Xi chaired another Standing Committee meeting, again focused on epidemic control and restarting the economy. The readout from this meeting makes it sound like the leadership is increasingly concerned about the risks of a second wave of infections as well as the deteriorating global environment which will have a significant drag on any PRC economic recovery. The leadership has been quite disciplined in pushing economic stimuli but at some point they are going to have to get much more aggressive.

The stability maintenance issues from a prolonged economic downturn that causes mass underemployment and unemployment would be significant, and if the leadership believes that risk is fast approaching then they will probably get more aggressive in the economic policy response. I just do not know if we are there yet.

Finding someone to blame for deepening economic pain is also likely. Should we expect the CCP to try to blame the US, by arguing that the US is responsible for the global downturn b…