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At a Communist Party congress starting in Beijing on Oct. 16, Xi Jinping is expected to be named to a third five-year term as the country’s top leader, paving the way for him to consolidate power to an extent not seen in decades.
Under Mr. Xi, China has become the world’s dominant manufacturer of everything from cement to solar panels, as well as the main trading partner and dominant lender for most of the developing world. It has built the world’s largest navy, developed some of the world’s most advanced ballistic missiles and constructed air bases on artificial islands strewn across the South China Sea.
in a tailspin. Its property market, which over the last ten years contributed about a quarter of the country’s economic output, is melting down. Foreign investment has faltered. And widespread lockdowns and mass quarantines, part of China’s zero-tolerance approach to Covid-19, have hurt consumer demand and stalled businesses.
At the same time, Mr. Xi has worked to turn China into a more state-led society that often puts national security and ideology before economic growth. He has cracked down on Chinese companies and limited their executives’ power. Some of China’s best-known entrepreneurs have left the country and others, such as Alibaba co-founder Jack Ma, have largely disappeared from public view.
All of this has hurt China’s economy, which was just 0.4 percent larger from April through June than during the same period last year. The growth was far below the government’s initial target for growth of about 5.5 percent this year. For the first year since the 1990s, China’s economic growth is expected to fall below the rest of Asia’s.
at the start of the last party congress, in 2017, lasted more than three hours. But buried in that jargon are likely to be some important messages. Here’s what finance leaders and corporate executives around the world want to know.
Domestic Ideology: ‘Common Prosperity’
One of Mr. Xi’s favorite economic policy initiatives in recent months has a simple, innocuous-sounding name: “common prosperity.” The big question lies in what it means.
Common prosperity, a longtime goal of the Communist Party, has been defined by Mr. Xi as reining in private capital and narrowing China’s huge disparities in wealth. Regulators and tax investigators cracked down last year on tech giants and wealthy celebrities. Beijing demanded that tycoons give back to society. And Mr. Xi has strongly discouraged speculation in housing, pushing instead for government subsidies for the construction of more rental apartments.
A regulatory crackdown on tech companies and after-school education companies contributed to a wave of layoffs that left one in five young Chinese city dwellers unemployed by August. Lending limits on China’s highly inflated housing sector have triggered a nosedive in the number of fresh construction projects being started and a wave of insolvencies among real estate developers. Many Western hedge funds that bet heavily on the real estate developers’ overseas bond issues incurred considerable losses.
The term “common prosperity” was seldom used by top officialslast spring during those setbacks. But Mr. Xi conspicuously revived it during a tour of northeastern China in mid-August. The Politburo subsequently mentioned common prosperity when it announced on Aug. 30 the starting date and agenda for the party congress.
first put forward in May 2020, is a theory of what he calls “dual circulation.” The concept involves relying primarily on domestic demand and innovation to propel the Chinese economy, while maintaining foreign markets and investors as a backup engine for growth.
Mr. Xi has pushed ahead with lavish subsidies to develop Chinese manufacturers, especially of semiconductors. But the slogan has attracted considerable skepticism from foreign investors in China and from foreign governments. They worry that the policy is a recipe for replacing imports with Chinese-made goods.
China’s imports have indeed stagnated this year while its exports have soared, producing the largest trade surpluses the world has ever seen. Those surpluses, not domestic demand, have sustained China’s economic growth this year.
Chinese officials deny that they are trying to discourage imports, and contend that China remains eager to welcome foreign companies and products. When the Politburo scheduled the party congress for Oct. 16, it did not mention dual circulation, so the term might be left aside. If it goes unmentioned, that could be a conciliatory gesture as foreign investment in China is already weakening, mainly because of the country’s draconian pandemic policies.
Pandemic: ‘Covid Zero’
China’s zero-tolerance approach to Covid-19 has prevented a lot of deaths and long-term infections, but at a high and growing cost to the economy. The question now lies in when Mr. Xi will shift to a less restrictive stance toward controlling the virus.
in Tiananmen Square, on the 100th anniversary of the founding of the Chinese Communist Party, when he reiterated China’s claim to Taiwan, a self-ruled island democracy. President Biden has mentioned four times that the United States is prepared to help Taiwan resist aggression. Each time his aides have walked back his comments somewhat, however, emphasizing that the United States retains a policy of “strategic ambiguity” regarding its support for the island.
Even a vague mention by Mr. Xi at the party congress of a timeline for trying to bring Taiwan under the mainland’s political control could damage financial confidence in both Taiwan and the mainland.
The most important task of the ruling elite at the congress is to confirm the party’s leadership.
