SinoInsight 1
Nov. 16
Qiushi, the CCP Central Committee ideological journal, published a nearly 6,900 character-long piece by Central Policy Research Office director Jiang Jinquan titled, “Ten Years of Great Changes in the New Era” (新時代十年的偉大變革).
The article touted Xi Jinping’s “achievements” during his decade in charge from three aspects, namely, “historic changes” (歷史性變革), “results of great struggle” (偉大斗爭的結果), and “landmark significances” (具有里程碑意義). The article also claimed that Xi’s ten years at the helm brought “socialism with Chinese characteristics into the new era” and created the “two miracles” of “rapid economic development and long-term social stability.”
The article noted that “great changes in the decade of the new era” were the “hard-won” outcome of “great struggles.” Party members are urged to “deeply understand” that while Xi’s predecessors made “great achievements,” they also left behind “a number of prominent issues and problems — some of which had been building up for years and others which were just emerging” that “demand urgent resolution” (this was mentioned in Xi’s 20th Party Congress work report). Also, Xi faced “new changes and challenges in the domestic and international situation” during his first ten years in office. In sum, the decade of Xi’s “new era” was “extremely unusual and extraordinary,” with “many risks and challenges, contradictions and problems, the heavy task of correcting the root cause and eliminating evil, the difficulty of overcoming strongholds and removing persistent miasma,” which are “rare in the world and rare in history.”
The article added that Party Central “with Comrade Xi Jinping at the core” had, with “great historical initiative,” correctly “judged the situation, made bold decisions, forged ahead with determination, overcame difficulties, united and led the people to surmount the risks of fording beaches (涉灘之險), scaling hills, and breaking barriers, accomplished a lot of long-term and important matters, turned the tide (挽狂瀾於既倒), prevented structural collapse (扶大廈之將傾), and wrote a magnificent chapter of great changes in the great struggle.”
The article stressed that Xi’s “great changes” were achieved by resolving “prominent contradictions” within the Party and in economic and social development, as well as in “responding to external risks and challenges.”
In discussing Xi’s resolution of “prominent contradictions within the Party,” the article noted that Xi faced a “weakening of the Party’s leadership,” “some shocking corruption issues,” as well as “extreme individualism, historical nihilism, and other erroneous trends of thought from time to time,” among other outstanding issues, when he first took office. Xi then resolved a large number of these longstanding problems through the “combined fist” of comprehensively and strictly governing the Party over the past 10 years, and explored the “correct way” of relying on “self-revolution” to bring the Party out of the “historical cycles of governance and chaos, and rise and fall.”
In concluding, the article restated that the “great changes in the decade of the new era” were not achieved easily but were obtained through conquering “various risks, challenges, and even turbulent waves.” The article also credited the “achievements” to the “resolute struggle of the whole Party and the people of all ethnic groups in the country.”
Nov. 18
State mouthpiece Xinhua reported that Chen Wenqing, a Politburo member and Party secretary of the Central Political and Legal Affairs Commission, carried out “investigation and research” in the cities of Xi’an, Yan’an, and Weinan in Shaanxi Province from Nov. 16 to Nov. 18. Chen also did “in-depth study of the spirit of the 20th Party Congress and the study of implementation initiatives” with officials from the grassroots courts, procuratorates, public security, national security, and judicial administrative agencies.
Chen said that “studying, propagating, and implementing the spirit of the 20th Party Congress is the primary political task of political and legal affairs organs at present and in the future.” He also urged police officers to “fully implement the major decisions and arrangements made at the 20th Party Congress.”
When he visited the Yan’an Revolutionary Memorial Site as part of his “investigation and research” trip, Chen Wenqing stressed that the political and legal affairs apparatus should defend the “two establishes” and achieve the “two safeguards” with practical actions. He also repeated other political slogans like how the “political and legal affairs apparatus is surnamed ‘Party’” (政法姓黨) and “the Party’s absolute leadership over political and legal affairs work.”
OUR TAKE
1. The Qiushi article by Jiang Jinquan, a Xi ally, builds on Xi Jinping’s 20th Party Congress report, underscores Xi’s difficulties in winning “reelection” for a third term, glorifies his “achievements” over the past decade, sets him up as the “savior” of the CCP, and hints at a coming intensification of factional struggle between the Xi camp and the Jiang Zemin faction.
