Frontline Focuses on 'Quarantine' Ahead of 20th Party Congress in October
"Li Keqiang Is Assigned an Almost Impossible Task"
[Asia Economy Reporter Kim Hyunjung] 'Zero-COVID or Economic Recovery.'
Bloomberg reported on the 26th (local time) that confusion among local governments is intensifying as Chinese President Xi Jinping's call for 'Zero-COVID as the top priority' clashes with Premier Li Keqiang's demand for 'economic recovery.' Some economic indicators have worsened compared to the early pandemic in 2020, making frontline efforts for economic stimulus urgent, but it is difficult to neglect quarantine measures while under the Party's control.
The report stated, "Many local government officials implementing policies on the ground are confused about whose orders to follow." Citing the words of eight senior local government officials and financial bureaucrats who requested anonymity, it emphasized, "Premier Li continuously calls for economic stimulus and revitalization, but on the ground, they are required to reduce COVID-19 cases to 'zero (0),' creating a dilemma where fulfilling this demand leads to (economic activity) 'paralysis.'"
This dilemma becomes even more complicated as President Xi is set to secure a third term at the 20th National Congress of the Communist Party (Party Congress) this October. The surest way to climb the ladder during the major cadre reshuffle process starts with avoiding quarantine failures. Earlier, in Beijing, where COVID-19 is spreading, the Postmaster General and others recently received warnings and other punishments from the Central Commission for Discipline Inspection for negligence in virus prevention management. It is estimated that over 1,000 officials have been dismissed or disciplined for quarantine failures since the outbreak began in 2020.
The report also noted that among the senior officials interviewed, four still prioritize controlling the COVID-19 outbreak as their top goal. Considering that no other achievements are recognized if the epidemic is not suppressed, opportunities to launch economic projects emphasized by Premier Li are limited. It also mentioned that many officials did not attend the online meeting with local government officials held by Premier Li on the 25th. Quoting one official, the report said, "Many senior Communist Party officials in cities were so focused on COVID-19 control that they could not even attend the meeting that day."
Travis McAver, co-founder of consulting firm Trivium China, analyzed that while Premier Li did not criticize the Zero-COVID policy or propose a policy shift, he showed 'clear' frustration over local governments hesitating to implement previously announced economic stimulus measures. McAver explained, "Premier Li is tasked with the impossible mission of trying to revive the economy without being able to adjust the one policy (Zero-COVID) that is causing the most damage to the economy."
On the other hand, the market views Premier Li's remarks as more candid and more effective in diagnosing and forecasting the market. J?rg Wuttke, President of the European Union Chamber of Commerce in China, who attended a trade committee event in Beijing earlier this month, mentioned that Premier Li approached him to ask about his well-being and requested a conversation, describing him as "awake." James Sullivan, Head of Asia-Pacific Equity Research at JP Morgan, stated, "Premier Li's speech played a very important role in adjusting expectations to be more realistic."
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