Particularly important to business is who in the lineup will become the new premier. The premier leads the cabinet but not the military, which is directly under Mr. Xi. The position oversees the finance ministry, commerce ministry and other government agencies that make many crucial decisions affecting banks, insurers and other businesses. Whoever is chosen will not be announced until a separate session of the National People’s Congress next March, but the day after the congress formally ends, members of the new Politburo Standing Committee — the highest body of political power in China — will walk on a stage in order of rank. The order in which the new leadership team walks may make clear who will become premier next year.
a leading hub of entrepreneurship and foreign investment in China. Neither has given many clues about their economic thinking since taking posts in Beijing. Mr. Wang had more of a reputation for pursuing free-market policies while in Guangdong.
Mr. Hu is seen as having a stronger political base than Mr. Wang because he is still young enough, 59, to be a potential successor to Mr. Xi. That political strength could give him the clout to push back a little against Mr. Xi’s recent tendency to lean in favor of greater government and Communist Party control of the private sector.
Precisely because Mr. Hu is young enough to be a possible successor, however, many businesspeople and experts think Mr. Xi is more likely to choose Mr. Wang or a dark horse candidate who poses no potential political threat to him.
In any case, the power of the premier has diminished as Mr. Xi has created a series of Communist Party commissions to draft policies for ministries, including a commission that dictates many financial policies.
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These are among the many battle-style slogans that Beijing has unleashed to rally support around its top-down, zero-tolerance coronavirus policies.
China is now one of the last places on earth trying to eliminate Covid-19, and the Communist Party has relied heavily on propaganda to justify increasingly long lockdowns and burdensome testing requirements that can sometimes lead to three tests a week.
The barrage of messages — online and on television, loudspeakers and social platforms — has become so overbearing that some citizens say it has drowned out their frustrations, downplayed the reality of the country’s tough coronavirus rules and, occasionally, bordered on the absurd.
citywide lockdown in Shanghai this spring, Jason Xue had no more food left in his fridge. Yet when he clicked on the government’s social media account, he noticed that a top city official had vowed to “make every possible endeavor” to address food shortages.
Government assistance didn’t show up until four weeks later, Mr. Xue said.
“I was extremely angry, panicked and despairing,” said Mr. Xue, who works for a financial communications firm. He eventually turned to neighbors for help. “The propaganda was resolute and decisive, but it was different from the reality that we didn’t even know whether we could have the next meal.”
Xi Jinping, China’s leader, has made controlling the virus a “top political priority.” Thousands of state media outlets and social media accounts have echoed Beijing’s “zero Covid” policy and praised the sacrifice of workers trying to control Covid-19.
at least 120 Covid-related propaganda phrases have been created since the beginning of the pandemic.
blocking them from seeking safety.
Videos of the episode were posted online and quickly deleted by censors, who said people should “at least bring masks before escaping from buildings,” even when an earthquake is “highly destructive.”
For some, the video was a reminder of how the government had used the pandemic to tighten its grip on their private lives, telling them when they can leave their apartments, what kind of food they can buy and what hospitals they can enter.
Kong Lingwanyu, a 22-year-old marketing intern in Shanghai, was upset that officials used the phrase “unless necessary” when describing restrictions around things like leaving the home, dining out or gathering with others.
Ms. Kong said a local official responsible for carrying out coronavirus policies had told her that she should not “buy unnecessary food.” She said she asked the official what standards the government used to determine what kind of food was necessary.
“Who are you to decide the ‘necessity’ for others?” she said. “It’s totally absurd and nonsense.”
On state television, Beijing’s “nine storm fortification actions” around the pandemic are frequently repeated to keep people in line with Covid policies. The nine actions are: neighborhood lockdowns, mass testing, contact tracing, disinfection, quarantine centers, increased health care capacity, traditional Chinese medicine, screening of neighborhoods and prevention of local transmission.
Yang Xiao, a 33-year-old cinematographer in Shanghai who was confined to his apartment for two months during a lockdown this year, had grown tired of them all.
“With the Covid control, propaganda and state power expanded and occupied all aspects of our life,” he said in a phone interview. Day after day, Mr. Yang heard loudspeakers in his neighborhood repeatedly broadcasting a notice for P.C.R. testing. He said the announcements had disturbed his sleep at night and woke him up at dawn.
“Our life was dictated and disciplined by propaganda and state power,” he said.
To communicate his frustrations, Mr. Yang selected 600 common Chinese propaganda phrases, such as “core awareness,” “obey the overall situation” and “the supremacy of nationhood.” He gave each phrase a number and then put the numbers into Google’s Random Generator, a program that scrambles data.
He ended up with senseless phrases such as “detect citizens’ life and death line,” “strictly implement functions” and “specialize overall plans without slack.” Then he used a voice program to read the phrases aloud and played the audio on a loudspeaker in his neighborhood.