Jiang Jinquan’s claim that Xi faced many “prominent contradictions within the Party” when he first took office and that he spent the following decade resolving many “longstanding” issues, including “a number of prominent issues and problems” left behind by his predecessors, affirms our oft-stated observations. We noted that Xi did not have a faction before assuming power in 2012 and spent the better part of his two terms consolidating power. While Xi’s power centralization is almost complete and his political strength is peaking, he still has unfinished business left with the lingering “evil” left in the regime, notably, the Jiang faction with its “strongholds,” “persistent miasma,” and “shocking corruption issues.”
Jiang Jinquan’s article also casts Xi’s coming “self-revolution” moves as necessary for the regime’s survival. Through his anti-corruption campaign and other “rectification” efforts, Xi had “turned the tide” and “prevented structural collapse.” However, Xi must continue with “self-revolution” and “urgently resolve” the “prominent issues and problems” left behind by his predecessors to help the Party escape the “historical cycles of governance and chaos, and rise and fall.” By predecessors, Xi is almost certainly referring to Jiang Zemin and the faction named after him. That being said, Xi could go after all individuals and interest groups who decide not to align themselves with his agenda and instead put up “passive resistance” or more blatant “anti-Xi” actions. Hu Jintao and the Tuanpai are not likely to be touched by Xi’s “self-revolution” campaign unless they move to challenge Xi, which is itself a very low probability event as the Tuanpai being eased out of the top leadership at the 20th Party Congress indicates that it has very little remaining influence.
2. Chen Wenqing inspecting Shaanxi Province and visiting the Yan’an revolutionary area also affirm our previous analysis that Xi’s “self-revolution” campaign will be a “Yan’an Rectification Movement-style effort to purge the Party ranks of lingering factional rivals, those with disloyal inclinations, and others opposed to his rule, and bring ‘unprecedented unity’ to the CCP.”
The coming “rectification” of the political and legal affairs apparatus could start in Shaanxi. The Shaanxi provincial political and legal affairs system has constantly put up resistance to the Xi leadership, notably through the “Shaanxi 100 Billion Mining Case” and the construction of illegal villas in the Qinling Mountains. Xi Jinping could carry out a large-scale purge in Shaanxi to “kill chickens to scare the monkeys” and persuade those who are still thinking of opposing him to instead unite around his leadership.
Xi’s purge of the political and legal affairs apparatus and other “self-revolution” actions could kick into full swing and become more obvious after remaining top personnel reshuffles are finalized at the 2023 Two Sessions. Xi still needs to appoint a new president of the Supreme People’s Court and name a new procurator-general.
It cannot be ruled out that Xi will commence his “rectification” efforts before personnel reshuffles are completed as he seeks to assert his authority and strengthen his control over society amid worsening crises for the regime. Xi is already experiencing difficulties in easing his “zero-COVID” policy, and China’s economic situation is looking increasingly bleak.
3. The Xi leadership’s propaganda messaging indicates that Xi Jinping is not totally dominant in the regime even with many of his loyalists in top office despite the consensus of most China watchers. Also, factional struggle in the CCP elite has not ended, but is set to escalate as Xi steps up his “self-revolution.” Businesses, investors, and governments must improve their understanding of CCP elite politics to avoid wrongly assessing political risks in China and increasing their own risks.
SinoInsight 2
Zhengzhou Foxconn incident
Background
The Foxconn factory in Zhengzhou City—the world’s largest iPhone factory—saw an outbreak of COVID-19 in early October. Thousands of workers eventually fled the campus in late October after a quarantine and strict “closed-loop management” was enforced. From early November, Zhengzhou Foxconn sought to hire 100,000 new workers by offering higher salaries and bonuses; the factory previously employed about 200,000 people before the COVID-19 outbreak.
The incident
Many workers from the Foxconn dormitory in Zhengzhou’s Yubei District tried to break out of the “closed-loop management” blockade and escape the campus late at night on Nov. 22. Videos and information circulating on Chinese social media showed workers clashing violently with “anti-epidemic personnel” clad in white hazmat suits and local police. The police eventually used tear gas on the workers and beat up some of them, while some workers fought back with fire extinguishers. Estimates from anecdotal evidence suggest that the protesting workers numbered in the thousands or tens of thousands.
