Commentary on Political Economy

Friday, 8 April 2022




Shanghai’s Omicron Outbreak Corners Chinese Leader

Xi Jinping looked to ease China’s zero-Covid strategy until the highly contagious variant forced a return to strict lockdowns

Workers unloading supplies Tuesday on a street in Shanghai, which is in a citywide lockdown. COSTFOTO/DDP/ZUMA PRESS
By Lingling WeiStella Yifan Xie and Natasha Khan

After two years of relying on broad, hard-edged lockdowns to control Covid-19, Chinese leader Xi Jinping tried something new in Shanghai.

Mindful of the economic toll and public anger from China’s zero-Covid strategy, Mr. Xi gave the city leeway to tackle local outbreaks, people close to the government’s decision-making said. The idea was to let Shanghai target only affected neighborhoods with lockdowns. If successful, the approach would offer a template for coexisting with the virus in the years ahead.

Instead, China’s most populous city saw Covid-19 cases surge by nearly five times over the past week. While low by Western standards, Shanghai’s tally Thursday of more than 20,000 has pushed the country’s daily total to record highs. Now Mr. Xi faces a spiraling outbreak and the return of lockdowns, a twinned dilemma other world leaders hope their nations never see again.

Locales across China are complaining that Shanghai’s outbreak is spreading. Alarmed, Mr. Xi has ordered authorities to reinstate the old playbook: Since mid-March, more than 70 cities, accounting for about 40% of China’s economic output, have implemented restrictive Covid-control measures.

Shanghai, with more than 25 million people, is now in a lockdown as severe as any before it. Families worry about running out of food, and parents are desperately trying to avoid being separated from their infected children.

“Nothing is more important than clearing of the virus,” Mr. Xi told senior leaders late last month, according to one of the people close to decision-making who was briefed on the leader’s remarks.

China’s Omicron surge shows the difficulty of abandoning its zero-Covid approach—the use of stringent confinement to quash even minor outbreaks. The strategy saved lives and proved effective earlier in the pandemic, underpinning Mr. Xi’s view that China managed the virus better than the West has.

A medical worker administering a Covid-19 test Sunday in Shanghai.PHOTO: JIN LIWANG/XINHUA/ASSOCIATED PRESS

Yet Covid-19 has since become more infectious, the Chinese economy more fragile and the stakes for Mr. Xi higher. He seeks a third five-year term as China’s leader later this year.

“Xi is boxed in,” said Minxin Pei, a professor of political science at Claremont McKenna College and editor of China Leadership Monitor, a quarterly journal on Chinese politics. “Changing the zero-Covid policy now would raise more questions about his leadership. It’s politically untenable.”

Some economists now expect China’s economy to grow well below the government’s 2022 target of around 5.5%. To make up for economic losses from lockdowns, China will have to boost state-led spending on infrastructure and other big-ticket projects, increasing already-high debt levels, the economists say.

The Information Office of China’s State Council, which handles media inquiries for senior leaders, and the Shanghai government didn’t respond to requests for comment.

Shanghai's New Covid-19 Lockdown Tests China's Financial Hub
Shanghai's New Covid-19 Lockdown Tests China's Financial Hub
Shanghai's New Covid-19 Lockdown Tests China's Financial HubPlay video: Shanghai's New Covid-19 Lockdown Tests China's Financial Hub
Barricades, panic buying and empty streets are some scenes from Shanghai as China’s most populous city imposed a new lockdown. Offices and factories – including Tesla’s – were affected by China’s measures against its worst virus outbreak in two years. Photo: Aly Song/Reuters
Rising costs

China’s top leaders believe that confining residents to their homes during outbreaks is the most effective way to keep death rates low and avoid overwhelming the country’s healthcare system.

Wu Zunyou, chief epidemiologist at the Chinese Center for Disease Control and Prevention, said at a public forum in November that China would have had about 260 million Covid-19 cases and more than three million deaths if it had adopted looser restrictions similar to those in the U.S. and U.K. China has reported fewer than 260,000 cases and less than 5,000 deaths, compared with 80 million confirmed cases and nearly a million deaths in the U.S.

