In Shanghai, COVID Rattles the Chinese System

By Peter Zeihan on April 13, 2022

Shanghai – China’s largest city and financial center – has been under a severe lockdown since April 1st as Beijing seeks to contain a runaway outbreak of the Omicron (and Omicron BA.2) variant. Beijing’s dogmatic promotion of the domestically produced Chinese COVID vaccine (and refusal to import foreign-made, more effective mRNA vaccines) has left the Chinese population poorly protected against the coronavirus as we head into the third year of the pandemic.

Incredibly strict lockdowns are the only tool available to Chinese leadership as they continue to pursue a “COVID Zero” policy, but with the most recent variant infections and deaths continue to rise as an overwhelmed health and security apparatus struggles to keep up.

The people of Shanghai, and Hong Kong, and likely soon Beijing are facing extraordinary pressures as hunger and surveillance and fear and censorship take their toll. And the cult of personality that Chinese President Xi Jinping has worked to build over the past decade is squarely in the crosshairs.

The war in Ukraine isn’t doing Xi any favors, either. Beijing is facing a world now where private companies and investors – both critical cogs in China’s economic systems – have been flexing their boycott muscles. Too draconian a response against potential protests risks triggering a massive global economic backlash. And for a country in desperate need of fuel and food imports, Russian supplies face a logistical blockade of limited infrastructure capacity, geographic challenges, and the constant spectre of international sanctions.

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