No one seemed to notice the five minutes of computer-generated nonsense.
When Mr. Yang uploaded a video of the scene online, however, more than 1.3 million people viewed it. Many praised the way he used government language as satire. Chinese propaganda was “too absurd to be criticized using logic,” Mr. Yang said. “I simulated the discourse like a mirror, reflecting its own absurdity.”
Spoofing Chinese propaganda:
His video was taken down by censors.
Mr. Yang added that he hoped to inspire others to speak out against China’s Covid policies and its use of propaganda in the pandemic. He wasn’t the only Shanghai resident to rebel when the city was locked down.
In June, dozens of residents protested against the police and Covid control workers who installed chain-link fences around neighborhood apartments. When a protester was shoved into a police car and taken away, one man shouted: “Freedom! Equality! Justice! Rule of law!” Those words would be familiar to most Chinese citizens: They are commonly cited by state media as core socialist values under Mr. Xi.
After the quake, police and health workers refused to allow anxious residents of apartment buildings out, adding to anger over COVID restrictions.
The death toll in this week’s earthquake in western China has jumped to 74 with another 26 people still missing, the government reported Wednesday, as frustration rose with uncompromising COVID-19 lockdown measures that prevented residents from leaving their buildings after the shaking.
The 6.8 magnitude quake that struck just after noon Monday in Sichuan province caused extensive damage to homes in the Ganze Tibetan Autonomous Region and shook buildings in the provincial capital of Chengdu, whose 21 million citizens are under a strict COVID-19 lockdown.
Following the quake, police and health workers refused to allow anxious residents of apartment buildings out, adding to anger over the government’s strict “zero-COVID policy” mandating lockdowns, quarantines and other restrictions, even while the rest of the world has largely reopened.
Footage circulating online showed residents of the central city of Wuhan, where the pandemic is believed to have originated in late 2019, chanting “lift the lockdown, refuse to be tested” at police.
The restrictions have prompted protests online and in person, rare in China’s tightly controlled society where the all-powerful Communist Party can easily sentence people to months or years in prison on loosely defined charges such as “picking quarrels and provoking trouble.”
In all, 65 million Chinese in 33 cities, including seven provincial capitals, are currently under varying levels of lockdown. The government is also discouraging domestic travel during the Mid-Autumn Festival on Saturday and the weeklong National Holiday at the start of October.
Outbreaks have been reported in 103 cities, the highest since the early days of the pandemic in early 2020.
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Monday’s quake was centered in a mountainous area of Luding county, which sits on the edge of the Tibetan Plateau roughly 125 miles from Chengdu, where tectonic plates grind up against each other.
China’s deadliest earthquake in recent years was a 7.9 magnitude quake in 2008 that killed nearly 90,000 people in Sichuan. The temblor devastated towns, schools and rural communities outside Chengdu, leading to a years-long effort to rebuild with more resistant materials.
School enrollment is down significantly due to many parents homeschooling, and enrolling their children in private schools.
Around the country, some school districts will begin the school year wondering, “where is everybody?”
Daniel Anello is the CEO of Kids For Chicago.
“At least in Illinois, I know many other states, less kids means less resources coming to your district,” said Anello.
Enrollment is down for public elementary schools. An analysis of last year’s enrollment by AP and Chalkbeat found one in three Chicago schools now have fewer than 300 students. LA, New York and Boston are seeing similar trends in empty desks.
Shrinking enrollment may force some districts in places like Denver, Indianapolis, and Kansas City, Missouri to close schools entirely. The Dickinson family in Wheaton, Illinois says they were hesitant to pull their daughter out of school.
“The idea of taking Caroline out of school was frightening, but the idea of keeping her in the school, the way it was going with the just lack of, what’s the wording — the lack of communication, consistency, the way it was run, it was just like months wasted,” said Sarah Dickinson.
They started home schooling when the pandemic hit; now they want to stick with it.
“It’s been consistent, it’s been rigorous, she’s excelled and we couldn’t be happier,” said Dorian Dickinson.
While the pandemic may have contributed to the decline in traditional public school enrollment, there’s more to this story.
“COVID has had an impact in some places, but those are those are micro impacts compared to the fact that we just as a country have a lot less babies that are growing up to be students,” said Anello.
Kids First Chicago has studied the schools’ slowdown. They say particularly in Chicago, enrollment declines are driven by the slowing growth of Latino families and a steady exodus of Black families out of the city.
Another contributing factor is that kids just aren’t showing up, because of quarantines or other causes. 50% of students in LA were considered chronically absent.
Hedy Chang is the executive director of Attendance Works.
“Chronic absenteeism has at least doubled nationwide. In some places, it’s increased even higher because there’s a lot of local variation,” said Chang.