The economic and social costs of the Chinese strategy have climbed with the rise of more easily transmitted variants. Retail sales, tourism and manufacturing have suffered from residential lockdowns, business closures and travel bans. A population that largely supported zero-Covid measures early on has tired of tight limits on the routines of daily life.

Alexandra Wang, 33 years old, who works at a multinational company, said the government’s pandemic management has her thinking of leaving China.

Alexandra Wang’s government food delivery: two zucchini, a carton of milk, 10 sausages, noodles and a can of Spam.PHOTO: ALEXANDRA WANG

The Shanghai residential complex where Ms. Wang and 500 or so other families live was locked down on March 24 because of a few Covid-19 cases.

Three days later, the whole city headed into a lockdown. “It came as a total shock to me, especially given that officials just denied rumors about the lockdown,” Ms. Wang said.

Her food is running low, she said. On Monday, Ms. Wang got her first food delivery from the government: two zucchini, a carton of milk, 10 sausages, noodles and a can of Spam. “As someone who hasn’t been infected by the virus, my biggest question is, ‘How long do we have to endure such lack of freedom?’ ” she said.

New arrival

Before the latest outbreak, Mr. Xi and other top officials saw Shanghai as a model for China’s long-term goal of living with the virus, according to the people close to government decision-making. 

Shanghai, run by a close ally of Mr. Xi, never had serious problems. The few cases that had surfaced in the past two years were secured with limited apartment and neighborhood closures. Unlike the rest of China, mask-wearing wasn’t widely adopted by city residents.

In January, Liang Wannian, head of the central government’s expert panel on Covid control, praised Shanghai’s precision approach, saying it was more cost-effective than blanket lockdowns, in an interview with the Beijing Daily.

Then an influx of visitors arrived from Hong Kong, hoping to escape an outbreak there. Many stayed at a Shanghai hotel where officials say the virus spread in early March to the staff and beyond. At the time, city authorities said wide-ranging lockdowns wouldn’t be necessary.

In a meeting with top leaders on March 17, Mr. Xi called for Covid-control measures to be tailored to minimize public impact, according to the official Xinhua News Agency.

Yet in undisclosed comments to members of the Politburo Standing Committee, Mr. Xi made clear that China couldn’t back down from its stringent Covid approach, even if it meant slower economic growth, according to a person close to decision-making who was briefed on the remarks.

A police officer in protective gear keeping watch on a street in Shanghai last week.PHOTO: ALY SONG/REUTERS

A few days later, Shanghai initiated a two-stage lockdown. Speaking at a teleconference with other infectious-disease experts around that time, Mr. Wu, China CDC’s chief epidemiologist, said Shanghai didn’t act decisively enough in the latest outbreak and missed its chance to control the outbreak, according to a summary viewed by The Wall Street Journal. China’s CDC didn’t respond to requests for comment.

Shanghai’s secretary-general said on March 31 that local officials had insufficient understanding of the Omicron variant and failed to thoroughly prepare.

No escape

In Shanghai, people with Covid-19 are confined to home, and access to medical care for those with other illnesses has been limited. Food deliveries, arranged by local authorities, have been delayed in some neighborhoods, according to interviews with more than a dozen residents.

Local officials have reported no Covid-related fatalities. The Journal learned that at least two elder-care hospitals have been battling an outbreak, with more than 20 deaths at one of the facilities.

A nationwide outcry erupted over a video of children crying at a Shanghai medical facility after being separated from their parents and shown crammed into metal-barred beds. The hospital said it was a temporary measure.

Thousands of users of Weibo, China’s Twitter-like social media platform, have shared stories of people with life-threatening illnesses such as cancer unable to get treatment, adding to citywide feelings of helplessness.

Temporary quarantine quarters set up in at the New International Expo Center in Shanghai.PHOTO: DING TING/XINHUA/ZUMA PRESS

After testing positive for Covid on March 28, Ren Guo’an, a 61-year-old migrant worker, and his wife made more than 10 calls to hospitals and community workers, seeking spots in a local quarantine center.

“They told me there is no space left,” he said. The garment factory where he worked closed in early March, cutting off his income. His family in nearby Jiangsu province asked him not to return for fear of catching the virus.

“Fighting all the previous variants was like putting out a forest fire, it can be done,” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “But Omicron is like the wind. How do you stop the wind?”

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