Category Archives: Politics & Society

Vaccination Will Not Eradicate China’s Zero Covid Policy

Map showing biweekly confirmed COVID-19 deaths per million people, Jul 23,
2022; Source: Our World in Data

PRESIDENT XI JINPING is far from the first world leader to have a well-publicised exemplary vaccination against Covid-19.

Yet, the remarks by Zeng Yixin, deputy head of the National Health Commission, that the top leadership have all been vaccinated with domestically produced Covid vaccines is notable on several counts.

First, information connected to senior officials’ health is customarily tightly held.

Secondly, Xi’s doubling down on ‘zero-Covid’ is China’s signature response to the pandemic in contrast to most of the world’s acceptance of endemic Covid, trusting a vaccinated population will keep severe infection and mortalities at low rates. Attempting to eradicate Covid through the zero-Covid policy carries high costs, socially from the mass testing, strict quarantine rules and local lockdowns, and economically from the disruption to commerce and manufacturing lockdowns cause.

China’s Covid mortality rate is minuscule compared to other countries, but, until recently, so were its vaccination rates, especially among the vulnerable elderly. These are now officially up to 90% (share of the population that has been double jabbed). However, Sinovac, China’s inactivated-virus vaccine, does not reach the same level of effectiveness as the mRNA vaccines used in the West until three doses, which may explain the timing of Zeng’s announcement about Xi. China’s mRNA vaccine, ArCoV, is in trials.

However, it will reinforce speculation in the West that Beijing is preparing to drop its zero-Covid policy. That seems unlikely if only because Xi’s endorsement has made the policy a political imperative rather than an issue of public health.

The Party has also been using low Covid mortality and case rates as evidence that China’s political system is superior to liberal democracy, a key pillar of its argument for its legitimacy. It would take near-universal vaccination with an mRNA vaccine to reduce mortality and severe infection to sustain that narrative in place of zero Covid.

That is many, many months off. Cai Qi, the Beijing Party Secretary, recently said his city would uphold zero Covid for the next five years.

Arguing that vaccination levels and treatment capabilities have reached a level at which it was no longer necessary to eliminate the virus through zero Covid would also be challenging. The Party’s propagandists would need to find a uniquely Chinese spin on a policy widely adopted by other countries.

Minimising the economic damage of zero Covid is gaining policy attention, especially as headwinds increasingly batter the economy. Dynamic zero-Covid means eradicating new local outbreaks by removing infected cases to isolation centres. Lockdowns are becoming more targeted and quarantine periods shorter. The capital, for example, has managed to avoid the lengthy citywide lockdown that afflicted Shanghai from late March to early June.

However, zero-Covid will remain in place for at least the rest of this year, well into next, and, potentially, well beyond.

1 Comment

Filed under Politics & Society

Mini-Lockdowns Become China’s New Normal

Chart showing 7-day trailing average of confirmed new Covid-19 cases in China, June 1-July 10. Source: Our World in Data.

THE LATEST VARIANTS of Covid-19 are posing new challenges to China’s zero-Covid policy and raising concerns that another round of lockdowns is imminent.

According to authorities, Macau has closed its 30 casinos and other non-essential businesses for at least a week after recording more than 1,500 Covid cases since the middle of June. Some 19,000 people are in mandatory quarantine.

Several casinos have been converted into temporary medical facilities, as Macau has only one public hospital.

While not formally locked down citywide, Macau, in practice, is closed.

Meanwhile, Shanghai authorities announced on Sunday that the city had identified its first case of the Omicron BA.5.2.1 mutation and that residents in several Shanghai districts are undergoing three days of double rounds of Covid testing. Mass testing in multiple districts also took place last week.

Mass testing has become the first line of defence to keep infection levels in check, with a negative test required to travel on public transport or enter certain places and those testing positive being put into mandatory quarantine.

China’s first case of the highly contagious BA.5 variant was discovered in the city in mid-May. Authorities said it was brought into the country by a passenger on a flight from Uganda. It has since been detected as far away as Xian and Dalian in Liaoning province.

Shanghai only emerged from a punishing near two-month lockdown in early June. Central government officials have said that new curbs should be targeted to reduce economic damage, but there is no indication that the huge cost of closing Shanghai has changed Beijing’s commitment to its zero-Covid. strategy.