Chang says they define chronic absenteeism as missing 10% of school. Now they’re seeing students miss as much as 50% or more of school.
“If you’re looking at signs, you start to see it happening. And chronic absence is an early warning sign that kids might not re-enroll the following year,” said Chang.
Like so many, Chang is looking for a solution.
“To keep kids in school, to keep kids staying connected, you really need to take what we call a tiered support that invests in prevention,” she said.
Experts say growth is possible when families see schools as a place of community beyond the school day: A resource not just for education, but also for food and healthcare.
China’s entrepreneur class is grappling with the worst economic slump in decades as the government’s zero Covid policy has shut down cities and kept would-be customers at home. Yet they can’t seem to agree on how loudly they should complain — or even whether they should at all.
A tech entrepreneur wrote in a big group chat in May that many members were too critical. “What people here do every day is criticizing the government and the system,” she wrote. “I can’t see any entrepreneurship in this.”
A top venture capitalist told his nearly nine million social media followers that as much as everyone had suffered from the pandemic, they should try to stay away from negative news and information.
zero Covid policy, which has put hundreds of millions of people under some kind of lockdowns in the past few months, costing jobs and revenues. He’s saying what many others are whispering in private but fear to say in public.
“The questions we should ask ourselves are,” he wrote in an article that was censored within an hour of posting but shared widely in other formats, “what caused such widespread negative sentiment across the society? Who should be responsible for this? And how can we change it?”
He said the lockdowns in Shanghai and other cities made it clear that wealth and social status meant little to a government determined to pursue its zero Covid policy. “We’re all nobodies who could be sent to the quarantine camps, and our homes could be broken into,” he wrote. “If we still choose to adapt to and put up with this, all of us will face the same destiny: trapped.”
staying out of politics is no longer an option for China’s business leaders. But some of his peers are reluctant, given the potential penalties.
steered away from the market economy and cracked down on some industries. It demonized entrepreneurs and went after some of the most prominent of them. Then when the mild, albeit contagious, Omicron variant of the coronavirus emerged in China this year, the government meddled with free enterprise as it hadn’t in decades.
The lockdowns and restrictions have done so much damage to the economy that Premier Li Keqiang summoned about 100,000 cadres to an emergency meeting in late May. He called the situation “severe” and “urgent,” citing sharp drops in employment, industrial production, electricity consumption and freight traffic.
Many business leaders believe that it will be hard to reverse the damage if the government doesn’t stop the zero Covid policy. Yet they feel that there’s nothing they can do to make Beijing change course.
The chairman of a big internet company told me that with all the pandemic restrictions, he and others were operating as if dancing with shackles on while expecting the sword of a lockdown to strike at any moment. With a big public company to run, he said, it would be too risky to be vocal. He hoped the economists could be more outspoken.
The chairman of a publicly listed conglomerate with many consumer-facing businesses said he had to shut down a few of his companies and let people go as revenues dropped off a cliff. He’s not a Christian, he said, but he has been praying to God every day to help him get through this tough period.
articles that compared the pros and cons of different pandemic policies. Then, in mid-May, his social media Weibo account was suspended.
Jack Ma, the founder of the e-commerce behemoth Alibaba, largely disappeared from public view after he criticized banking regulators in late 2019. The regulators quashed the initial public offering of Ant Group, the tech and financial company controlled by Mr. Ma, and fined Alibaba a record $2.8 billion last year.
Ren Zhiqiang, a retired real estate developer, was sentenced to 18 years in prison on charges of committing graft, taking bribes, misusing public funds and abusing his power. His real crime, his supporters say, was criticizing Mr. Xi’s handling of the coronavirus outbreak in early 2020.
Mr. Zhou, 49, is known as a maverick in Chinese business circles. He founded his first business in stereo systems with his brother in the mid-1990s when he was still in college. In 2010, he started Yongche, one of the first ride-hailing companies.
Unlike most Chinese bosses, he didn’t demand that his employees work overtime, and he didn’t like liquor-filled business meals. He turned down hundreds of millions of dollars in funding and refused to participate in subsidy wars because doing so didn’t make economic sense. He ended up losing out to his more aggressive competitor Didi.
He later wrote a best seller about his failure and became a partner at a venture capital firm in Beijing. In April, he was named chairman of the ride-sharing company Caocao, a subsidiary of auto manufacturing giant Geely Auto Group.
A Chinese citizen with his family in Canada, Mr. Zhou said in an interview that in the past many wealthy Chinese people like him would move their families and some of their assets abroad but work in China because there were more opportunities.
Now, some of the top talent are trying to move their businesses out of the country, too. It doesn’t bode well for China’s future, he said.
