“Zero Covid”: the real message behind the Shanghai lockdown

This column was previously published in L’Express on 19th May 2022

The human drama being played out at the moment in the huge Chinese city of Shanghai shouldn’t cover up the signals that Beijing is putting out to its population and to the West.

Could it be that China is about to become the biggest “jailer in the world”? 25 million inhabitants of Shanghai have been subjected to a lockdown for almost two months now. In what those people have said — as in the documentary April Voices, which has gone viral on the social media — there is a reminder of the first days of the Covid crisis in the West. Apart from the inhumanity revealed, the lockdown of this megalopolis sends us three messages that give us a hint as to what Xi Jinping’s third term of office is going to be like.

A whole region is being paralyzed — the main hub of Chinese exports

First of all, Shanghai is a reminder that there are two opposed Chinas. One is ideological, based in Beijing, and continues to confine itself to a “zero Covid” policy already perfectly understood by the rest of the world to be ineffective against the Omicron variant of the virus. The other is pragmatic, symbolized by the municipal authorities who, for two years, have managed to combine safety in public health with economic growth by using highly targeted lockdowns. In favoring the Chinese vaccine, whose effectiveness only appears after the third dose, Beijing has come to a dead end: only 50% of the over-80s, hesitant to be vaccinated for cultural reasons, have had two doses, and only 20% three doses. A whole region is being paralyzed — the main hub of Chinese exports and the main source of Chinese economic growth.

The second message concerns the priority given to ideology and control, to the detriment of economic rationality, that augurs increased detachment from the West. A recent speech by President Xi Jinping to the Boao Forum gave an insight into the Chinese vision of the need for a new world order aimed at restoring “Asia to Asia”. Shanghai, the traditional gateway to Europe for this huge country must fall in line with a three-pronged “de-Westernization”.

The first prong is the “de-democratization” of the world, assisted by the growth of populism and strong inflationary pressures in the West. The second is the “de-NATOization” of the world, which is at the origin of its new “limitless” friendship with Russia. The third is the “de-dollarization” of trade which, initially, could be used in the East for commercial negotiations regarding energy and raw materials. Emblematic of this groundswell is the recent exhortation by the Chinese insurance company Ping An to the HSBC group, of which it is now the largest shareholder, to divide its operations into two geographical areas, removing the Asian section — by far the most profitable part — from the supervision of London.

A period of austerity

The third message is being addressed, not only to Shanghai, but to the whole Chinese population. It is that the “Forty Glorious Years” [a reference to the Trente Glorieuses: thirty years of post-war economic growth in France, from 1945 to 1975] are coming to an end. China is entering a period of austerity, made necessary by the institution of a war economy to combat the American threat. This is an economy that is no longer characterized by growth in demand and which augurs a long-term slowdown in domestic consumption that goes far beyond the logistical disturbances linked to repeated lockdowns.

Quite the opposite of “whatever it costs”, Xi is forcing the population into “whatever it costs you”

Quite the opposite of President Macron’s “whatever it costs”, President Xi is forcing the population into “whatever it costs you”. In short, China will not modernize in order to catch up with the USA without making sacrifices, symbolized in Shanghai by erratic food deliveries to the people in lockdown. In time of war, the future will depend on controlling supply-side economics. This will enable China to hold sway over bottlenecks in global industrial production and be a weapon for Beijing in any future tactical negotiations. With some foresight, Christine Lagarde recently underlined the “significant” dependency of 46% of large German companies on Chinese sub-contractors.

The lockdown in Shanghai is a presage of major changes to come, both in China’s economic growth and in the new world order. There is now little time left for European leaders to understand its full consequences and to adapt to this new situation.

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David Baverez

David Baverez

Business angel / demon. Based in Hong Kong since 2011. Columnist, author of “Paris-PekinExpress”, “Beijing Express” and “Génération Tonique”.