Ukraine and Omicron: Setbacks for China – Commentary – Economy

Bombs are falling in Ukraine, millions are fleeing Russian troops, and what is the Chinese foreign minister doing? He received his counterpart from Moscow and said: Chinese-Russian relations have “passed new tests” since the beginning of the year and are moving “in the right direction,” says China’s chief diplomat Wang Yi. How should one deal with this China in the future, which sees an aggressive war as a step in the “right direction”, but which is also the key country for German industry?

It’s been three years since the EU heads of state and government met in Brussels for an “exchange of ideas on the entire relationship with China”. The analysis then is just as correct as it is today: the EU and China have become rivals. Chinese companies are rushing to Europe, buying in, subsidized by their state. Beijing is preparing to carry its model out into the world. There is the new Silk Road, the pet project of state and party leader Xi Jinping. The infrastructure program secures billions in orders for Chinese companies in particular and drives entire countries first into financial and then into political dependence on Beijing. China also created its own structures: in Europe, the “16 + 1” mechanism. Eleven EU members are taking part, as are five Balkan countries. The seventeenth member is the People’s Republic itself. A pompous summit was held once a year, and Beijing promised cheap loans – for infrastructure projects.

The Chinese leadership understood very well how the EU works and how to divide Europeans. Instead of going to Brussels, Beijing’s emissaries approach individual member states directly, lured to Budapest or Athens. And those who don’t show signs have to be prepared for frosty relations, such as Lithuania, which allowed the government in Taiwan to write “Taiwan” instead of “Taipei” on the door sign of the representation in Vilnius.

The government falls victim to its zero-Covid strategy

One of the most quoted Chinese proverbs is, “Kill the chicken to scare the monkey.” The key in dealing with China lies in Russia policy. The unity of the Europeans in recent weeks has left a lasting impression on the Chinese apparatus. The basic assumption in Beijing was: the West is decadent, the days are numbered. But those Europeans who are labeled incapable of acting suddenly decide to sanction the Russian central bank. Much of the foreign exchange reserves are now frozen due to a single decree. In Beijing, people start to ponder whether it makes sense to have parked more than $1,000 billion in American government bonds.

Especially since the invasion of Ukraine could not have caught the Chinese leadership at a worse time. Just a few days after the outbreak of war, China’s Prime Minister Li Keqiang announced the growth target for 2022 at the annual People’s Congress in early March. The announcement from Beijing is: 5.5 percent. Even without war and Corona, that would be a very daring target. But now Shanghai, the largest and richest city in the People’s Republic, is in lockdown, the streets of the metropolis have been swept empty, like in Wuhan. And also in the north of the country omicron is preparing. Works stand still, ports close. Retail chains threaten to tear.

The Chinese leadership is trapped in its own zero-Covid strategy. For two years, the apparatus proclaimed: China is the only country in the world that has this insidious virus under control. While Europe and the United States cough, fever and die, life in China goes on as before. And now? If the government lets the virus run free, millions of Chinese will fall ill, who may not be adequately protected because the authorities in Beijing have not yet approved any mRNA vaccines and the domestic vaccines against omicron do little. The ever infallible Communist Party may soon have an acute problem of explanation. And the Europeans an answer.

source site