Elsewhere, mass testing is also being conducted in several districts in Guangzhou and Xining in Qinghai province. Nanchang in Jiangxi province closed places of entertainment on Saturday.

Temporary curbs, including shutting entertainment and cultural venues, have also been imposed in Danzhou and Haikou in Hainan province and Lanzhou in Gansu. In all, some 6 million people are affected.

The town of Qinyang in Henan almost wholly locked down its nearly 700,000 residents from Sunday. One person from each household is allowed out every two days to get groceries.

1 Comment

Filed under Politics & Society

China Faces Risk Of New Round Of Covid Lockdowns

Chart showing 7-day moving average of confirmed new Covid-19 cases in China, Jun 3-July 6, 2002. Source: Our World in Data

NEW COVID-19 case numbers are rising in various cities across China. The seven-day trailing average has increased to more than 300 from a low of 25 in late June.

Authorities are imposing restrictions on business operations (Xian) and public spaces (Beijing) and putting tens of millions of people under social distancing restrictions.

Earlier this week, the Japanese bank Nomura estimated that 114 million people were under full or partial lockdowns, including in Shanghai, which has only recently emerged from a punishing complete lockdown.

With President Xi Jinping repeatedly reaffirming China’s commitment to its zero-Covid policy, can more stringent lockdowns be far behind?

1 Comment

Filed under Politics & Society

Shanghai Police Data Hack Reveals As Much As It Hides

THE REPORTED BREACH of the Shanghai police database is — at the very least — an embarrassment to China’s cybersecurity services but could have more serious ramifications.

According to Bloomberg, unidentified cybercriminals stole 23 terabytes of data, including personal and criminal case information of more than 1 billion citizens. An anonymous poster on the Dark Web using the handle ‘ChinaDan’ claimed to have stolen the data trove from the Shanghai National Police database and offered it for sale for 10 bitcoin ($197,00 at current depressed crypto prices).

Authorities have thus far disclosed no information on how the most extensive known hack of Chinese data happened or who might have executed it. We may never know, even if the official investigation reveals a vulnerability at the Shanghai police’s cloud services provider, almost certainly a Chinese big-tech firm. Alibaba, Tencent and Huawei are China’s leading cloud services providers.

Early speculation by outside cybersecurity experts is that there was a bug or misdeployment of the distributed search and analytics engine widely used by cloud services. Tighter regulation or rectification of cloud-service providers would hint at where authorities believe the cause of the hack to have been. So, too would be demotions, or worse, of police personnel or other members of the security apparatus.

One reason that the hack is so embarrassing for the Chinese government. Another is that it is now implementing a strict data privacy and protection regime under the umbrella Data Security Law and Personal Information Protection Law enacted last year and the earlier Cybersecurity Law. The trio imposes stringent data privacy obligations on all businesses regarding personal and non-personal data while giving state agencies extensive leeway over collecting and processing such data.

Internationally, the leaking of data files on Xinjiang haves had reputational and sanctions consequences for China. The scale of this breach will again expose Beijing to scrutiny over the extent of state surveillance.

Should reports escape the censors (the hashtag #dataleak has been blocked on Weibo), some Chinese may ask themselves not just why authorities hold so much personal data but why police in a city of 28 million have data on more than 1 billion people. However, police are a national force under the Ministry of Public Security, and the hacker(s) may have accessed the ministry’s records via the Shanghai police database. Yet that, in turn, reminds how interconnected China’s internal security systems are.

Leave a comment

Filed under Politics & Society, Technology

The Unhealthy Use Of China’s Health Codes App

THE PUNISHMENT OF five local officials in Henan province for using a COVID-19 quarantine enforcement app to prevent protesters from travelling shows the capacity for digital repression and Beijing’s desire that local officials’ use of it does not get out of hand.

The punishments of two officials for ordering the tampering with the codes and three for carrying it out followed an investigation by the local discipline and supervision commission in Henan’s provincial capital, Zhengzhou.

Earlier this month, hundreds of people who had lost savings in a Ponzi scam in Henan found their health codes on the smartphone apps used to enforce COVID-19 quarantines suddenly turned red, despite testing negative for COVID-19.

