News out of China:
"China’s Communist party remains committed to its “zero-Covid” strategy that aims to isolate every case and eliminate the virus entirely. The government ordered an effective lockdown of several districts of Zhengzhou, with residents of the city centre not allowed to leave unless they have a negative Covid test and permission from authorities. The restrictions, which will last five days, affect more than six million people – about half the city’s population."
The Guardian, Wed. November 23, 2022
Growing protests in China.
It may end up amounting to nothing. Some festering problems go away. Other problems deteriorate below the surface, as described in the famous lines from Ernest Hemingway:
"How did you go bankrupt?"
"Gradually, then suddenly."
It is that way when snow accumulates deeper on a steep mountainside before an avalanche. It was that way with the stock market climbing higher and higher until Black Monday in 1987. I saw it with internet stocks leading up to March of 2000. I saw it with mortgage bonds before 2008. The president of my employer said we would keep dancing to the happy music of easy profits from making bad mortgages until the music stopped. Citigroup nearly destroyed itself and the country with it.
The Chinese government policy of zero tolerance for COVID built up frustration that erupted in protests in Guangzhou, the center of the manufacturing region of China. Foxconn employees, who assemble the Apple I-phone, are protesting their salaries and working conditions, and those protests overlap with the discontent with COVID shutdowns. This week residents broke out of their homes on mass, ignoring the COVID lockdowns.
The discontent spread to Beijing, where signs were put up on an overpass. This is a big deal in China. It isn't done. Perpetrators face long prison sentences for this. One banner read: "Go on strike. Remove dictator and national traitor Xi Jinping."
Headline: "China's COVID cases hit record as dissent grows over tough restrictions"
Another banner posted in China read:
Say no to COVID test, yes to food. No to lockdown, yes to freedom. No to lies, yes to dignity. No to great leader, yes to vote. Don't be a slave, be a citizen.
At the cost of civic unrest, China's COVID lockdown policy was working to keep infection rates low. But now COVID is breaking loose. China, on the far lower right in this chart, is the outlier, with rapid spread underway.
If protests fizzle out, and they might, then it will be another false alarm in a fragile situation. Problems can fester for centuries; societies live with them. Or not. There could be serious consequences from these protests for the U.S. Disruption in China's manufacturing region around the Pearl River Delta will mean supply chain problems for us, making inflation worse, forcing the Fed to tighten further, and hastening and deepening a recession.
If protests grow and their focus moves to Chinese leadership, then they have a crisis of governance. Americans who cheer a defeat of "Chinese communism" may come to regret the government that replaces this one. New governments have a mandate of change, to redress festering grievances. Covid lockdowns are only one of them. There is the Taiwan matter, the matter of settling the score after the Japanese occupation in WW2, the matter of the century of humiliation by Western powers, the matter of India in Kashmir. China may want to express its greatness militarily. Chinese citizens, filled with the elixir of pride and freedom, may insist on it
The spirit of revolution is closer to the surface in China than it is in the U.S. It helps explain why China surveils its citizens and suppresses dissent as closely as it does. China's government fears its citizens more than does ours. China has a lockdown, zero-tolerance mentality on both political dissent and COVID.
Bottling up problems works--until it doesn't. This may become our problem soon.
Reasonable assessment. "Americans who cheer a defeat of "Chinese communism" may come to regret the government that replaces this one." Yikes!