‘You Can’t Go Anywhere’: China Reopening Meme ‘Lasted A Week’

I’m not sure about much these days, but 26,824 isn’t 0. Of that much, I’m certain.

26,824 is how many new local COVID cases China reported for Sunday. That figure is close to levels seen earlier this year, when a draconian lockdown in Shanghai crippled the world’s second-largest economy.

Six months and one coronation ceremony later finds Xi’s reconstituted Standing Committee trying to locate a tedious middle ground between the “COVID zero” strategy to which Xi demanded officials adhere in the months ahead of the Party congress and a more liberal approach to virus containment that doesn’t throttle the struggling economy.

Earlier this month, the Party unveiled a 20-point plan which, forgive me, came across as naive. The virus in endemic. You can’t “manage” it. It’s either lockdowns or it’s not. If it’s not, then it’s cases. And, unfortunately, if it’s cases, then it’s deaths. Hopefully not many now that we’ve had three years to learn about the pathogen, but deaths there will be.

Just a week into China’s new strategy, three people are dead from COVID in Beijing. Three people that we know of. They were the first casualties in six months, and they’re a testament to the stark reality that Xi’s regime will have to confront at some point: If the Chinese economy is supposed to get back on a path to, say, 5% growth, virus cases are going to surge and some people are going to die. Everyone, everywhere wishes that weren’t the case, but it is, and every nation on Earth got over it a long time ago.

As of late last month, China hadn’t imported an mRNA vaccine or rolled out its own. That’s a problem. The mRNA vaccines are, of course, more effective. China is building factories to produce domestic versions of the shots, but according to some reports, the technology is lagging behind. Suzhou Abogen Biosciences has an mRNA shot in clinical trials in the United Arab Emirates, and received emergency use authorization for another in Indonesia, which is great. Unless you’re in China.

Last year, the Party said it might clear the BioNTech-Pfizer shot, but later decided to focus on developing the technology domestically. The chairman of Walvax, which, along with the PLA, collaborated with Suzhou Abogen on the shot approved in Indonesia, claimed that “China has fully mastered the key core technologies of mRNA vaccines.” Now would be an opportune time to put that “mastery” to use.

According to official Chinese government data (which is famously reliable), at least  90% of the population has been vaccinated, but less than two thirds have received a booster, and substantially all of the shots were with the homegrown inactivated vaccine. Further, just over 65% of those 80 and older are vaccinated at all, and less than half of those have been boosted.

None of that bodes especially well for the sort of infection wave that’s likely to accompany a relaxation of Xi’s no tolerance approach to virus transmission. That, in turn, suggests “COVID zero” won’t be abandoned as quickly as global markets hoped. Beijing reported almost 1,000 cases on Sunday, up dramatically from Saturday, and had at least 200 more through midday Monday.

In Guangzhou, the densely-populated Baiyun district is under a five-day lockdown, and the business district suspended dine-in services and closed nightclubs. Reuters described the situation in Beijing. “Residents in [the] sprawling Chaoyang district, home to 3.5 million people as well as embassies and office complexes, were urged to stay home, with schools going online, streets unusually quiet, and stores in the district other than those selling groceries appeared mostly shut,” the linked article said, before quoting a local medical industry salesman who despaired, “You can’t go anywhere. Everything’s closed. Customers can’t come, either. What can you do? You can do nothing.”

No, you can’t. And the worse the outbreaks get, the more true that’ll be, until it’s true in the most literal sense possible. But even under the strictest lockdowns, there’s no guarantee Xi can tame the virus. As one virologist from the University of Hong Kong told Bloomberg, “It’s such a vast country and such a highly infectious virus. Getting cases back to zero from now will be very costly, but the government is still bent on doing that.”

Hong Kong Chief Executive John Lee tested positive over the weekend — after attending an APEC summit where he met with Xi.

“This is undoubtedly not the beginning of the end for lockdowns as many had expected,” SPI Asset Management’s Stephen Innes said Monday. “Investors now find themselves torn between trading the downturn in US inflation versus the negative impact on growth from the Fed hiking cycle and protracted lockdowns in China.”

“Foreigners have been dumping China assets since start of year [but] recent policy shifts have firms now saying it’s time to reload,” an ill-timed article penned by Bloomberg’s Sofia Horta e Costa read. The title: “Wall Street Wants Xi’s Money-Minting Markets to Come Back”

I don’t know how many times I’ll have to say this before it sinks in, but I’m willing to keep pounding the proverbial table: Xi Jinping doesn’t care about your capital because he’s not a capitalist. He’s supreme leader of a totalitarian state that subscribes to modified Marxism, and he dresses like Mao for special occasions. What else do you need to know?

Maybe you’ll be rewarded for investing in Chinese assets. Maybe you won’t. But either way, it’s a bad decision until Xi isn’t in power. And as long as he lives, he’ll be in power.

On Weibo Monday, one of the more popular comments was, “They lasted a week.” It was a reference to the 20-point plan.