A red code prevents access to public transport, hotels and other facilities. This prevented the citizens from travelling back to Henan to access their frozen bank accounts and petition authorities for redress.

The scam had already been widely shared on social media, and the apps turning red outraged social media users already weary from lockdowns. Posts about family members of depositors being placed in mandatory quarantine after their relative’s health code turned red further fuelled the anger at health codes being turned into what was called certificates of good citizenship.

The public relations damage at a time when Beijing was doubling down on its zero Covid policy soon had state media condemning the alleged abuses by local officials. China Daily described tampering with health codes as ‘ one of the worst forms of abuse of power’.

China’s new digital privacy regime limits the independent misuse of digital technology by China’s vast bureaucracy. However, while central leadership will not impose any limits on its ability to use technology for political ends, it is demonstrating that it will discipline lower-level officials if they do so for their own ends, even if that is a misguided attempt to maintain local public order.

However, the more significant concern remains that the health code system provides higher-level authorities with a repressive tool to track and quarantine arbitrarily any opponent or critic.

1 Comment

Filed under Politics & Society, Technology

China’s Trade Picks Up As Lockdowns Ease

Daily throughput at Shanghai’s container port returned to 95.3% of normal levels in late May, even as China’s commercial capital remained under its two-month lockdown. That goes part of the way to explaining May’s rise in exports, up 16.9% year-on-year that the General Administration of Customs announced today, a marked improvement on April’s 3.9% growth.

Imports rose by 4.1% year-on-year in May, after being flat in March and April, but still a weak pace reflecting the broader second-quarter slowdown in China’s economy as lockdowns suppressed economic activity.

News that the Biden administration is looking to ‘reconfigure‘ tariffs on Chinese imports into the United States to help reduce inflation will boost Chinese exporters but insufficiently to offset the headwinds of slowing global GDP and trade entirely.

Import growth will also remain modest, even as lockdowns ease and authorities provide further fiscal and monetary stimulus to support the domestic economy.

However, lockdown easing is not the same as lifting. New measures were announced for one Shanghai district today and it looks, nationally, as if the country’s anti-virus infrastructure is continuing to be built out so that mass testing and quarantines can be sustained through 2023.

During his inspection tour of Sichuan, President Xi Jinping called for unwavering adherence to its zero Covid policy while at the same time striking a balance with the needs of the economy. His grouping of economic recovery, pandemic outbreak suppression and maintenance of social stability as co-objectives for officials particularly caught this Bystander’s ear.

Leave a comment

Filed under Economy, Politics & Society, Trade

Shanghai Reopening Would Be China’s Most Powerful Stimulus Measure

Shanghai waterfront skyline seen in an archive 2015 photograph

THE EASING OF the lockdown in Shanghai on June 1 may prove the most crucial stimulus measure that authorities take to revive China’s economy and get it anywhere near the official target of 5.5% GDP growth this year.

The more-than-two-month-long lockdown has not been lifted entirely, though there is no staggering of the easing. Most people can move more freely around the city, provided they can show a green health code on their smartphone. Public transport within the city has restarted. Crucially, many businesses are reopening their doors, with in-person customers having to show a negative Covid test within the previous month 72 hours.

However, 10% of the population of 25 million residents in high-risk areas will remain confined at home. Confirmed Covid cases and close contacts still face quarantine or hospitalisation. A localised outbreak risks the reimposition of a neighbourhood lockdown. Residents returning from trips outside the city still need to quarantine. Schooling remains remote, and places of mass entertainment remain shut.

Nonetheless, word reaches this Bystander that the mood in the city is far more one of celebration and relief than the noble forbearing that official media portrays. That, in itself, is likely sending a message to city officials, who have not emerged from the lockdown covered in glory.

Residents have been angry at the strictness of the measures, city officials’ ineptness in enforcing them, leading to, for example, food shortages, and the fact that much of the financial aid has gone to businesses and factories, not to households.

The economic cost has been tremendous. An academic paper published earlier this year gives a sense of the likely scale of the cost — full percentage points of GDP. Shanghai is the country’s biggest and most affluent city and its financial, commercial and international business hub. It accounts for 3.8% of China’s GDP and 10.4% of China’s trade with the rest of the world (2021 data).

