Chinese authorities are seriously considering imposing a lockdown in Beijing as confirmed cases of Covid-19 in the country’s capital topped 100 on Wednesday. But after a much-criticised month-long lockdown in Shanghai, such an option could have a very high economic and political cost.
At least 113 people have been infected with Covid-19 in China’s capital, health authorities announced on Wednesday, and the pressure is growing on local officials to contain infection. Some 1,300 kilometres away, in China’s largest city Shanghai, a strict lockdown has already been imposed on the population for the past month in an attempt to stem the spread of the highly contagious Omicron variant.
Avoiding Shanghai’s mistakes
But Beijing’s picture could be grimmer, since the latest figures in the Chinese capital do not include cases detected during the testing wave launched on Sunday: Authorities have, in effect, decided that the 21 million residents of Beijing must undergo three tests over five days.
The local government wants to avoid repeating the mistakes of Shanghai at all costs: Testing had only begun there after contaminations topped 1,000, too late to contain the epidemic without resorting to the heavy artillery of China’s “zero Covid” policy, a strict lockdown. The drastic measures still in place after a month led to a rare public expression of anger in Communist China, led by a regime that has very little tolerance for political dissent.
Beijing authorities insist that no Shanghai-style lockdown will be imposed, but they do admit that “the epidemic situation is complex and severe”, Tian Wei, a local government spokesman, said on Tuesday.
Some restrictions are nevertheless already being put in place. This is particularly the case in the Chaoyang district, where most of the infections in the capital have been recorded. One of its most popular and important districts, Chaoyang houses most foreign embassies as well as luxurious Western shops, chic restaurants and bars.
It is now an unusually quiet area. Several blocks of buildings have been sealed off and the streets are almost deserted, the South China Morning Post reported. Loudspeakers inside supermarkets have been blasting messages reassuring the population that the stalls are well-supplied and there will be no Shanghai-style shortages, accentuating the unusual atmosphere in the area, the New York Times reported.
Economic impact on China … and beyond
The local Beijing authorities are not the only ones who hope they have reacted quickly enough: The country’s government is also not keen to hear about a possible total lockdown of the capital. It is not clear that the country – or even the world – could afford it after over two years of restrictions.
From an economic point of view, the measures imposed in Shanghai have shown that China’s “zero Covid” policy has a significant cost. Even if its actual impact has yet to be determined, “we know that in Shanghai, the local economy – local shops and restaurants, for example – suffered greatly, as port activity did. And that will have an impact on the value chain and spare parts exports,” said Mary-Françoise Renard, a specialist on the Chinese economy at the University of Clermont Auvergne.
“We must not forget that Shanghai is the main supplier of spare parts for the global automobile industry,” Xin Sun, a specialist in Chinese economic policy at King’s College London, added.
Data on Shanghai’s economic activity from January 1 until April give an idea on how the long lockdown caused economic damage. “These figures show that after sustained growth in the first two months, there has been a sudden halt in March, even though the strictest measures – such as total confinement – were only put in place in April. I therefore expect negative growth in April,” Xin Sun said.
A lockdown in Beijing “would of course increase the impact of these measures, even if Beijing does not have the economic importance of Shanghai,” Renard said. For the expert, it would be especially bad news for the service sector, which represents “83 percent of Beijing’s economic activity“.
A Beijing lockdown would certainly sound the death knell to the government’s objective of 5 percent growth for 2022. “The measures in Shanghai have already led the IMF (International Monetary Fund) to slash down this estimation, and a similar situation in Beijing would confirm that China must considerably downgrade its predictions,” said Frédéric Rollin, an investment strategy advisor in charge of the Chinese economy at Pictet Asset Management.
A halt in activity in two of the country’s main economic and political centres “will most likely also have a butterfly effect outside China’s borders”, Renard said. Especially in the current context of rising prices. “There has been a multitude of inflationary shocks since the start of the pandemic – a halt in international trade, rising energy prices, the war in Ukraine – to which must be added the disruption of exports due to Covid-19 measures,” Rollin said.
But China’s headache is not just economic, it is also political. “With Beijing, you also have to take into account the political repercussions of a lockdown,” Zeno Leoni, a China expert at King’s College London, explained. The country’s capital is the one city “where the Chinese Communist Party does not want to give the impression that it might be losing any control,” he added.
And with the Omicron variant of Covid-19, no scenario seems to be satisfactory. On one hand, failure to impose measures could force the government to face the uncontrolled spread of the virus. On the other, a strict lockdown could push Beijing’s population to the brink and spark their anger, like in Shanghai, where residents are strongly opposing the “zero Covid” policy.
“If the distress of the inhabitants of Beijing and Shanghai came to light, it would discredit the official rhetoric that China handled the pandemic better than Western countries. And it would be unacceptable to the authorities,” Xin Sun said.
Even more so in 2022, a very important year for President Xi Jinping. “The 20th Congress of the Chinese Communist Party – during which Xi Jinping is poised to be re-elected – is taking place this autumn in Beijing. And the regime wants to avoid at all costs that such a historic event takes place in a city traumatised by another strict lockdown,” Leoni explained.
According to the expert, there are two possible scenarios for China’s capital: “Either the authorities are convinced that they can get rid of the pandemic in Beijing with a total but short lockdown, and they will absolutely impose it … or the situation in Shanghai will keep dragging on, leading to fears that anger would also rise in the capital. In this case, the authorities could try to avoid locking all inhabitants up at the same time,” the Sinologist said.
But there could be one last option: recognising that China’s “zero Covid” policy is not as effective when it comes to the Omicron variant, and thus adopt a more flexible strategy. For Xin Sun, this would be impossible: “Xi Jinping has made this policy his own, and abandoning it would mean that he made a mistake, which is unimaginable,” the expert predicted.
This story has been adapted from the original in French.