Fierce skirmishes between Foxconn workers and local public security continued on Nov. 23 and well into the evening. Videos posted on the internet showed large numbers of workers, many armed with long sticks, steel pipes, and iron fences, moving toward armed police stationed at the factory gates. The workers hurled the objects they were carrying at the police, forcing a group of shield-carrying riot police officers to retreat.
A few hours after the violence broke out, the Zhengzhou government announced the implementation of so-called “mobility management” in parts of the city from the early morning of Nov. 25 to Nov. 29.
On Nov. 24, Reuters reported that larger protests at Zhengzhou Foxconn were “under control” and the company had “continued to communicate with employees engaged in smaller protests,” according to a source.
On Nov. 25, a source familiar with the matter told Reuters that over 20,000 workers had left the company. Those workers were mostly new hires who had not yet started working on the production line. Another Foxconn source said the Zhengzhou incident had “a big impact on our public image but little on our (current) capacity. Our current capacity is not affected.” Reuters also reported that Apple’s iPhone production in November could slump by at least 30 percent over the Zhengzhou Foxconn incident, citing a person with direct knowledge of the matter.
Cause
According to accounts by the protesting workers on social media and news reports, the incident was triggered by the poor quarantine conditions in the Foxconn dormitories, including workers being made to share accommodations with colleagues who tested positive for COVID-19.
The workers also accused Zhengzhou Foxconn of misleading them over compensation benefits. They claimed that while Foxconn advertised that they would receive 25,000 yuan in bonuses after two months of work, this was revised after they arrived on the campus so that they needed to work four months instead to get the full bonus payout. A recruitment advertisement published on Nov. 1 that was circulated online noted that workers are eligible for a 400-yuan bonus for each day of work and a bonus in excess of 15,000 yuan for a monthly “perfect attendance.” However, workers said that Foxconn postponed payment of the “perfect attendance” bonus for November and December to March and May next year, which meant that they had to work for an additional 60 days on regular wages before their bonus pay was secure.
Li Qiang, head of the New York-based NGO China Labor Watch, told Radio Free Asia in an interview on Nov. 23 that Foxconn was playing word games in its agreement with workers. For instance, workers were not eligible for bonuses if they resigned halfway, which essentially compelled them to stay for another two months to receive the full bonus payment as advertised by Foxconn. Li believed that Foxconn likely issued a stealth revision of its compensation benefits scheme after it had recruited enough workers, and that such incidents had happened before.
Statement and compensation
On Nov. 23, Hon Hai Group, the parent company of Foxconn, published a statement on the Zhengzhou Foxconn incident denying that it had revised its compensation benefits and that reports of new recruits being made to live with infected workers were “untrue.” Hon Hai also said that “regarding any violence, the company will continue to communicate with employees and the government to prevent similar incidents from happening again.”
On Nov. 24, Foxconn said in a statement that their team discovered that a “technical error” had occurred during the “onboarding process” (i.e. hiring of new workers) that caused new recruits to receive contracts intended for existing employees. The company apologized for the “input error in the computer system” and guaranteed that the “actual pay is the same as agreed and the official recruitment posters.” Meanwhile, Foxconn offered 10,000 yuan (paid in installments, with a payment of 8,000 yuan upfront) to protesting workers who agreed to resign and leave the factory. Videos circulating on social media showed many workers accepting the offer and receiving their upfront payment before boarding company buses to the train station that day.
OUR TAKE
1. We earlier cited what was going on at Zhengzhou Foxconn in October as an example of how Beijing’s “zero-COVID” policy was badly affecting China’s manufacturing sector and why Xi Jinping has no choice but to relax epidemic prevention and control restrictions. We also noted that Beijing “cannot afford more incidents” like Zhengzhou Foxconn lest it convinces Apple and other foreign multinationals to pull their supply chains out from China.
