China had three years to prepare for a nationwide surge in Covid-19 cases. While it increased spending to build more hospitals and develop vaccines, funding gradually shifted toward paying for costly Covid-19 restrictions.
Investment in expanding medical resources, such as hospital beds, actually slowed during the pandemic, government data shows.
While authorities were busy conducting mass tests and building quarantine centers, China’s vaccine drive also stalled. Fewer than 60% of Chinese have had a booster shot, government data shows, including only 40% of those age 80 and older.
Now, with virus outbreaks setting records and protesters taking to the streets to denounce Covid-19 controls, experts say that China isn’t any better prepared for a serious healthcare emergency than it was three years ago.
“The benefits of the once quite successful zero-Covid policy were wasted and now they have trapped themselves in this tricky situation,” said Rory Green, chief China economist at research company TS Lombard, who is based in London.
Given China’s low vaccination and booster rates as well as a lack of immunity from prior infection, lifting the zero-Covid policy could put 1.3 million to 2.1 million lives at risk, a recent analysis by life-science research firm Airfinity showed. The projection used Hong Kong, where an outbreak earlier this year killed thousands, as a proxy.
In Hong Kong, a low vaccination rate among the city’s elderly drove the death rate to the highest in the world. After the crisis subsided, the city boosted vaccination efforts. Now, more than 80% of the city’s residents aged 12 and older have received three shots, according to the Hong Kong government, which in recent months has eased some Covid-19 restrictions.
Mr. Green estimates that China could experience 50,000 deaths a day at the height of an uncontrolled outbreak. In a recent report, he said that nearly 93% of Chinese live in areas where such an outbreak would overwhelm critical-care resources. He said his estimates are based on calculations of the latest official data, using community spread and severity of cases from Hong Kong’s outbreak in the spring as a baseline.
Nearly three years after the first Covid-19 cases were reported in Wuhan, officials routinely invoke the hospital system’s lack of preparedness as a reason to keep the zero-Covid strategy in place. China “has a large number of vulnerable groups, unbalanced regional development and insufficient medical resources,” President Xi Jinping told senior officials last month.
According to a 2020 study published in the journal Critical Care Medicine, the country had 3.6 critical-care beds per thousand people, compared with 7.1 in Hong Kong and 11.4 in Singapore.
With the pandemic, China did set out to improve the picture. One goal of the current government five-year plan is for each province to have at least one medical center able to handle major epidemic emergencies, with 100 or more ventilators and 10% to 15% of beds dedicated to intensive care.
However, some physicians and public-health experts familiar with the matter said the drive’s momentum slowed this year as resources went toward stamping out outbreaks.
Since 2021, China’s Ministry of Finance has pledged to invest $8 billion in major healthcare infrastructure projects, mostly on long-term improvements but with a small share set aside for short-term needs, such as makeshift quarantine facilities with only low-level medical care. The share of the budget going to build quarantine centers rose sharply this year, to 9% of the total from less than 1% in 2021, government documents show.
China also failed to seize its opportunity to vaccinate everyone while outbreaks were under control—a window open from 2020 to the second quarter of 2022—said Mr. Green, the London-based economist. In recent months, vaccine efforts have slowed even as public-health experts warn that higher immunization levels remain key to successfully easing Covid-19 controls.
According to people involved in vaccination campaigns in major cities, that is partly because many people’s cost-benefit analysis leads them to forgo the shot: Today’s strains of the virus are milder and proof of vaccination won’t shield them from repeated testing or protect them from quarantine if a close contact is infected.
Asked about slowing investment in medical resources, the National Health Commission referred to a Tuesday briefing where Guo Yanhong, a senior health commission official, said that hospitals designated for handling Covid-19 cases should improve their capability to treat critical patients and those with other diseases.
While it is difficult to gauge nationwide spending on Covid-19 control, local data offers a glimpse of priorities. Last year, the Luquan district of Shijiazhuang, capital of Hebei province, spent more than $4.75 million on testing its half million residents, building quarantine facilities and disinfecting residential compounds and public places, according to government documents. That was more than it spent on Covid-19 control in 2020 and 13% more than it spent on a new hospital.
Overall, gains in medical resources at China’s hospitals have been slowing from prepandemic levels. In 2021, according to official data, the number of hospital beds was up just 3.8% from a year earlier, as was the total number of medical workers, compared with 2019 growth of 4.8% in beds and 5.1% in workers. Growth in the number of critical-care beds slowed to 5.8% from nearly 9%.
Beijing is closely monitoring how much pressure the recent climb in cases is putting on the healthcare system, people familiar with the matter said.
This week, health officials refreshed the push for vaccinations—especially among the older population—and shortened the interval between initial shots and boosters to three months from six. The National Health Commission urged local officials to avoid unnecessary and lengthy lockdowns, while vowing to go door-to-door to lift vaccination rates among the elderly.
Authorities in some cities have already relaxed quarantine protocols required by Beijing. As hospitals in the southern city of Guangzhou ran short of beds, officials told some people who tested positive but experienced no symptoms to stay home, some residents said. Previously, anyone testing positive was sent to a hospital or central quarantine facility.
Shijiazhuang announced last month that it would stop mass testing all 11 million residents. But it restarted mass testing as infections spread and doubled down on lockdown measures. Several local hospitals have suspended operations.
A local resident said her father, who was diagnosed with lung cancer early in October, hasn’t been able to receive his latest round of chemotherapy. Hospitals have turned him away either because all beds were occupied or the hospital was under lockdown.
“His situation is worsening by the day,” the woman said.
The Chinese government is trying to balance two potential sources of unrest: Overloaded hospitals—already crowded on a normal day—and strict lockdowns, said Ayo Wahlberg, an anthropologist at University of Copenhagen who has coedited a book about the pandemic.
He said it would take vaccinations on a massive scale to have a protective effect against hospital overloading. In addition, he said, because the most effective vaccines are produced outside China, Beijing needs to decide to what extent it wants to rely on the U.S. and Europe for its vaccine strategy.
China largely relies on homegrown vaccines and hasn’t approved foreign-developed mRNA vaccines, which are generally viewed by health experts as more efficient, for broad use.
Even if China ramps up its vaccine drive, it is going to take at least several months to raise the vaccination rate for those 80 and older above 90%, said TS Lombard’s Mr. Green.
“Until then, they will attempt to keep this…mixture of targeted lockdowns, vaccinations and gradual easing, in place over the winter, but it’s going to be very difficult,” he said.
Write to Liyan Qi at Liyan.qi@wsj.com and Raffaele Huang at raffaele.huang@wsj.com