Covid testing in Chaoyang
MERICS China Essentials
14 min read

Covid lockdowns + China-Russia space collaboration + Global Security Initiative


Looming economic fallouts from Covid lockdowns

The past weeks’ Covid-19-lockdown in Shanghai has put the spotlight on the pandemic situation in China. As a major international economic hub, the biggest port in the world and home to leading Chinese chip businesses, the city’s lockdown is causing supply problems within China and across the globe. Plans to put workers in Covid-free “bubbles” in order to restart businesses in the Shanghai area look unlikely to be sufficient. If infections continue to spread and Beijing sticks to its so-called dynamic zero covid strategy, other cities will also have to enforce lockdowns, prolonging global supply-chain shortages. 

The Chinese economy is also under heavy pressure. With millions of people confined to their homes, unemployment rose to 5.8 percent in March, the highest since May 2020, and retail sales fell 3.5 percent, the first decline since July 2020. Production woes, consumers’ belt-tightening, slower wage growth are beginning to cast a pall on Beijing’s ambition to grow the economy 5.5 percent this year. Doubts about China’s economy and its tacit support of Russia in Moscow’s war against Ukraine have seen foreign investors sell Chinese securities at record scale since the beginning of the year. On April 25, China’s benchmark CSI 300 share index fell 4.9 percent, its biggest one-day fall since early 2020.

The measures in Shanghai are causing widespread domestic discontent. Web users have severely criticized the city’s inconsistent and poor communication, logistical challenges hampering food and medicine delivery, and sometimes inhumane circumstances for citizens in quarantine. A video called “Voices of April” (四月之声), a compilation of voice recordings about various untoward events, went viral immediately. Even though censors rapidly attempted to scrub it from the internet, new copies of the video continued to be posted, reaching nearly every corner of the Chinese internet.

Aware of China’s low vaccination rate among elderly citizens and the high death rate during Hong Kong’s recent wave of the Omicron variant, national authorities have increased the pressure on localities to maintain the dynamic clearing strategy. This will force local authorities to take strict measures at even the slightest hint of a new outbreak – the capital, Beijing, included. The city reported 33 new cases on Tuesday April 26, triggering local restrictions, mass testing, and panic buying of supplies as fears of an impending lockdown arose. 

MERICS analysis: “While some regions of the world eliminated remaining Covid restrictions, China is having its worst outbreak since the start of the pandemic. The measures are also being taken in a very different context to that two years ago, when the global economy as a whole was scaling down”, says MERICS Analyst Aya Adachi. “Many economies that rely on Chinese imports are now transitioning to a post-pandemic return to normality. China will likely present them with major supply-chain problems, as a growing number of Chinese cities are in various stages of lockdowns.”

More on the topic: Read the new report by the European Think-tank Network on China (ETNC) on “Dependence in Europe’s relations with China” co-edited by MERICS analyst Francesca Ghiretti. MERICS experts Barbara Pongratz, Bernhard Bartsch and Vincent Brussee contributed the Germany chapter of the report.

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300 million tons

… is the new coal production capacity increase target for 2022, presented by Premier Li Keqiang. This means an increase of 2.2 percent. Shortly after Li's announcement, China's National Energy Agency underscored the message, saying that: “Coal power will still carry an important role in ensuring power supply security for a long time." This fits into the broader trend of prioritizing energy security in the context of the invasion of Ukraine.


China and Russia step up collaboration in space

The facts: Russia and China are drafting a space cooperation program for 2023-2028, according to party-state broadcaster CGTN. The centerpiece will be a joint lunar base that will house astronauts after 2030. A joint mission in 2025 by China’s Chang’e 7 robot lunar mission and Russia’s Luna-26 lunar orbiter will lay the groundwork. Russia may also gain access to China’s space station Tiangong, which will be completed later this year. A deal to further integrate Russian and Chinese satellite navigation systems Glonass and BeiDou was signed in February.    

What to watch: Any announcement on China-Russia space co-operation would be a clear break with Beijing’s official position of neutrality on the Russian invasion of Ukraine. Doing so would close off the possibility of European involvement in Tiangong, BeiDou and other space projects that are envisioned as international success stories. An inflection point will be the Memorandum of Understanding on the joint lunar base that China and Russia are scheduled to sign this year.

MERICS analysis: “As competition with the United States is a major motivation behind China’s ambitious space program, the long-term trend is for China to deepen ties with Russia,” says Jeroen Groenewegen-Lau, MERICS. “To avoid breaking sanctions or upsetting European and other partners, details of Chinese-Russian plans are likely to be kept secret. Europe will need to prepare for the increasing politicization of space.”

