Year of the rat: Xi JInping's grand plan for China in peril

FPI / February 7, 2020

The Chinese "year of the rat" which began on Jan. 25, is off to a rocky start for the Chinese Communist Party.

The pro-democracy movement in Hong Kong, a disruptive trade war with the United States and now the deadly coronavirus are major setbacks for Chinese supreme leader Xi Jinping in his aspirations for a ‘China century’ in which the communist nation supplants the U.S. as the world’s top superpower, analysts say.

The Wuhan coronavirus outbreak has “laid bare the worst aspects of China’s command and control system of governance” under Xi, BBC China correspondent Stephen McDonell said.

“The Chinese people will take some convincing that the government knows how to manage such an emergency,” McDonnell added.

Related: Informed consensus on Wuhan virus indicts Chinese Communist Party, February 4, 2020

The downside of the Chinese Communist Party (CCP) system of top-down control became clear amid the government’s response to the deadly virus, Charlie Campbell noted in a Feb. 6 report for Time.

“Nobody acted until they got word from the top, and then everyone wildly overreacted in order to satisfy the leader,” Campbell wrote. “This was evident in Wuhan, the capital of Hubei province, where the outbreak began, and the official response lurched from cover-up to overreaction only after Xi addressed the crisis.”

Jude Blanchette, a China analyst at the Washington-based Center for Strategic and International Studies, said that “the full CCP apparatus didn’t kick into gear to address the coronavirus until Xi had weighed in on the matter.”

Notably, since news of the coronavirus went global, Xi has kept a low profile. He was not seen in public for eight days after the Lunar New Year.

“Since Xi came to power, problem after problem have occurred on his watch that he seems unable to effectively manage,” said Blanchette.

According to China’s official figures, the coronavirus has a fatality rate of just 2 percent – about the same as regular influenza and a far cry from the 50 percent of Ebola or the 10 percent of SARS.

If China’s figures are accurate — which many analysts dispute — why has China placed entire cities in lockdown, quarantined tens of millions of people and mobilized troops?

In a statement on the China National Health Commission’s website, Xi said “all-out efforts must be made in the prevention and control of the contagion,” and called on “party committees and governments at various levels as well as relevant departments to make people’s lives and health a top priority, devise meticulous plans, mobilize all available resources and take concrete and effective measures to contain further spread of the sickness.”

“No crisis is too deadly that they can’t take a time-out to promote the party through manipulation of it,” says Scott W. Harold, an East Asia expert at the U.S. policy think tank Rand Corp.

Meanwhile, the death of a Chinese doctor who tried to warn about the outbreak has sparked widespread public anger in China.

Li Wenliang died after contracting the virus while treating patients in Wuhan.

In December, Li sent a message to fellow medical professionals warning of a virus he thought looked like SARS. But he was told by police to "stop making false comments" and was investigated for "spreading rumors".

News of Dr. Li's death became the top trending topic on Chinese social media, garnering an estimated 1.5 billion views.

His death has also brought demands for action, with "Wuhan government owes Dr. Li Wenliang an apology" and "We want freedom of speech" among the hashtags trending, the BBC reported.

Both hashtags were quickly censored. When the BBC said it searched Weibo early on Friday, hundreds of thousands of comments had been wiped. Only a handful remain.

"This is not the death of a whistleblower. This is the death of a hero," read one comment.

Many have taken to posting under the hashtag "Can you manage, do you understand?" - a reference to the letter Dr. Li was told to sign when he was accused of disturbing "social order".

The coronavirus is also strangling China’s supply chains, a report noted.

Tara Donaldson reported for Sourcing Journal that FedEx announced “adjusted” service in “many provinces in China,” and said Friday that customers “might experience delay.”

UPS cancelled 22 flights to China. American Airlines cancelled all flights to China through March 27, and Delta did the same through April 30. British Airways, Lufthansa, United Airlines and Virgin Atlantic, among others, have all made similar moves, and Cathay Pacific, which has its main hub at Hong Kong International Airport, said it will more than halve its flight capacity to mainland China through the end of March, Donaldson reported.

“This is going to be a significant disturbance in the supply chain,” said Sean Maharaj, managing director of global management consultancy AArete. “We compare this to the impact of SARS (severe acute respiratory syndrome), but the export capability and global merchandise manufacturing was significantly different in terms of not only the volume coming out of China, but the complexity of the supply chains.”

Taking transportation alone, any goods coming out of China will face export challenges.

“This is going to be a major issue in terms of shipments. Longshoremen, cargo ships are going to be short of volume, there’s going to be way too much capacity…and excess capacity is pushing down already fragile rates,” Maharaj said, adding that this comes on top of tariffs that have already weighed on costs. Air freight quotes have already gone up.

“This will go all the way through to warehousing and everything we do to get production on shelves,” he said.

With companies like FedEx and UPS already making moves to halt service, delays may be the least of the supply chain’s concerns.

“Once providers like that go into crisis mode, we’re looking at more than delays,” Maharaj said. “We’re talking about cancellations and non-shipments. I don’t think we know where the bottom is on this.”

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