It will likely take months for the city’s economy to be operating at anything like normal again, not least because supply chains need to stabilise first.

The manner of the easing of the lockdown allows both President Xi Jinping and Premier Li Keqiang to maintain their positions on the need for the zero-Covid policy and the need to reopen an economy facing multiple headwinds, respectively.

Earlier this week, government departments started to flesh out the details of the 33-point stimulus package that Li announced on May 23. The measures are broad-ranging, including tax cuts, business subsidies and loans, and infrastructure investment. As important as staving off a potential recession, the stimulus aims to stabilise employment, the government’s short-term priority.

The measures also included initiatives such as streamlined customs and immigration intended to bolster the confidence of foreign firms manufacturing in China who might be thinking this is a time to look elsewhere.

The critical but beleaguered property sector has had separate support measures, including interest rate cuts.

The economic impact of getting Shanghai back to normal business would mean more to the national economy than all of the above.

Shanghai’s lockdown has been the most disruptive but only one of several in major cities that have provided a stark reminder of China’s willingness to throw the economy into turmoil when political priorities demand it.

As Li has repeatedly warned, the official target of 5.5% GDP growth is undoubtedly out of reach. Much has been speculated about a rift between Xi and Li ahead of the autumn’s Party Congress, the truth of which is probably impossible to know. Sometimes, economic tumult is just economic tumult.

2 Comments

Filed under Economy, Politics & Society, Trade

No Going Back For China On Zero-Covid

Chart showing daily new confirmed COVID-19 cases in China, 7-day rolling average. Source: Our World in Data

EVEN THOUGH NEW Covid-19 infections have peaked, Shanghai city authorities are imposing stricter control measures, an indication of the intensifying political dimension to the zero-Covid policy on which President Xi Jinping yet again pinned his personal colours at the Politburo Standing Committee on May 6.

Shanghai is already under what is now more than a month’s-long lockdown that has seen deaths, caused economic disruption and kindled social unrest amid localised food shortages and disgruntlement about city authorities’ management of the situation.

More mass testing and stricter enforcement of mandatory quarantine for those testing positive or who have co-residents, not just family or close neighbours who test positive are on the way. Residents have reportedly received notices of the imposition of ‘quiet periods’ of three to seven days in which they will not be allowed outside and non-essential deliveries will be halted.

Beijing, too, is extending quarantine measures and making its lockdowns less ‘lite’ in a bid to avoid the capital becoming a second front in ‘the battle for Shanghai’.

As this Bystander has noted before, the top leadership is in a bind. Under- and ineffective vaccination has left it with little option but to persist with trying to achieve zero-Covid. Treating the pandemic as endemic now would likely trigger a wave of deaths that would undermine the narrative of China, unlike the heartless West, putting the lives of its citizens above economic considerations.

Yet the longer it persists with zero-Covid, the less choice it has but to continue it. Politically, Xi cannot make a U-turn, especially with a critical Party Congress coming up in the autumn. The messaging by state media and censorship of social media will negate public criticism of Xi, while local officials will be under pressure to fall into line.

The same may hold less true in elite circles, even if criticism remains muted. Few if any will take the gamble of speaking out loudly against Xi now, cognizant that his power may be far greater after the Party Congress.

1 Comment

Filed under Politics & Society

Omicron Continues To Challenge China’s Zero-Covid

Chart showing 7-day rolling average of daily new confirmed Covid-19 cases.

WORKD REACHES US of panic food buying in Guangdong. Residents are stripping supermarket shelves bare, fearing the possibility of a Shanghai-style citywide lockdown following the discovery of new Covid-19 cases in Guangdong’s provincial capital. Authorities are due to start mass testing. Given Beijing’s doubling down on its zero-Covid policy, restrictions on movement will surely follow.

Meanwhile, Shanghai authorities are suggesting some slight easing of the severe lockdown residents there have been under for more than a week. They will categorise districts into three types according to the level of risk from Covid. Once a section achieves the least risky status, some of the strict restrictions on movement may be eased locally.