The recent headline-grabbing violence at the Zhengzhou Foxconn campus further highlights the capriciousness of the CCP authorities’ “zero-COVID” policy and the incompetence of local officials. The actions of local officials and Foxconn will seriously damage the business environment and affect China’s broader economic recovery. The Zhengzhou Foxconn violence will also likely sway foreign multinationals to diversify their supply chains and businesses away from China and even pull out of the mainland more completely to avoid costly political risks. Moreover, Xi’s effort to cast off his and the CCP’s reputation of being “wolf warrior” and a “brutal dictator” will likely be set back some more by what happened at the world’s largest iPhone factory, affecting the regime’s ability to carry out “great power diplomacy,” attract foreign investments, and stabilize the deteriorating domestic situation.
2. We see several reasons for why Foxconn paid out compensation to protesting workers:
- The PR damage to the company and the CCP authorities will likely cost both parties more in the long run than paying workers to leave. For instance, if clashes between workers and public security officers escalate badly (including serious bloodshed or loss of life), Zhengzhou Foxconn could find it harder to hire workers to complete its current orders, lose future orders, and even be forced to close. Neither Zhengzhou Foxconn nor the Henan authorities can afford the economic impact of reduced orders or the shuttering of the plant.
- The Zhengzhou Foxconn incident has attracted too much negative international attention. If the situation is allowed to fester and spiral out of control, then the Xi leadership’s efforts to ease “zero-COVID” and step up diplomacy to court foreign investments and persuade multinationals to keep their businesses and supply chains in China would be for naught.
- Social tensions and “contradictions” in China are now very high due to the “zero-COVID” situation and a worsening economy. The CCP authorities thus have a strong incentive to quell the Zhengzhou Foxconn incident as quickly and “peaceably” as possible to prevent escalation and spreading of similar clashes and protests across the country, which could overwhelm the regime’s “stability maintenance” capabilities and imperil Xi and the Party.
- Local governments can no longer unilaterally mobilize the armed police to suppress protests and riots that go out of hand, unlike during the Jiang faction’s era of dominance. Instead, they have to rely on existing public security personnel, or borrow security forces from nearby areas and hire “temporary workers” at high cost to handle large-scale destabilizing events. The costs of “stability maintenance” will pile up the longer serious social disturbances drag on.
SinoInsight 3
Beijing continues trying to relax “zero-COVID” while keeping the policy on the books. Local governments, however, are not being very cooperative.
Policy
Nov. 17
Guo Yanhong, director of the PRC National Health Commission’s medical emergency department, said at a State Council press conference that all local governments are required to “follow the principle of combining emergency services” and make preparations to convert “existing large venues such as convention and exhibition centers, sports facilities, etc.” into “fangcang” makeshift hospitals.
Guo added that the construction of “fangcang” hospitals is meant to minimize the utilization of daily medical resources, as well as coordinate the treatment of those with COVID-19 while guaranteeing access to regular medical services.
Nov. 24
PRC transport minister Li Xiaopeng presided over an all-hands meeting on summarizing transportation and logistics work for the first seven months of 2022, as well as studying and deploying subsequent work.
The meeting said that the current national epidemic situation can be described as “multiple [outbreak] sites, many areas, frequent outbreaks,” and remains “severe and complex.” Meanwhile, some localities are still taking excessive policy steps (層層加碼) or resorting to ‘one-size-fits-all’ (一刀切) approaches in controlling the flow of freight.
The meeting then required that officials:
- Resolutely prevent the spread of the epidemic through transportation and logistical links.
- Resolutely prevent the backfiring of excessive freight controls.
- Resolutely guarantee safe and smooth transportation.
- Resolutely resolve the problem of urban logistics and distribution to households.
- Resolutely ensure the orderly transit and transportation of key materials in epidemic areas.
Propaganda
Nov. 24
State mouthpiece Xinhua published a commentary piece titled, “Unwavering, Unshakable, Seizing the Initiative in Fighting the Epidemic” (不動搖、不走樣，掌握戰“疫”主動權).
The article acknowledged that the current epidemic situation in some areas “is at a high level and is showing an upward trend,” and “the scope and scale of the epidemic may expand further.” The article required all local governments to adhere to the ninth version of CCP’s epidemic prevention and control plan and the twenty “optimization” measures “without wavering and without going out of shape,” as well as “strive to achieve the maximum prevention and control effect at the minimum cost.”
Nov. 25
Xinhua published a commentary article titled, “Steadfastly and By All Means — An Overview of the Coordination of Epidemic Prevention and Control and Economic and Social Development Around the World” (堅定不移 千方百計 — 各地統籌疫情防控和經濟社會發展綜述).
