The premise of confinement of residents in Beijing is becoming clearer as the number of confirmed infections with the Covid-19 virus crossed 100 on Wednesday. But such a solution after quarantining Shanghainese residents for more than a month has a very high economic and political cost.
The threshold of 100 cases has just been crossed. On Wednesday, April 27, Chinese health authorities announced that Beijing now has 113 cases of Covid-19. Pressure is mounting on the local government while 1,300 km away, in Shanghai, severe restrictions have been imposed on residents for a month in an effort to stop the spread of the highly contagious variant Omicron.
Don’t repeat Shanghai’s mistakes
Especially since the last number of pollution in the Chinese capital did not take into account the cases that will be identified during the large wave of examination that began on Sunday, April 24. In fact, the authorities required 21 million Beijing residents to undergo three examinations over the course of five days.
There is no room for the local government to repeat the mistakes of Shanghai. Screenings there only began after more than 1,000 infections. It is too late to contain the epidemic without resorting to the heavy artillery of the “zero Covid” policy: strict containment. The draconian measures still in place have led to a rare public expression of anger in a country with a regime that has little tolerance for political dissent.
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Tian Wei, a local government spokesman, noted on Tuesday that the Beijing authorities are currently repeating that there is no confinement issue as in Shanghai, while realizing that “the epidemiological situation is complex and dangerous.”
In the city, certain restrictions have already begun to be put in place. This is particularly the case in Chaoyang District, where the majority of pollution has been identified in the capital. This is one of the capital’s busiest and most important areas: it hosts most embassies and is home to boutiques of luxury Western brands and the finest restaurants and bars.
But he became abnormally calm. The South China Morning Post noted that several blocks of buildings and streets have already been almost deserted. Messages resounded by loudspeakers inside supermarkets to ensure that the stalls are well stocked and that there will be no shortages like in Shanghai, highlight the very special atmosphere that pervades this area, says The New York Times.
A little further south, in Tongzhou District, schools no longer welcome children. Several outbreaks of infection have been identified in Beijing in schools, and the municipality in particular does not want to remain in this politically important area because it houses the local government.
Economic impact in China and abroad
Beijing authorities are not the only ones hoping to respond quickly enough. Nor does the central government want to hear about the complete containment of the Chinese capital. I’m not sure, in fact, that the country – or even the world – can afford this.
First, from an economic point of view. The measures imposed in Shanghai have proven that the zero-Covid policy has a significant cost. Even if the extent of the economic shock is not quantified, “we know that in Shanghai, the local economy – local shops and restaurants for example – has suffered a lot, as has port activity, which will have an impact on the value chain and exports of spare parts”, stresses Marie-Françoise Renard, Specializing in Chinese Economics at Clermont Auvergne University. “We must not forget that Shanghai is the main supplier of parts to the global auto industry,” said Shen Sun, a specialist in Chinese economic policy at King’s College London.
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Data was released in early April on economic activity in Shanghai since 1Verse January hints at the extent to which this prolonged confinement has caused economic damage. “These numbers show that after sustained growth for the first two months, there was an abrupt halt in March, although stricter measures – such as full containment – were only taken in place in April. So I expect negative growth in April,” Shane said. Sun.
Marie-Francoise Renard says the Beijing closure “will, of course, increase the impact of these measures, even if the capital does not have the economic weight of Shanghai.” For this specialist, this will be particularly bad news for the service sector, which accounts for “83% of Beijing’s economic activity.”
Capital restriction will almost certainly mark the end of the 5% growth in 2022 that the government has set itself as a target. Frederic Rollin, an investment strategy advisor who tracks the Chinese economy at Pictet Asset Management, estimates that “the confinement in Shanghai has already led to the IMF’s lowering of this estimate, and a similar situation in Beijing will confirm that China must significantly review its ambitions.”
This shutdown in two of the country’s major economic and political centers “is likely to also have a butterfly effect beyond Chinese borders,” predicts Marie-Françoise Renard. Especially in the current context of high prices. “There have been many inflationary shocks since the beginning of the pandemic — the interruption of international trade, the rise in energy prices, the war in Ukraine — to which export disruption due to restrictions must be added,” Frédéric Rollin analyzes.
But the puzzle for China is not just economic. “With Beijing, we must take into account the political ramifications of confinement,” notes Zino Leoni, a China specialist at King’s College London. The institutional capital is the city par excellence “where the Chinese Communist Party does not want to give the impression of losing control,” this expert asserts.
And with the Omicron variant, there is no satisfactory scenario. A lack of lockdown risks pitting power in the face of an uncontrolled spread of the virus, while strict confinement could prompt Beijing residents to join Shanghai residents in their protest against the “zero Covid” policy.
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“If the suffering of the population spreads to these two cities in broad daylight, there will be reason to question the official rhetoric that was saying that China managed the epidemic better than Western countries. This would be unacceptable to the authority,” says Shen Sun.
Especially since 2022 is of great political significance for Xi Jinping. “XXAnd “The Chinese Communist Party Congress – during which Xi Jinping will be reappointed – will take place this fall in Beijing and the regime has no desire for this to happen in a city still traumatized by strict confinement,” Zino Leoni said.
For him, there are two scenarios for the capital: “Either the authorities are convinced that they can beat the epidemic in Beijing thanks to a complete containment of short duration and will do so, or the situation in Shanghai continues to cause fear of an epidemic. The same for the capital, in which case it will seek authority to avoid quarantine of all residents at the same time, ”estimates this geologist.
There would be one last option: realizing that the “zero Covid” policy is less effective against the Omicron variant and adopting a more flexible strategy. But that’s impossible, Shin Sun thought. “Xin Jinping adopting this policy and abandoning it would mean that he was wrong, which is unimaginable,” he said. In short, sparing the president’s pride could cost the Chinese dearly.