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I don't think it's all that complicated. If they lift all restrictions right now, they're looking at a death toll potentially in the millions because their vaccine doesn't work (embarrassing in and of itself), and they're worried that the population will blame the party for this whole predicament (which they should).
The CCP is kicking the can down the road, or digging a hole for themselves. Whichever analogy you prefer.
Okay, millions will die, but so what? These will be overwhelmingly old people dying. Nobody really cares a lot about old people dying: indeed, millions die every year for reasons other than Covid, and nobody gives a shit.
It would have been hugely different if, for example, children were at risk; I certainly know I’d approach Covid much differently if that was the case. Huge death toll of old people, though, simply does not have similarly big emotional appeal and practical impact on society.
Old people are the core support of the CCP and their proxies in Hong Kong, Macao etc. People who don't want disruption and just want a quiet, comfortable life where they get the basics and avoid the cruel eyes of the people in power. There's even a term for this kind of existence in Chinese:
https://en.wiktionary.org/wiki/%E9%81%8E%E6%97%A5%E5%AD%90
Such a concept would understandably evolve in a highly inegalitarian agricultural society, as Mainland China has been until very recently. Do the work that the landowner requires of you and no more; avoid being assigned extra work by the supervisor; don't get in trouble. That way, you have a good chance at gaming the calories in / calories out ratio to put on some fat before the next bad harvest or civil war. If you work hard, you will be leaner and at more risk of death when the hard times come, but you will receive little rewards outside of heaven...
The CCP and its proxies have learnt the secret to governing China, which is to keep people doing 過日子 content. The youth will always have their periods of rebellion, the intellectuals can never be trusted, and the ambitious must be monitored within broad limits, but most Chinese people are happy to do the minimum amount of work, play on their phones whenever they can, and obey the copious orders that Chinese society provides for them in lieu of giving them initiative.
If China became a competitive democracy tomorrow (or maybe until yesterday...) I would expect the CCP to win the first elections, because they have the elders on their side. However, mass deaths among the old would severely hurt the CCP in three directions: lost supporters to covid, lost supporters due to elders' resentment at the failure to keep them safe, and lost supporters due to the outrage of the younger generations at the (salient) death of their parents and grandparents.
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You ask that question after bearing witness to tons of people suddenly concerned about "killing grandma" (i.e. marginally contributing to grandma's statistically likely demise)?
Old people dying is nothing new. Old people dying in a way that someone can be stuck with the blame for it, on the other hand...
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A death toll in the millions from Omicron? I find that hard to believe.
Looking here (select interval --> cumulative and check box "relative to population"), middle of the road looks like 2000-2500 deaths per million, and that's for counties that had the benefit of vaccines that worked to reduce severity considerably.
China's population of 1.4B multiplied by that range yields considerably more than 2M, and that's before you account for an older population and higher rates of smoking. Or putting it backwards, in order to stay under 1M, the would need a death rate under 600pm, which would be 1/4 that of wealth countries.
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One the one hand, china’s really old and they smoke a lot. On the other hand, Covid isn’t that dangerous. On the gripping hand, they have to realize that they can’t keep the restrictions up forever and they’re as ready to rip the bandaid off as they’ll ever be.
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