China’s Xi Jinping calls for sticking to zero-Covid policy

On May 6, 2022

Xi Jinping seen giving a speech during the centenary of the founding of the Chinese Communist Party, in Fuyang on July 1, 2021. From a political perspective, 2022 is a particularly critical year for China, as Xi is expected to gain an unprecedented third term this fall at the 20th National Party Congress, alongside a shuffle in officials around him.

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BEIJING — Chinese President Xi Jinping headed a meeting of top leaders on Thursday that emphasized the country should stick to its “dynamic zero-Covid” policy, and warned that economic consequences would follow if it doesn’t, according to state media.

The officials called on the country to unify behind the Chinese Communist Party central committee’s decisions, and “resolutely fight” against all questioning of virus control policies, state media said.

The leaders at Thursday’s meeting were the central committee’s Politburo standing committee — a close group of officials around Xi. Last Friday, the broader Politburo held a regular meeting that upheld the zero-Covid policy, while calling for support for the economic growth target.

The last time Xi held a meeting of the standing committee about the virus in March, the readout mentioned how control measures should reduce the impact on the economy as much as possible, said Ting Lu, chief China economist at the Japanese investment bank Nomura.

References to balancing such a policy with economic growth weren’t included in the latest meeting’s readout, he said.

Thursday’s meeting discussed how relaxing virus prevention and control measures would lead to large-scale infections, serious illness and death, while the economy and the safety and health of people would be seriously affected.

“We have won the battle to defend Wuhan, and can certainly win the battle to defend Shanghai,” read the official Chinese-language meeting readout, translated by CNBC.

The comments should be taken in the context of last Friday’s Politburo meeting, and seen more as an attempt to unify the country around the zero-Covid policy, said Bruce Pang, head of macro and strategy research at China Renaissance, a fund manager and investment bank. “Investors should not overinterpret or ignore either of them.”

News of the meeting comes as the country continues to face its worst Covid outbreak since early 2020. The capital city of Beijing, the southeastern metropolis of Shanghai, and several smaller cities have suspended much local business and imposed travel restrictions, prompting investment banks to cut expectations for growth.

China’s Center for Disease Control and Prevention published a study in November that said shifting to the “coexistence” strategy of other countries would likely result in hundreds of thousands of daily cases and devastate the national medical system.

“For us the critical point is really how willing they will want to be to try to implement the zero-Covid policy in a more practical manner,” said Hong Kong-based Pierre Hoebrechts,…