“Entrepreneurs have good survivor’s instinct,” he said. “Now they’re forced to look beyond China.” He coined a term — “passive globalization” — based on his discussions with other entrepreneurs. “Many of us are starting to take such actions,” he said.
The prospect depressed him. China used to be the best market in the world: big, vibrant, full of ambitious entrepreneurs and hungry workers, he said, but the senseless and destructive zero Covid policy and the business crackdowns have forced many of them to think twice.
“Even if your company is a so-called giant, we’re all nobodies in front of the bigger force,” he said. “A whiff of wind could crush us.”
All the business leaders I spoke to said they were reluctant to make long-term investment in China and fearful that they and their companies could become the next victim of the government’s iron fist. They’re focusing on their international operations if they have them or seeking opportunities abroad.
Mr. Zhou left for Vancouver, British Columbia, in a hurry in late April when Beijing was locking down many neighborhoods. Then he wrote the article, urging his peers to try to speak up and change their powerless status.
He said he understood the fear and the pressure they faced. “Honestly speaking, I’m scared, too.” But he would probably regret it more if he did nothing. “Our country can’t go on like this,” he said. “We can’t allow it to deteriorate like this.”
In recent years, a few of Mr. Zhou’s articles and social media accounts have been deleted. His outspokenness has caused uneasiness among his friends, he said. Some have told him to shut up because it didn’t change anything and was creating unnecessary risks for himself, his family, his companies and the stakeholders in his businesses.
But Mr. Zhou can’t help himself. He’s worried that China could become more like it was under Mao: impoverished and repressive. His generation of entrepreneurs owes much of their success to China’s reform and opening up policies, he said. They have the responsibilities to initiate change instead of waiting for a free ride.
Maybe they can start by speaking up, even if just a little bit.
“Any change starts with disagreement and disobedience,” he said.
After the city locked down its 25 million residents and grounded most delivery services in early April, many people encountered problems sourcing food, regardless of their socioeconomic status. Some set alarms for the different restocking times of grocery delivery apps that start as early as 6 a.m.
In the past few days, a hot topic in WeChat groups has been whether sprouted potatoes were safe to eat, a few Shanghai residents told me. Neighbors resorted to a barter system to exchange, say, a cabbage for a bottle of soy sauce. Coca-Cola is hard currency.
After nearly two weeks under lockdown, Dai Xin, a restaurant owner, is running out of food to provide for her household of four. Now she slices ginger paper thin, pickles vegetables so they won’t spoil and eats two meals a day instead of three.
Even the moneyed class is facing food supply shortages. The head of a big retailer told me last week that she got many requests from Shanghai-based chief executives. But there was little she could do under lockdown rules, the executive said, who spoke on the condition of anonymity given the political sensitivities.
Wang Lixiong, the author of the apocalyptic novel “China Tidal Wave,” which ended with a great famine in the aftermath of a nuclear winter, believes that a man-made crisis like the one in Shanghai is inevitable under China’s authoritarian system. In recent years, he said in an interview, the risk increased after Beijing clamped down on nearly every aspect of civil society.
After moving into a friend’s vacant apartment in Shanghai last winter, he stocked up on rice, noodles, canned food and whiskey to sustain him for a few months in case of a crisis.
But many residents in the luxury apartment complex, with units valued at more than $3 million, weren’t as prepared when the lockdown started. He saw his neighbors, who dashed around in designer suits a month ago, venture into the complex’s lush garden to dig up bamboo shoots for a meal.
The police had warned Xie Yang, a human rights lawyer, not to go to Shanghai to visit the mother of a dissident. He went to the airport anyway.
His phone’s health code app — a digital pass indicating possible exposure to the coronavirus — was green, which meant he could travel. His home city, Changsha, had no Covid-19 cases, and he had not left in weeks.
Then his app turned red, flagging him as high risk. Airport security tried to put him in quarantine, but he resisted. Mr. Xie accused the authorities of meddling with his health code to bar him from traveling.
model of secure order, in contrast to the “chaos of the West.” In the two years since officials isolated the city of Wuhan in the first lockdown of the pandemic, the Chinese government has honed its powers to track and corral people, backed by upgraded technology, armies of neighborhood workers and broad public support.
zero Covid” approach has helped keep infections low, while the death toll continues to grow in the United States and elsewhere. But Chinese officials have at times been severe, isolating young children from their parents or jailing people deemed to have broken containment rules.
City officials did not respond to questions about assertions by Mr. Xie, the lawyer. While it is hard to know what goes on in individual cases, the government itself has signaled it wants to use these technologies in other ways.