The article explained that the “epidemic situation is still severe and complicated.” Localities are required to implement the “decisions and deployments of Party Central, grasp the efficient coordination of epidemic prevention and control and economic and social development work, do everything possible in taking measures to strive to achieve the maximum protection of people’s lives and physical health, and minimize the impact of the epidemic on economic and social development.”
Social reactions and commentary
Nov. 22
Jin Dongyan, a professor at the University of Hong Kong’s School of Biomedical Sciences, told Deutsche Welle that the PRC is not actually opening up or “scrapping ‘zero-COVID’” with its current policy measures.
Jin said that the Omicron strain of COVID-19 is even less lethal than the seasonal flu, but “some people” exaggerated the “number of deaths of infinity,” which is “complete nonsense.” He added, “the Chinese leaders were deceived by them, and were terrified. There is no place in the world (like China). Incidents like the one with Foxconn in Zhengzhou will never occur anywhere else in the world. This situation makes people all over the world look down (on China).”
Jin also said that the PRC’s epidemic prevention and control measures leave many people frightened of being hauled away to “fangcang” hospitals. “A lot of people don’t need treatment. What they need is a psychiatrist and psychological treatment. If things aren’t handled well, then it would be fear that kills people, not the virus. (This situation) is man-made,” he said.
2. Hong Kong online news portal HK01 published a piece titled, “Not Saying the Words ‘Let Go’ Will Not Help China Exit the Epidemic” (諱言「放開」二字 恐不利於中國走出疫情困境).
The article noted that human beings are “living together” with the coronavirus everywhere around the world except China, and this leaves the PRC, which clings to “zero-COVID,” with a difficult choice. The article said that the Chinese economy, people’s livelihood, and the “national tolerance” have reached a critical point, with the people’s confidence in the success of epidemic control measures rapidly disappearing and grievances boiling over in many places. However, the PRC cannot open up and exit “zero-COVID” without inviting the pressure of increased cases upon the regime due to the high infectivity of the virus.
The article then urged the PRC government to recognize the “practical and long-term significance” of “letting go,” and encourage the Chinese people to “speak up boldly and shout louder.”
Nov. 23
1. In reporting Shijiazhuang’s flip-flop in “optimizing” on “zero-COVID,” the Financial Times quoted an official with the city’s Center for Disease Control and Prevention as saying, “We wanted to do what the people were calling for. We wanted to open up, but then we did and everyone was scared. The changes have been fast. We’ve totally confused residents.”
The official added, “The government faces a dilemma. China’s economy has turned into what it is now. It’s not good . . . [but] if we fully open up, hospitals will be overrun, not only with Covid cases but also the other underlying disease it brings out. It’ll take a lot of medical resources. We’ll be overwhelmed.”
2. Chinese people watching the World Cup in Qatar and seeing maskless crowds took to social media to express anger and disappointment with the CCP’s “zero-COVID” policy. Some Western media outlets reported the phenomenon.
Nov. 25
Protests broke out in Urumqi City in Xinjiang Province as social anger erupted over a prolonged lockdown (over 100 days) and two lockdown-related incidents. The first incident was the death of at least 10 persons (anecdotal information circulating on the internet puts the death count at 44) and the injury of at least nine others in a fire in an apartment block on Nov. 24 that many felt could have been prevented if not for COVID restrictions (videos circulating on the internet appeared to show that fire escape routes had been blocked with wire). The second incident was a man being beaten by the police from the 104th Bingtuan (a unit of the Xinjiang Production and Construction Corps) in Lianxing District.
Both incidents led people to take the streets to protest and demand that the local government lift lockdowns. Videos and information circulating on social media saw some people waving the PRC flag and singing the PRC anthem as they demonstrated. People were also seen heading to government offices to protest the lockdown.
Nov. 26
1. The Urumqi Municipal Government Information Office held a press conference on epidemic prevention and control. Officials announced that the city had “achieved the goal of basically ‘zero-COVID’ in society,” and will restore the “living order” of residents in low-risk areas in three stages in an “orderly manner.” Officials also denied allegations that wire was used to seal off the fire escape in the building where the fire broke out on Nov. 24.
