The hypothesis of population containment in Beijing is becoming clearer as the number of confirmed cases of Covid-19 passed 100 cases on Wednesday. But such a solution after more than a month of quarantine for Shanghai residents comes with potentially very high economic and political costs.
The threshold of 100 cases has just been exceeded. Beijing now has 113 cases of Covid-19 contamination, Chinese health authorities announced on Wednesday, April 27. Pressure mounts on the local government while in Shanghai, 1,300 kilometers away, the population is under strict confinement for a month to curb the spread of the highly contagious Omicron variant.
Don’t repeat Shanghai’s mistakes
Especially since the latest contamination figure in the Chinese capital does not yet take into account the cases that will be identified during the big wave of screening that will be launched on Sunday April 24. In fact, authorities have ordered Beijing’s 21 million residents to undergo three tests in five days.
No way for the local government to repeat Shanghai’s mistakes. There, the screenings only began after more than 1,000 contaminations. Too late to contain the epidemic without resorting to the heavy artillery of the “zero Covid” policy: strict containment. The drastic measures still in place have prompted a rare public expression of anger in a country whose regime has little tolerance for political dissent.
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For the time being, Beijing authorities reiterate that there is no talk of Shanghai-like detention, but recognize that “the epidemic situation is complex and serious,” said Tian Wei, a spokesman for the local government, on Tuesday.
Certain restrictions are already being introduced in the city. This is particularly the case in Chaoyang District, where most of the contamination has been detected in the capital. This is one of the busiest and most important districts of the capital: it houses most of the embassies and houses the shops of western luxury brands and the chicest restaurants and bars.
But he became unusually calm. Several blocks of buildings have already been closed and streets are almost deserted, the South China Morning Post noted. The messages rebroadcast by loudspeakers in supermarkets to ensure stalls are stocked and there aren’t shortages like in Shanghai underscore the neighborhood’s unique vibe, according to the New York Times.
A little further south, in Tongzhou District, schools no longer welcome children. Several outbreaks of infection have been detected in schools in Beijing, and the city government in particular does not want restrictions in this politically very important district, as it houses the local government.
Economic Impact in China and Beyond
Not only the Beijing authorities hope to have reacted quickly enough. The central government also wants nothing to do with a total containment of the Chinese capital. In fact, I’m not sure the country – or even the world – can afford it.
Firstly from an economic point of view. The measures imposed in Shanghai have shown that the “zero Covid” policy has a significant cost. While the magnitude of the economic shock is yet to be determined, “we know that in Shanghai, the local economy – such as local shops and restaurants – has suffered greatly, as well as port activities that will impact value chain and spare parts exports.” , stresses Mary-Françoise Renard, specialist in Chinese economics at the University of Clermont Auvergne.”We must not forget that Shanghai is the main supplier of spare parts for the global automotive industry,” said Xin Sun, specialist in Chinese economic policy at King’s College London.
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Data released in early April on economic activity in Shanghai since January 1 suggests just how much economic damage this long lockdown has caused. “These figures show that after sustained growth for the first two months, there was a sudden halt in March, even though the strictest measures – like full containment – were only introduced in April. Therefore, I expect negative growth in April.” , Xin Sun said.
Closing Beijing “would of course increase the impact of these measures, even if the capital does not have the economic weight of Shanghai,” says Mary-Françoise Renard. For the specialist, that would be particularly bad news for the service sector, which accounts for “83% of Beijing’s economic activity.”
A capital restraint would certainly mean the end of the 5% growth in 2022 that the government had set as a target. “The restrictions in Shanghai have already prompted the IMF to lower this estimate, and a similar situation in Beijing would confirm that China needs to largely revise its ambitions,” estimates Frédéric Rollin, investment strategy advisor who follows the Chinese economy at Pictet Asset Management .
This cessation of activities in two of the country’s most important economic and political centers “will most likely have a butterfly effect outside China’s borders as well,” forecasts Mary-Françoise Renard. Especially in the current context of rising prices. “Since the beginning of the pandemic, there have been a multitude of inflationary shocks – disruption to international trade, increase in energy prices, war in Ukraine – to which must be added the disruption to exports due to lockdown measures,” analyzes Frédéric Rollin.
Politically impossible?
But the conundrum for China is not just economic. “With Beijing, we also have to consider the political implications of the lockdown,” notes Zeno Leoni, China specialist at King’s College London. The institutional capital is the city par excellence “in which the Chinese Communist Party does not want to give the impression that it is losing control,” emphasizes this expert.
And with the Omicron variant, no scenario is satisfactory. If no restrictions are put in place, there is a risk that power will be lost in the face of uncontrolled spread of the virus, while a severe restriction could prompt people in Beijing to join Shanghai residents in their protest against the ‘zero Covid’ join politics.
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“If the suffering of the people in these two metropolises is spread in broad daylight, there would be cause to question the official discourse that China has managed the pandemic better than Western countries. This would be unacceptable to power.” ‘ says Xin Sun.
Especially since 2022 is politically very important for Xi Jinping. “The 20th Congress of the Chinese Communist Party – at which Xi Jinping is to be reappointed – is scheduled to take place in Beijing this fall, and the regime has no wish for it to happen in a city still traumatized by severe lockdowns,” believes Zeno Leoni.
For the capital there are two scenarios for him: “Either the authorities are convinced that they can overcome the epidemic in Beijing thanks to a short-term total containment and they will do it, or the situation in Shanghai fuels fears. The same applies to the capital, in this case, the government will try to avoid quarantine for all residents at the same time,” estimates the sinologist.
There is one final option: acknowledge that the “zero Covid” policy is less effective against the Omicron variant and pursue a more flexible strategy. But that’s impossible, Xin Sun believes. “Xin Jinping appropriated this policy, and to abandon it would mean he was wrong, which is unimaginable,” he said. In short, sparing the president’s pride risks costing the Chinese dearly.