Eye on China: Covid Special: China’s Recovery – G20 – Trump-Xi Call – EU’s Anger – S. Asia Focus

Eye on China is a weekly bulletin offering news and analysis related to the Middle Kingdom from an Indian interests perspective.

I. Recovery & Restrictions

There are many strands of the Covid-19 story within China, so I am going to just focus on some of the key areas. First, officially, the trend of new cases in China remains positive, with 1 local transmission reported on Thursday. Bulk of the cases reported in the mainland were imported. That’s eventually prompted a decision to essentially ban international flights. Caixin reports that starting from Sunday, all domestic airlines will be limited to flying one international flight per week to each country, the Civil Aviation Administration of China (CAAC) said. Foreign airlines were also ordered to limit their number of flights into China to no more than one per week. Shortly after the CAAC announcement, the Ministry of Foreign Affairs and National Immigration Administration announced that foreign nationals with valid visas or residence permits would be temporarily banned from entering the country, starting Friday. 

Of course, this decision has sparked anger, given that Beijing had spent considerable energy in January and February lambasting countries for imposing travel restrictions.

Second, Xi Jinping on Friday chaired a Politburo meeting to discuss the coronavirus epidemic and the economy. Earlier in the week, he’d met with PSC members. Here are the important takeaways:

  • The meeting underscored focusing on preventing infections influx from abroad and epidemic rebound at home to ensure that the epidemic situation in China keeps moving steadily in a positive direction
  • Major affected regions should continue containment measures and treatment of patients while taking steps to gradually restore people’s normal work and life, and low-risk regions should make it a regular mechanism to swiftly detect, cope with and treat new cases so as to resolutely prevent a resurgence of the outbreak.
  • On economic measures, it said that China will appropriately raise the fiscal deficit ratio, issue special treasury bonds, increase the scale of special bonds for local governments, and guide the interest rate to decline in the loan market.
  • The meeting also underscored financial policies such as reloan and rediscount quotas, as well as deferring repayment of capital with interest, in a bid to provide targeted financial services for epidemic control, work resumption and development of the real economy.

Consumption and trade are likely to be severely strained over the course of the year. Therefore, expect more in terms of major infrastructure projects coming in the future, as Beijing doubles down on investment to drive growth.

Third, a recovery is not just about warding off a second wave, but also about managing social differences, economic fallout and potential instability that it could all bring. For instance, late on Friday reports emerged of violent clashes on a bridge between Hubei province and neighbouring Jiangxi province. The confrontation came after authorities in Jiangxi blocked entry to people from Hubei. On Wednesday, the Hubei government had put out a notice announcing the easing of interprovincial transport restrictions in an “orderly” fashion, with the exception of Wuhan. This Twitter thread has a bunch of the videos of the clashes. Some reports suggest that this had to do with a conflict between police from either province clashing, which snowballed into a larger fight. But it underscores the frustration among the people of Hubei. Again, it’s a region that’s endured much, as evident by this sombre report on the queues outside the Hankou funeral parlour. People had gathered to collect the ashes of their deceased loved ones.

Another aspect of the challenge of recovery is that there is going to be a lot of confusion, with multiple stops and starts, as potential fresh waves of outbreak threaten to erupt. For instance, in the city of Xianning the lockdown has been lifted. But people now realise that they need to pass a new rapid detection test to show they didn’t have the coronavirus. And while people rushed to the city’s largest hospital, the testing capacity there had been exhausted. Another case is of cinemas in China. Over the past week, around 500 theaters across China had attempted to re-open. But on Friday, reports state that the national film bureau has ordered them all shut again amid outbreak fears. Expect these hiccups over the next few weeks, with schools beginning to gradually reopen in different parts of the country. At the moment, this is very, very limited. One of the challenges of doing all this in an orderly manner is the threat of local officials fudging data. This week Li Keqiang chaired the Covid leading group’s meeting, where he warned against “concealing or underreporting.”

Fourth and finally, there’s the international component of China’s policy on the pandemic. Xi’s been working the phone for a while now, as this Global Times graphic shows below.

Also, the China International Development Cooperation Agency said on Thursday that the country had provided anti-virus assistance to 89 countries. Xinhua reported that Chinese medical workers and supplies have been sent to 28 Asian countries, 16 European countries, 26 African countries, nine countries in the Americas and 10 countries in the South Pacific. More on the geopolitics in the subsequent sections.

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