China’s leaders refuse to take Covid ‘lying flat’

In the US and Europe, the phrase “living with the virus” refers to reopening the economy and trusting that vaccines work. Not in China. In the public discourse, that would be tantamount to “lie flat,” a catchphrase for encouraging inaction — an approach that has grown so popular that it drew a condemnation from President Xi Jinping last year.
The “lie flat” philosophy proposes doing the bare minimum to get by — and China is having none of it. Local governments have taken the offensive to contain outbreaks of the hyper-infectious omicron variant. To them, doing nothing is scarier than Covid.
Consider Shanghai, the economic hub with a population of 25 million that has been at a standstill since late March. Its case numbers have been growing exponentially, and almost all are asymptomatic. But city leaders aren’t willing to let the virus run its course — even as residents’ patience wears thin.
“We must dare to draw our swords and fight,” the top party branch in Shanghai wrote to members, the same day the number of new cases in the city rose to more than 19,900.
The government thinks it still has a narrow window to contain the virus after building capacity for the past two years. The city has figured out how to process 4 million PCR tests daily, and since it samples roughly one out of every 10 swabs, Shanghai, in theory, can test its residents every day. Meanwhile, Shanghai is rapidly expanding space to quarantine those who test positive. In recent days, it converted two big exhibition halls into makeshift hospitals, and will almost double its capacity to about 77,700 beds. Officials are also looking at tapping state-owned hotels and entertainment venues in the future.
By now, cities accounting for a quarter of China’s gross domestic product are under some form of movement restrictions, estimates Goldman Sachs Group Inc. For instance, Chengdu, a commercial hub in the southwest, requires travelers from Shanghai to home quarantine for seven days. No locality wants to be seen to be “losing face,” like Hong Kong, which is largely portrayed by Chinese media as having thrown in the towel too quickly.
Where does this leave investors? So far, China has largely maintained its industrial production and its pivotal role in the global supply chain — thanks largely to a so-called closed-loop system, where factory workers are locked in their workplaces and sleep in makeshift dormitories. And it’s not just factories — trading floors are filled with sleeping bags with staff spending all their time in the offices to keep operations running.

—Bloomberg