At some point, China won't be able to stop it
The best-case scenario for omicron right now is that it's a more-contagious strain that makes people less sick.
For most of the world, that's a decent trade off. Vaccines should provide great protection and it may sweep across the globe without overwhelming healthcare systems. Over time, people would get natural immunity or vaccines, which could be reformulated to add even more protection. Eventually, it would render covid as another version of a cold or the flu.
The problem is China and its policy of covid-zero.
It amazes me that they've been able to contain the more-contagious delta variant (so far) but if this strain is even more contagious (some estimates +300%) then it's a losing battle. It will be like New Zealand where they will eventually shift to mitigation.
The problem is the middle part. The Chinese hate to lose face and they've staked a great deal of their reputation on the ability to control covid. If they go to war with omicron and begin to lose, it will mean shutdowns. That will slow growth and -- critically -- it will cripple supply chains again.
Yesterday China warned it could face more than 630,000 cases a day if it opens its borders like the US.
That's the kind of thing that could shift the current inflation-with-strong-growth mode into stagflation.
