceled a total $3.3 billion in projects, according to Aid Data.

Belt and Road Initiative Reframed

Amid speculation that COVID-19 might be the “the nail in the coffin for the BRI,” the pandemic created opportunities for China to reconsider and refocus the initiative on public health, green technology, and digital services.

In October 2021, the Second Belt and Road Initiative was announced, with renewable energy at the focal point of China’s future infrastructure projects across Eurasia.

• Belt and Road renewable energy investments reached a new high of 57% of its total for energy projects in 2020, according to IHS data.

The pandemic also allowed Beijing to advance their “Health Silk Road” in the Middle East and North Africa, using mask and vaccine diplomacy to generate commercial gains and market access for Chinese firms along the BRI.

• China significantly increased BRI investment in Sub-Saharan Africa and the Middle East and North Africa during 2021, with 156% and 361% increases in investment in each region, respectively.

China’s economic stability and growth through the pandemic cemented its status as a global economic cornerstone with much of the world relying on China’s products for their own economic recoveries. However, as it faces waning momentum to its own domestic economy and its Belt and Road Initiative, the rest of the world must consider whether China can be relied upon as a key engine of growth and supply.

Last updated April 2022

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