Officials have used pandemic health monitoring systems to flush out fugitives. Some fugitives have been tracked down by their health codes. Others who avoided the apps have found life so difficult that they have surrendered.
health code. Residents sign up for the system by submitting their personal information in one of a range of apps. The health code is essentially required, because without it, people cannot enter buildings, restaurants or even parks. Before the pandemic, China already had a vast ability to track people using location data from cellphones; now, that monitoring is far more expansive.
expanded their definition of close contact to include people whose cellphone signals were recorded within as much as half a mile of an infected person.
The party’s experiment in using data to control the flow of people has helped keep Covid at bay. Now these same tools potentially give officials greater power to manage other challenges.
as a model for how China can use technology to address social problems.
Since 2020, Hangzhou has also used video cameras on streets to check whether residents are wearing masks. One district monitored home power consumption to check whether residents were sticking to quarantine orders. The central city of Luoyang installed sensors on the doors of residents quarantining at home, in order to notify officials if they were opened.
crashed twice in two weeks,disrupting the lives of residents who had to update their apps each day with proof that they had taken Covid tests.
By focusing on technology and surveillance, Chinese officials may be neglecting other ways of protecting lives, such as expanding participation in public health programs, wrote Chen Yun, a scholar at Fudan University in Shanghai, in a recent assessment of China’s response to Covid.
state media — roughly one in every 250 adults. Under the grid management system, cities, villages and towns are divided into sections, sometimes of just a few blocks, which are then assigned to individual workers.
During normal times, their duties included pulling weeds, mediating disputes and keeping an eye on potential troublemakers.
Amid the pandemic, those duties mushroomed.
take out their trash.
They also were given powerful new tools.
The central government has directed the police, as well as internet and telephone companies, to share information about residents’ travel history with community workers so that the workers can decide whether residents are considered high-risk.
a woman who was eight months pregnant because her Covid test result had expired hours earlier. She lost the baby, an episode that inspired widespread public fury. But some blamed the heavy burden placed upon low-level workers to stamp out infections.
The Coronavirus Pandemic: Key Things to Know
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“In their view, it’s always preferable to go too far than be too soft-handed, but that’s the pressure created by the environment nowadays,” Li Naitang, a retired worker in Xi’an, said of local officials.
Still, for defenders of China’s stringent measures, the results are undeniable. The country has recorded only 3.3 coronavirus deaths per million residents, compared to about 2,600 per million in the United States. In mid-January, Xi’an officials announced zero new infections; this past week, the lockdown was lifted entirely.
‘You’ll never be lost’
The government’s success in limiting infections means its strategy has earned something that has proved elusive in many other countries: widespread support.
published an analysis of each province’s criteria for a health code to turn from green to yellow. It concluded that, for most provinces, the answer was unclear.
“You never know if your planned itinerary will be canceled, or if your travel plans can be realized,” the article said.
local news report. Eighteen summonses were successfully delivered as a result.
Local governments across China have sought to assure people that their health code data will not be abused. The central government has also issued regulations promising data privacy. But many Chinese people assume that the authorities can acquire whatever information they want, no matter the rules.
Zan Aizong, a former journalist in Hangzhou, says the expansion of surveillance could make it even easier for the authorities to break up dissenters’ activities. He has refused to use the health code, but it means moving around is difficult, and he finds it hard to explain his reasoning to workers at checkpoints.
“I can’t tell them the truth — that I’m resisting the health code over surveillance,” he said, “because if I mentioned resistance, they’d think that was ridiculous.”
Joy Dong, Liu Yi and Li You contributed reporting and research.
NUREMBERG, Germany — Maria Liebermann came wrapped in fairy lights and waved a peace flag featuring a white dove. Martin Schmidt carried a Germany flag with the word RESIST scrawled across it in capital letters.
She is a self-described “eco-leftist.” He votes for the far-right Alternative for Germany. They disagree on everything from immigration to climate change, but on a recent Monday they marched side by side against the prospect of a general Covid vaccine mandate, shouting “Freedom!”
At the start of the pandemic, Germany was widely lauded as a model of unity in combating the coronavirus. A general trust in government encouraged citizens to comply with lockdowns, mask guidance and social distancing restrictions.
But that confidence in the authorities has steadily waned as the pandemic enters its third year and the fight has shifted toward vaccines, exposing deep rifts in German society and setting back efforts to combat Covid cases.
death threats from vaccine opponents in recent weeks.
In western Germany, the picture is more complicated.
A well-established tradition of homeopathy and natural cures has meant that a certain distrust of science and medicine has long been widely accepted in Germany’s middle class. Homeopathic doctors are commonplace, their services reimbursed by public health insurers. Germany’s new age esoteric industry — books, crystals, courses and the like — brings in an estimated 20 billion euros in revenue a year. Bavaria has the highest number of certified healers in the country.
unlikely coalition of protesters that includes naturalists, neo-Nazis and ordinary citizens alike. In China, authorities said that the 13 million residents in Xi’an will be allowed to travel in and out of the city, ending a 32-day lockdown.
