Xi’s Covid predicament

Your Balance of Power today looks at China’s Covid predicament. [View in browser]( [Bloomberg]( China’s pandemic strategy will “stand the test of history," according to state media, which is busily insisting President Xi Jinping’s policies have been right all along. In reality, the chaotic departure from Covid Zero has unleashed a wave of infections, overwhelmed Beijing’s hospitals and left factories hoarding medicine as they prepare for outbreaks among workers. Key reading: - [Xi Stays Silent as Covid Zero Strategy He Championed Crumbles]( - [China Cranks Up Propaganda Defending Xi as Covid Surges]( - [China Envoy Blames ‘Foreign Forces’ for Landmark Covid Protests]( - [China’s Economy Braces for More Turmoil as Covid Wave Spreads]( - [China’s Care Homes Rush to Protect Elderly From Covid Surge]( Yet, in a lengthy front-page commentary in the People’s Daily newspaper, the Communist Party maintains the “China solution” of dealing with the epidemic “demonstrated the superiority of the country’s socialist system to the greatest extent.” The cranking up of the propaganda machine highlights Xi’s predicament. He needs to justify a drastic pivot from a landmark policy while redirecting any possible blame for the messy fallout. One method is to distance himself from the change in approach: while editorials call on citizens to “unswervingly” trust leaders, Xi has so far remained silent on the shift. Instead, the party has relied on the media, alongside public statements from local government officials and health authorities to burnish and defend the lifting of restrictions. That leaves plenty of room for adjustment by the most senior figures who are well-versed in deflecting criticism. Case in point: China’s ambassador to France last week blamed widespread protests over Covid Zero on unspecified “foreign forces” who he said exploited frustration after local governments failed to implement Beijing’s relaxation of the policy. But state media and official messaging can only go so far. Juggling parallel realities will only become tougher, with a Bloomberg Intelligence estimate that 5 million people could be hospitalized and as many as 700,000 may die. — [Rebecca Choong WilkinsÂ]( People line up for Covid-19 tests in China’s Jiangsu province yesterday. Source: AFP/Getty Images Click [here]( to listen to our Twitter Space conversation on the surge of industrial strikes worldwide. And if you’re enjoying this newsletter, sign up [here]( for Balance of Power. Global Headlines Arms race | Ukraine and Russia face a critical [question]( with the war in its 10th month: Can they secure enough missiles and artillery through winter to prevail? As [Marc Champion]( reports, with both armies using up munitions at a frightening pace, which side runs low first could decide whether Ukraine or Russia emerges in the spring with the strategic initiative to potentially end the war on its terms. - Poland and Lithuania [are blocking]( the European Union’s ninth package of sanctions against Russia, a Lithuanian government minister said ahead of a meeting of the bloc’s leaders. - Follow our rolling coverage of the war [here](. Access denied | The US Senate voted to ban the hugely popular [TikTok video-sharing app]( from all government-issued phones and other devices as the Biden administration considers restrictions on the Chinese-owned platform. The bill underscores fears that TikTok and its parent, ByteDance, could share information on US users with Chinese authorities. - [Read how Elon Musk’s Twitter]( has become a Shakespearean drama in Silicon Valley. Sri Lanka’s economy likely fell deeper into recession, as tight monetary policy and Asia’s fastest inflation further [dampened]( growth. Yet a bailout agreement with the International Monetary Fund and restructuring talks with other creditors have stoked optimism that the country is turning a corner. Resetting ties | Turkish President Recep Tayyip Erdogan said he wants a three-way meeting with Syria’s Bashar Al-Assad and Russia’s Vladimir Putin, signaling [a thaw]( with Damascus that could help end the war in Syria. His remarks come amid a push by Moscow for better ties between the neighbors. Best of Bloomberg Opinion - [China Clashes Are Pushing India Away From the US: Mihir Sharma]( - [The War Has Split Russia Into Five Tribes: Leonid Bershidsky]( - [The European Parliament, Bribes and a Question: Andreas Kluth]( Early tussling | Ten months before an election that may dislodge Poland’s nationalist ruling party, accusations of [vote manipulation]( are setting the tone for what may be an acrimonious contest. Ruling party leader Jaroslaw Kaczynski has called for changes to make ballot “manipulation and forgery” harder, such as having party faithful at every polling station, with the opposition saying, in turn, it plans to mobilize 54,000 volunteers to monitor the vote. Explainers you can use - [How Blacklisting ‘Entities’ Became a Trade War Weapon]( - [Election Deniers Reap Fresh Cash as Tech, Wireless Firms End Ban]( - [Why US and EU Are Heading for a Fight Over Green Subsidies]( Defense worries | Indonesia is confronting challenges overhauling its [aging military]( to face down threats that include a long-running territorial dispute with its biggest trading partner, China. As [Philip Heijmans]( explains, its reliance on several foreign suppliers — including Russia — over the years means its hardware is burdened by interoperability problems and military efficiency is hampered by a glut of new recruits and a rapid system of rotation. Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to Note - Germany’s first liquefied natural gas terminal will soon be set up in a north coast port, the first of several specialist tankers Berlin is counting on to ease its [energy crisis](. - Peru declared a nationwide [state of emergency]( to restore order after clashes between police and protesters demanding the release of former President Pedro Castillo. - Ghana’s president alleged the government of neighboring Burkina Faso has given [Russian mercenaries]( a mine as payment to help fight an insurgency in that country. - Brazil’s electoral court is investigating outgoing President Jair Bolsonaro, his running mate and some allies in congress for allegedly [casting doubt]( on the result of the October election and abuse of power during the campaign. - Canada’s environment minister said [significant progress]( has been made at COP15, the UN biodiversity summit in Montreal, after talks hit an impasse earlier over funds for poorer nations. And finally ... A 37-acre plot on the outskirts of Cape Town next to a railyard has become the site of a tussle between Amazon and some members of the Khoisan, a southern African tribe that traces its linage back more than 100,000 years. Approval for the e-commerce giant’s $250 million regional headquarters was meant to spur thousands of jobs but as [Loni Prinsloo]( writes, it’s sparked [protests]( from the group that sees the stretch of mostly marshland as sacred. The Amazon construction site sits in the shadow of Cape Town’s iconic Table Mountain. Photographer: Guillem Sartorio/Bloomberg Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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