(C) Bloomberg. BEIJING, CHINA – MAY 22: Chinese President Xi Jinping arrives at The Great Hall of the People for the opening of the National People’s Congress on May 22, 2020 in Beijing, China. China is holding now its annual Two Sessions political meetings, that were delayed since March due to the Covid19 outbreak. (Photo by Andrea Verdelli/Getty Images)
(Bloomberg) — As Chinese officials in Wuhan struggled to contain a deadly coronavirus outbreak in January, it was Xi Jinping who stepped in and took control.
Now, the president who declared himself personally responsible for every aspect of the China’s response to the pandemic faces fresh test: a rapidly growing outbreak in Beijing.
China Faces Balancing Act as Beijing Outbreak Grows to 130 (2)
The cluster of more than 130 cases in the city that is the seat of Communist Party power risks undermining the government’s narrative it handled the epidemic better than many western nations. It could upend its nascent economic recovery if it turns into a second wave. The stakes are even higher for Xi, who has staked his credibility on China’s response and sought to frame himself as a global leader in the crisis — to the chagrin of nations from the U.S. to Australia.
It comes as Xi grapples with external challenges, too. He’s navigating a U.S. president in the midst of a re-election campaign who has taken to frequent outbursts against China on everything from trade to Covid-19 to Beijing’s growing influence on Hong Kong. And now China is embroiled in a risky spat with neighboring India after an altercation in a remote, disputed border area of the Himalayas left 20 Indian soldiers and an unknown number of Chinese troops dead.
In recent years Xi has essentially made himself “chairman of everything,” which risks complex issues becoming bottlenecked as he seeks to handle them personally. It also means that any missteps could be seen as his own.
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“This poses challenges for Xi as he has to carefully navigate through both a domestic economic slowdown and external pressures of being gradually isolated by the whole Western world,” said Chen Daoyin, a political commentator and former professor at the Shanghai University of Political Science and Law. “If China proves its model to be successful again, it will earn more credit globally and at home.”
Xi was banking on that when in February, at the height of China’s epidemic, the rare release of internal speeches showed he was personally leading the government’s response, including ordering the lockdown of about 60 million people in Hubei province at great economic and social cost.
In the months that followed, it appeared Xi had been validated. New cases dropped as officials implemented strict quarantine, surveillance and testing measures. Public anger over local officials’ initial response turned to nationalist pride as governments around the world struggled in turn to contain their own outbreaks.
The resurgence of cases in Beijing threatens to undo that success. Infections have already spread to at least four other provinces, all stemming from the city’s largest wholesale market. Gao Fu, head of China’s Center for Disease Control and Prevention, said it’s likely the virus had been spreading a month before it was discovered last week.
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Still, the city has so far refrained from the citywide lockdowns that China employed to stem the spread of Covid-19 in Wuhan and in the northeast region in a bid to minimize disruption to the country’s most important city. Officials are instead relying on an aggressive contract tracing campaign to identify and isolate people who had contact with the market.
They also have more infrastructure in place this time around, including the ability to conduct more than 90,000 tests a day and a “health code” system available through residents’ cellphones that can show whether someone is at risk of being infected.
“We think the second wave is more manageable than the first wave,” said Robin Xing, chief China economist at Morgan Stanley (NYSE:MS) Asia. “The more active surveillance and improved testing and contact tracing will likely result in selective rather than massive lockdowns,” he said, allowing “economic activity in most regions of China to resume while keeping public health challenges in check.”
But avoiding economic pain isn’t Xi’s only consideration. In February, he warned government and party officials that they had to “spare no effort” to contain a cluster that broke out in the Beijing’s West District — home to central party and government compound Zhongnanhai.
“The safety and stability of the capital city directly concerns the broader outlook for the party and the country,” he said.
Cai Qi, Beijing’s party chief and a close ally of Xi, on Tuesday vowed to “resolutely contain the virus.” He urged cadres to “take strict precautions, maintain social stability and make sure no serious incidents happen again,” according to the official Xinhua News Agency.
Beijing has since then moved to close down schools, reinstate strict restrictions in housing compounds and limit outbound trains and flights. Local officials warned on Wednesday that more cases will be reported in the coming days.
The source of the outbreak remains unclear, though Chinese officials have indicated they think it came from Europe. Salmon is being boycotted in China after the virus was traced to the chopping board of a vendor selling the imported seafood and authorities are testing some food imports before allowing them in the country, even though scientists say that there’s no evidence that food can transmit the pathogen.
The outbreak in Beijing comes as Xi faces criticism from other nations even as he seeks to tout the advantages of the Chinese approach. On Wednesday, China and India sought to defuse their dispute, even as each side blamed the other for causing the border clash and as their local media whipped up nationalist fervor.
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“This is a time when you think that Beijing would want to stabilize its periphery, ease up on confrontation, and focus on the major issues” like the economy and unemployment, Daniel Russel, a former U.S. assistant secretary of state for East Asian and Pacific affairs, told Bloomberg Television. “And yet the border with India is not the only place where China is throwing punches.”
Covid-19 cases are likely to keep rising as China embarks on a series of high-profile international meetings meant to burnish its virus-fighting credentials. On Wednesday, Xi hosted a summit about battling the virus with African nations, before a high-level Belt and Road video conference scheduled for Thursday. A virtual China-EU officials meeting is set for next week.
Chen, the political commentator, said the pandemic has “fundamentally changed” China’s relationship with the west.
“China faces threats of breaking up global supply chains, the possibility of a new Cold War with the west and its authoritarian rule clashes with the ideology of the free world,” he said. “How China navigates through such a predicament is the question Xi has to answer.”
(C)2020 Bloomberg L.P.