Sophia, a 22-year-old who described herself as an “energetic healer,” and who was chatting to friends about an hour before the Nuremberg march, lamented the lack of opposition coming from parties on the left like the Greens that had traditionally challenged the status quo.
“Now they’re all backing the vaccine mandate,” she said. In the recent German election, Sophia, who declined to give her last name, supported the Basis party, a newly founded anti-vax party that garnered less than 3 percent of the vote.
Sophia comes from a family of doctors, and both her parents and her older brother got fully vaccinated and have urged her to do the same. But she is concerned that the vaccine was developed too fast, and doesn’t trust the government to disclose any serious side effects.
“My body is telling me that this is not a good idea,” she said. “I have a pretty good connection to my body.”
Her friends concurred. “It’s not about keeping us healthy, it’s about giving us all a QR code,” said Stefan, a 35-year-old father of five who advocates civil disobedience and also did not want his full name used. “They rule with fear. It’s a kind of tyranny.”
“Mainstream science is a religion,” he added.
Distrust in “mainstream science,” and mainstream politics, is one thing esoterics and the far right can agree on, said Mr. Grande of the WZB.
“The common denominator is distrust,” he said. “What unites these two very different groups is an alienation from traditional parties, from science, from media.”
Mr. Grande said the high levels of trust in government shown by Germans early in the pandemic, when nine in 10 backed the coronavirus restrictions, began to erode after the first lockdown as weariness with the pandemic set in.
The danger now, Mr. Grande said, is that the weekly contact with the far right on the streets normalizes that group for those who belong to what he calls “the distrustful center.” Both camps share a belief in conspiracy theories, which have the power to radicalize the movement beyond the fringes.
The vaccine mandate, which will be debated in parliament at the end of the month, is the decisive driver of the protests. “The debate about vaccine mandate is oil into the fire of the radicalization,” Mr. Grande said.
“I fear we have a difficult political phase ahead of us in this pandemic,” he said.
WASHINGTON — Companies are bracing for another round of potentially debilitating supply chain disruptions as China, home to about a third of global manufacturing, imposes sweeping lockdowns in an attempt to keep the Omicron variant at bay.
The measures have already confined tens of millions of people to their homes in several Chinese cities and contributed to a suspension of connecting flights through Hong Kong from much of the world for the next month. At least 20 million people, or about 1.5 percent of China’s population, are in lockdown, mostly in the city of Xi’an in western China and in Henan Province in north-central China.
The country’s zero-tolerance policy has manufacturers — already on edge from spending the past two years dealing with crippling supply chain woes — worried about another round of shutdowns at Chinese factories and ports. Additional disruptions to the global supply chain would come at a particularly fraught moment for companies, which are struggling with rising prices for raw materials and shipping along with extended delivery times and worker shortages.
China used lockdowns, contact tracing and quarantines to halt the spread of the coronavirus nearly two years ago after its initial emergence in Wuhan. These tactics have been highly effective, but the extreme transmissibility of the Omicron variant poses the biggest test yet of China’s system.
Volkswagen and Toyota announced last week that they would temporarily suspend operations in Tianjin because of lockdowns.
Analysts warn that many industries could face disruptions in the flow of goods as China tries to stamp out any coronavirus infections ahead of the Winter Olympics, which will be held in Beijing next month. On Saturday, Beijing officials reported the city’s first case of the Omicron variant, prompting the authorities to lock down the infected person’s residential compound and workplace.
If extensive lockdowns become more widespread in China, their effects on supply chains could be felt across the United States. Major new disruptions could depress consumer confidence and exacerbate inflation, which is already at a 40-year high, posing challenges for the Biden administration and the Federal Reserve.
“Will the Chinese be able to control it or not I think is a really important question,” said Craig Allen, the president of the U.S.-China Business Council. “If they’re going to have to begin closing down port cities, you’re going to have additional supply chain disruptions.”
thrown the global delivery system out of whack. Transportation costs have skyrocketed, and ports and warehouses have experienced pileups of products waiting to be shipped or driven elsewhere while other parts of the supply chain are stymied by shortages.
Understand the Supply Chain Crisis
For the 2021 holiday season, customers largely circumvented those challenges by ordering early. High shipping prices began to ease after the holiday rush, and some analysts speculated that next month’s Lunar New Year, when many Chinese factories will idle, might be a moment for ports, warehouses and trucking companies to catch up on moving backlogged orders and allow global supply chains to return to normal.