2. The Urumqi “zero-COVID” fire tragedy triggered several protests in Xinjiang and in parts of China.
On Urumqi Middle Road in Shanghai, hundreds of youths gathered to mourn the victims of the Urumqi fire and protest the CCP regime. People held up blank sheets of paper and yelled, “End lockdowns in Xinjiang” and “If not free, better to die.” In a viral video, a crowd of people echoed and enthusiastically responded to a person shouting, “Down with the CCP! Down with Xi Jinping!” The local authorities allegedly arrested at least two cars full of protesters, according to information circulating on social media.
At the Communication University of China in Nanjing, students also held up blank sheets of paper to mourn and protest the Urumqi fire tragedy. They were heard yelling, “Long live the people, may the deceased rest in peace.” Videos circulating on the internet captured the university’s leading officials showing up on scene to warn the protesting students that epidemic prevention and control is a national policy and that they will “one day pay the price for everything you’ve done today.” A student shouted in response, “The gods are watching, so don’t think you can get away with anything!” (舉頭三尺有神靈).
Nov. 26 to Nov. 27
Students from at least 76 institutes of higher learning, including Wuhan University of Technology, Xi’an Academy of Fine Arts, Sichuan International Studies University, Fudan University, and Shanghai Jiaotong University, protested the Urumqi fire tragedy. According to information and videos circulating on social media, students sang protest songs (The Internationale, Beyond’s “Boundless Oceans, Vast Skies” [海闊天空], etc.) as well as put up posters with protest slogans and graffiti to express their dissatisfaction to the disasters caused by strict epidemic prevention and control.
Nov. 28
Protesters gathered at Xinyuanli community in Beijing’s Chaoyang District early in the morning were heard yelling, “we don’t want nucleic acid testing, we want freedom”; “we don’t want lockdowns, we want to live (normally)”; “(we want) rule of law”; and “we don’t want the CCP, we want China.”
Local lockdowns
Nov. 17
According to mainland media reports, the cities of Guangzhou, Shenzhen, Foshan, and Dongguan in Guangdong Province were required to have more than 10,000 “fangcang” hospital beds in reserve, while the cities of Zhuhai, Jiangmen, Zhongshan, and Huizhou were required to reserve over 5,000 “fangcang” beds, of which between 1,000 to 3,000 are single beds. All construction work must be completed within seven days.
Mainland media noted that the Guangdong authorities were planning at the time to have 187,340 beds available in 21 prefectures and municipalities in the province. Eventually, Guangzhou and its eight surrounding cities will have nearly 130,000 beds available for use within 24 hours.
Nov. 19
A copy of an “emergency grave removal announcement” issued by the Shenquan Town government in Guangdong’s Huilai County was circulated online. The “announcement” stated that the Guangdong provincial government had required that all counties and districts must build a “fangcang” hospital and graves within the confines of land being expropriated for the hospitals must be relocated within two days. Graves that are not moved within the time limit are to be treated as “unowned” graves.
Nov. 22
In a report on China’s effort to fine-tune “zero-COVID,” The New York Times cited Nomura as recording that 49 cities representing a third of China’s population and two-fifths of its economic output were “under partial or complete lockdowns” at the time, “a sharp increase from a week earlier.”
Nov. 24
The Wall Street Journal cited Capital Economics as saying that more than 80 Chinese cities were dealing with “high levels of infection” at the time, compared with 50 during Shanghai’s lockdown. The 80 cities generate half of China’s GDP and ship around 90 percent of its exports. Goldman Sachs also estimated that cities accounting for 51 percent of the Chinese economy have been placed under some type of lockdown.
Epidemic prevention fraud
Nov. 14
The police in Hohhot City in Inner Mongolia reported that an employee of Inner Mongolia Saisi Gene Technology Co. Ltd. registered some negative nucleic acid test results as positive. The police subjected the employee to “criminal mandatory measures” and would carry out further investigations.
Nov. 19
According to information circulating on Chinese social media, the Chongqing North Railway Station has many agents who seek out people to be voluntarily quarantined in “fangcang” hospitals. The people are promised food and a payout of 500 yuan as long as they stay in “fangcang” accommodations for five days. The “fangcang” hospitals then reportedly claimed a government subsidy of 3,500 yuan per “quarantined” person.
