It looks increasingly possible that Beijing may be headed for some sort of lockdown. The municipal government went from announcing testing everyone in Chaoyang District to testing almost every Beijing resident just twenty-four hours later. Beijingers tend to be pragmatic and politically sensitive, and having seen what has happened in Shanghai they are scrambling to stock up on food and essential goods
If there is a lockdown, something fast and harsh, as Shenzhen did, may be the best hope for Beijing. The city should have all sorts of contingency planning that was done for the Olympics that can be applied now. Any longer lockdown, especially if handled as poorly as Shanghai’s, could be an economic and political disaster.
Vice Premier Sun Chunlan said that “the epidemic situation in Shanghai is on the whole stable and improving, but the foundation is still not solid, so we should not let up our efforts”. Those efforts include a “hard lockdown” for some, complete with fencing to keep those people from leaving their buildings. There are still too many cases outside of “closed-loop management” in the city, the death toll is rising, and so it is unlikely there will be a significant relaxation until sometime in May.
Over the weekend there was a massive release of anger online as people posted “Voices of April (四月之声)”:
The censors ultimately won, but it did feel similar to the night Li Wenliang died in Wuhan in 2020. The anger over Li’s death did not translate into any kind of resistance in the real world. nor should we expect this latest outpouring too.
That said, I still think that the leadership in Beijing understands there needs to be accountability for this Shanghai disaster. Of course it can not and would not be Xi who is responsible. I still believe Li Qiang will be removed as Party Secretary. His removal might not be enough to quell the popular anger 足以平民愤 but it would be an important step. There are some interesting rumors floating around about who might replace Li, so far they are not confirmed.
It is hard to be positive about the economy or the markets in the face of increasing lockdowns of indeterminate length and intensity. Liu He’s comments in March pumped the markets for a few weeks, but the Chinese stock markets have given up all their gains since then, raising the question of whether or not “fade Liu He” is the new smart money trade. And as I and plenty of other people have asked before, even if policymakers were to announce bigger stimulus measures and rate cuts, how would the effects transmit through an economic system increasingly head hostage to the current anti-epidemic policies? And how can investors, foreign or domestic, have confidence given the rising uncertainty of lockdowns?
The May 1 Holiday next week, in earlier times a huge fillip for consumption, will likely be a bust this year.
Xi made an inspection tour today to Renmin University in Beijing, days ahead of the annual May 4th “China Youth Day”. Key themes from his visit included ideological-political education, better use and promotion of China’s ancient texts, building world-class universities and “developing the philosophy and social sciences with Chinese characteristics …to establish an independent knowledge system”.
It was a bit jarring to see crowds of cheering, maskless students greeting Xi on the same day Beijing announced that it will test most of the city three times over the next several days. I assume everyone in attendance was rigorously tested, but all that rapturous cheering can be dangerous with Omicron circulating:
There should be a Politburo meeting later this week. Perhaps that will clarify things.
Today’s Essential Eight:
Xi visits Renmin University
Economy and market concerns
Another plan to pump consumption
Wang Yi expounds in People’s Daily on the Global Security Initiative
Thanks for reading.