But the spread of the Omicron variant is foiling hopes for a fast recovery, highlighting not only how much America depends on Chinese goods, but also how fragile the supply chain remains within the United States.
American trucking companies and warehouses, already short of workers, are losing more of their employees to sickness and quarantines. Weather disruptions are leading to empty shelves in American supermarkets. Delivery times for products shipped from Chinese factories to the West Coast of the United States are as long as ever — stretching to a record high of 113 days in early January, according to Flexport, a logistics firm. That was up from fewer than 50 days at the beginning of 2019.
The Biden administration has undertaken a series of moves to try to alleviate bottlenecks both in the United States and abroad, including devoting $17 billion to improving American ports as part of the new infrastructure law. Major U.S. ports are handling more cargo than ever before and working through their backlog of containers — in part because ports have threatened additional fees for containers that sit too long in their yards.
Yet those greater efficiencies have been undercut by continuing problems at other stages of the supply chain, including a shortage of truckers and warehouse workers to move the goods to their final destination. A push to make the Port of Los Angeles operate 24/7, which was the centerpiece of the Biden administration’s efforts to address supply chain issues this fall, has still seen few trucks showing up for overnight pickups, according to port officials, and cargo ships are still waiting for weeks outside West Coast ports for their turn for a berth to dock in.
work slowdowns and shipping delays.
“If you have four closed doors to get through and one of them opens up, that doesn’t necessarily mean quick passage,” said Phil Levy, the chief economist at Flexport. “We should not delude ourselves that if our ports become 10 percent more efficient, we’ve solved the whole problem.”
Chris Netram, the managing vice president for tax and domestic economic policy at the National Association of Manufacturers, which represents 14,000 companies, said that American businesses had seen a succession of supply chain problems since the beginning of the pandemic.
“Right now, we are at the tail end of one flavor of those challenges, the port snarls,” he said, adding that Chinese lockdowns could be “the next flavor of this.”
Manufacturers are watching carefully to see whether more factories and ports in China might be forced to shutter if Omicron spreads in the coming weeks.
Neither Xi’an nor Henan Province, the site of China’s most expansive lockdowns, has an economy heavily reliant on exports, although Xi’an does produce some semiconductors, including for Samsung and Micron Technology, as well as commercial aircraft components.
How the Supply Chain Crisis Unfolded
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The pandemic sparked the problem. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis can be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
A reduction in shipping. With fewer goods being made and fewer people with paychecks to spend at the start of the pandemic, manufacturers and shipping companies assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.
Demand for protective gear spiked. In early 2020, the entire planet suddenly needed surgical masks and gowns. Most of these goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear around the globe.
Then, a shipping container shortage. Shipping containers piled up in many parts of the world after they were emptied. The result was a shortage of containers in the one country that needed them the most: China, where factories would begin pumping out goods in record volumes
Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.
Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the availability of shipping containers, and the cost of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.
Handel Jones, the chief executive of International Business Strategies, a chip consultancy, said the impact on Samsung and Micron would be limited, but he expressed worries about the potential for broader lockdowns in cities like Tianjin or Shanghai.
stay away from any vehicle collisions involving Olympic participants, to avoid infection.
Last year, terminal shutdowns in and around Ningbo and Shenzhen, respectively the world’s third- and fourth-largest container ports by volume, led to congestion and delays, and caused some ships to reroute to other ports.
But if the coronavirus does manage to enter a big port again, the effects could quickly be felt in the United States. “If one of the big container terminals goes into lockdown,” Mr. Huxley said, “it doesn’t take long for a big backlog to develop.”
Airfreight could also become more expensive and harder to obtain in the coming weeks as China has canceled dozens of flights to clamp down on another potential vector of infection. That could especially affect consumer electronics companies, which tend to ship high-value goods by air.
For American companies, the prospect of further supply chain troubles means there may be another scramble to secure Chinese-made products ahead of potential closures.
Lisa Williams, the chief executive of the World of EPI, a company that makes multicultural dolls, said the supply chain issues were putting pressure on companies like hers to get products on the shelves faster than ever, with retailers asking for goods for the fall to be shipped as early as May.
Dr. Williams, who was an academic specializing in logistics before she started her company, said an increase in the price of petroleum and other raw materials had pushed up the cost of the materials her company uses to make dolls, including plastic accessories, fibers for hair, fabrics for clothing and plastic for the dolls themselves. Her company has turned to far more expensive airfreight to get some shipments to the United States faster, further cutting into the firm’s margins.
“Everything is being moved up because everyone is anticipating the delay with supply chains,” she said. “So that compresses everything. It compresses the creativity, it compresses the amount of time we have to think through innovations we want to do.”
Ana Swanson reported from Washington, and Keith Bradsher from Beijing.