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Global Security Initiative: Beijing doubles down on its Russia position and revision of global order

The facts: President Xi Jinping used the occasion of the 2022 Boao Forum for Asia to unveil China’s Global Security Initiative (GSI). Despite its grand name, the GSI announcement did not include new, concrete proposals, but instead solidified China’s vision of future international security and the global order.

China wants to “build a balanced, effective and sustainable security architecture” which would accommodate “the legitimate security concerns of all countries” – the phrase used by Beijing regarding Russia’s demands towards Ukraine. This commitment to Sino-Russian coordination was further underlined by Xi embracing, for the first time, the Kremlin’s concept of “indivisible security”.

Alluding to the economic spillover of Western sanctions on Russia and seeking support from developing countries, Beijing painted its GSI vision as a means for maintaining stability –  necessary for development and economic growth – while presenting itself as a model peace actor and enabler of development.

What to watch: The GSI comes as two broad camps are emerging – those seeking to maintain the current rules-based international order and those trying to change it, with many international actors trying to navigate the space in between.

Prior to the announcement, China signed a security agreement with the Solomon Islands – an Oceania country for which Beijing had previously provided development support. The agreement – not made public so far – would allow the Chinese navy to deploy its military personnel to protect major projects and carry out ship visits and logistical replenishment in the Solomon Islands. The deal sparked considerable pushback from the United States and Australia. In a similar vein, speaking during a trip to India just days after the GSI announcement, EU Commission President Ursula von der Leyen said that attempts to undermine the rules-based international order should be opposed in an indirect criticism of Russia and China and an attempt to influence the position of New Delhi.

MERICS analysis: “The announcement of the GSI marks Beijing’s doubling-down on its revisionist agenda in the global order and an attempt to present its vision as aligned with interests of the developing countries. Although its attention is focused on the Russian war in Ukraine, the EU should not neglect its engagement with the partners from the developing countries and co-shape its Global Gateway initiative with its recipients so that it caters to their needs.” MERICS Analyst Grzegorz Stec.

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Chen Min’er - Propaganda clerk to political star

Chen Min’er could join the ranks of China’s seven most powerful men at the Chinese Communist Party (CCP) Congress at year’s end. The Chongqing Party Secretary and Politburo member has his eyes on a seat on the Politburo’s Standing Committee, which is headed by a man he first worked for 20 years ago, Xi Jinping. After the latter became Zhejiang Party Secretary in 2002, he happily drew on the expertise and experience of the province’s propaganda chief. Chen, for one, helped Xi to write columns under a pen name for the Zhejiang Daily, the province’s party newspaper once presided over by Chen.

From early on, Chen chose to focus on what he knew best to get ahead. Party ideology and political theory were his forte and he put them to good use. After starting out as a propaganda clerk at his alma mater, Shaoxing Teacher’s College, he went on to teach at the local party school, rising through the ranks to become propaganda chief of his home province, Zhejiang. That is how Chen found himself working under Xi, eventually coming to be regarded as one of his most loyal associates – and a possible successor (even if Xi’s striving for a third term as CCP General Secretary makes that point moot for now).

Spurred by Xi’s goal of eradicating rural poverty, Chen initiated policies to lift farmers’ income when he was Guizhou’s Party Secretary from 2013. His political career gained further traction in 2017, when he became Chongqing Party Chief, as a replacement for Sun Zhengcai, who was removed on corruption charges. Despite a lack of experience in central government, Chen has proven to be a loyal and reliable cadre. Armed with administrative experience from Guizhou and Chongqing, Chen ticks all the right boxes for promotion to China’s next but highest office after that of Party General Secretary.  

MERICS China Digest

Berlin stops Chinese takeover of German medical device maker – (Handelsblatt) 

The German government stopped China’s Aeonmed Group from purchasing a German medical device manufacturer, citing public safety concerns. (22/04/27)

China raises status of vocational education (Sixth Tone)

Beijing is abolishing the distinction between high schools and secondary vocational institutions. The revised law, which will go into effect on May 1, also obliges high schools to offer vocational courses. The move is an attempt to improve the public perception of vocational education. (22/04/26)

China ratifies forced labor conventions ahead of visit by UN human rights chief (South China Morning Post)

Beijing has ratified two International Labour Organization (ILO) conventions on forced labor, amid accusations of human rights violations against mostly Uygur workers in the province of Xinjiang. The decision came ahead of next month’s visit by the UN human rights chief Michelle Bachelet. (22/04/20)

Hong Kong's Foreign Correspondents' Club suspends top Asian human rights awards (Reuters)  

Hong Kong's Foreign Correspondents' Club has suspended its annual Human Rights Press Awards that were among the most prestigious in Asia. In an official statement, the club’s president said that the organization wanted to avoid "unintentionally" violating any laws. (22/04/25)