That will still take some time to pass. All infectious cases will have to be moved to within centralised Winter Olympic-like ‘closed-loop’ central facilities first so the outbreak is contained there and cannot spread. Jilin in the northeast is only just coming out of its lockdown after 33-days.

China’s largest city and financial and commercial hub is still struggling to provide the locked-down with basic food supplies and medical care. However, reports say the situation has stopped getting worse and is improving in some districts as the logjams in distribution start to ease.

Shanghai has experienced China’s worst coronavirus outbreak since the early days of the pandemic. The under vaccination of the elderly and relative ineffectiveness of China’s vaccines — Sinovac cuts the death rate tenfold for over-80s but is roughly half as effective as the Pfizer-BioNTech vaccine — have painted Beijing into a corner.

It has little option but to stick with its zero-Covid policy despite its inability to deal with the rapid spread of the high-contagious but less fatal Omicron variant. Nonetheless, zero-Covid now no longer means zero local cases but zero local cases outside quarantine facilities.

Attempting to live with the virus as other countries are now doing would likely result in a politically unacceptable wave of deaths and hospitalisations until widespread vaccination with more effective vaccines could be achieved on a mass scale. That would require a national roll-out of an indigenous mRNA vaccine that would take months to administer the initial two shots.

It would also undercut the official narrative of how China’s success in keeping the death rate low by international standards stands in contrast with Western governments’ willingness to accept high death rates among their citizens in order to reopen economies.

Leave a comment

Filed under Politics & Society

Shanghai Covid Surge Will Have Political Fallout

SHANGHAI’S COVID-19 OUTBREAK is becoming a political and medical emergency.

The country’s financial and commercial hub is struggling to contain the mainland’s worst outbreak of infection since the initial one in Wuhan in early 2020.

Officials reported 8,000 new cases on Saturday, a new daily record, and more than 13,000 on Monday as mass testing got into fuller swing.

The city tried to avoid a total lockdown because of Shanghai’s economic importance, opting for a two-phase policy that started on March 28. That has failed to contain the outbreak and become chaotic.

The city’s hospitals, short of beds and medical services, have struggled to cope. The mass testing programme has experienced delays in getting results. Feeding 25 million people in lockdown is proving to be a logistical challenge.

Nationally, China has reported no new deaths from Covid-19, although unofficial reports of deaths in Shanghai have been circulating for some days.

As in Hong Kong, low and ineffective vaccination rates among the elderly appear to have exacerbated the situation. The Donghai Elderly Care Hospital in eastern Pudong has reportedly suffered a severe outbreak of infections.

A senior Party official, Ma Chunlei, has said Shanghai was not sufficiently well prepared for the outbreak, a rare public admission of shortcomings in a city regarded for its administrative competence.

This has prompted a mobilisation of external assistance not seen since the pandemic’s early days. Vice Premier and Politburo member Sun Chunlan, who oversaw the strict anti-Covid regime at the recent Beijing Winter Olympics, was sent to the city at the weekend to provide political and administrative direction.

She stressed ‘unswerving adherence’ to the zero-COVID approach and told the city’s officials to improve their quarantine management. She also told police to guarantee social order in lockeddown areas and treatment facilities, a hint perhaps that residents’ exasperation is boiling over beyond social media.

The People’s Liberation Army has now mobilised 2,000 personnel and other provinces sent 36,000 people to help the city.

The first lockdown, covering everyone east of the Huangpu River, which includes the financial centre in Pudong, has been extended. With phase two, covering the city’s western side, still in effect, the whole city is now locked down.

It is unclear how long that will last, but it will likely stay in place until the medical situation stabilises, perhaps another week or more.

Shanghai’s mild experiment in easing back from the zero-Covid policy has backfired. That will have economic ramifications for an already slowing economy and how any further big-city outbreaks are handled.

Even more, it will have political ramifications ahead of the Party Congress in the autumn that will depend on how the top officials of the influential Shanghai party come out of the medical crisis.

There will be a new raft of Politburo leaders to accompany President Xi Jinping’s likely third term, over which the Shanghai faction would expect to have some sway. Local Party secretary, Li Qiang, had been tipped as a possible replacement for Li Keqiang as premier. He will look like a less safe pair of hands now.

2 Comments

Filed under Politics & Society