On Nov. 22, the Chongqing police announced that the aforementioned arrangement was just “rumors,” a move which suggested that there is some credibility to the information. Previously, there was also information circulating that people were being recruited to stay in “fangcang” hospitals in Hohhot City so that the local government could obtain epidemic prevention subsidies.
Nov. 23
Mainland media compiled statistics showing that there were seven reported cases of nucleic acid fraud in 2022. Also, many provincial governments conducted large-scale inspections of nucleic acid testing agencies between June to July 2022, and 250 third-party testing companies were ordered to make “rectifications.” Many of the third-party testing firms were listed on mainland exchanges or subsidiaries of companies preparing to go public.
OUR TAKE
1. CCP officials are defaulting to Party culture-derived habits in implementing the “optimization” of “zero-COVID” despite the Xi leadership’s effort to explicitly warn them against doing so.
For instance, central government agencies and the propaganda apparatus appear to be going through the motions of urging local governments to adopt the “20 measures” while sticking “unswervingly” to “zero-COVID.” Unless explicit guidance on how to execute the contradictory policies was given to local officials, the central government is in a way shifting the responsibility of properly easing “zero-COVID” to the localities.
In weighing between “optimization” and the strict implementation of “zero-COVID,” most local officials would opt for the latter because it is more straightforward and they can more easily return the responsibility of the consequences of draconian epidemic prevention and control back to the central government. News about “zero-COVID”-related fraud also indicates that strong interest chains have already been formed and suggests that local officials have a perverse incentive to stick to the policy instead of “optimizing” it. As long as Beijing keeps “zero-COVID” on the books, local officials are prone to the “cobra effect” where they find ways to perpetually fight “outbreaks” (working with local testing companies to fake results, etc.) and justify to the central government their decision to be “unwavering” in maintaining lockdowns instead of gradually relaxing “zero-COVID.”
The eruption of social tensions could convince local officials to double down on “zero-COVID” as a means of “maintaining stability.” Apart from Zhengzhou and Urumqi, protests over the “zero-COVID” policy and the Urumqi fire tragedy have broken out in Gansu, Beijing, Guangzhou, Chongqing, and Shanghai, as well as many colleges, according to videos and information circulating on the internet. Ironically, the tighter local governments clamp down on society under the guise of defending the “national policy of epidemic prevention and control,” the more trouble they will create for themselves as people lose their patience with the lockdowns and the CCP. The anti-“zero-COVID” protests could inspire more similar demonstrations across the country, and nationwide protests will sharply increase political risks for Xi Jinping and the CCP regime.
2. Xi’s remaining factional rivals and interest groups could look to exploit the policy confusion over “zero-COVID” to sabotage the Xi leadership. For instance, Xi’s opponents could inspire fear in the populace, agitate “anti-Xi” sentiments on the mainland to trigger more protests, and take measures (fake positive tests and “outbreaks,” etc.) that would perpetually delay the “optimization” of epidemic prevention and control in the localities. The HK01 article on the difficulties of having China abandon “zero-COVID” is a case in point.
If Xi suspects foul play, he could step up his “self-revolution” campaign imminently and purge “tigers” ahead of schedule.
3. The CCP’s present troubles with relaxing “zero-COVID” align with our earlier analysis of the situation. Xi Jinping may wish to gradually bring the country out of lockdown to rescue the economy and turn around the regime’s fortunes, but will be constantly foiled by the officialdom and the health risks and infrastructural challenges of exiting “zero-COVID.” Xi will not be able to successfully shift the regime away from “zero-COVID” unless the regime corrects its excessive propaganda about the lethality of the virus (see Jin Dongyan’s observation), make interest groups and chains that have formed around profiting off the policy redundant, and overcome the problems in the officialdom associated with Party culture-derived behavior. Meanwhile, as Beijing struggles with “optimizing” epidemic prevention and control, the Chinese people will get angrier and lose even more trust in the CCP.
Prolonged flip-flopping on “zero-COVID” will be hazardous to the “health” (political legitimacy) of the CCP regime and Xi’s personal political situation. The regime will remain susceptible to Black Swan events and other chaos should the many difficulties facing China lead to mass unrest and escalate intra-CCP factional struggle.
