China spots an opportunity

[Balance of Power]( From [Bloomberg Politics]( [FOLLOW US [Facebook Share]]( [Twitter Share]( [SUBSCRIBE [Subscribe]](  The coronavirus pandemic has halted protests in Hong Kong about the extent to which China looms over the Asian financial hub’s affairs. Even so, it may have just driven that discontent briefly underground. Hong Kong sits uneasily within Chinese rule. It was rocked by enormous, violent protests last year. Now it seems China [has decided]( the moment is right to try and stamp dissent out for good. Over the weekend the Beijing-backed Hong Kong government arrested 15 people, including prominent pro-democracy activists and a lawmaker. It came after Xia Baolong — [a close aide]( to President Xi Jinping — was installed to oversee Hong Kong affairs. China had [expressed exasperation]( of late over opposition lawmakers in Hong Kong’s parliament, accusing them of potentially [violating their oaths]( by filibustering and stalling government policy. Legislative elections are scheduled for September. So this latest move is not a massive surprise. China is banking on the virus keeping protesters at bay. Still, it’s a risky gambit given the discontent not just with Beijing but with perceived failures by the local government, including on issues like housing and the cost of living. The protests last year drew crowds estimated in the millions. There’s also the question of America. President Donald Trump is increasingly pivoting toward [China blame]( for the coronavirus spread. There’s [an incentive]( there for him as he assesses his own re-election prospects in November. Already the U.S. has criticized the weekend arrests in Hong Kong. It wouldn’t take much for Trump to decide to weigh in there also. — [Rosalind Mathieson]( Media tycoon and prominent democracy advocate Jimmy Lai at a protest in Hong Kong on Aug. 18, 2019. Photographer: Justin Chin/Bloomberg Global Headlines [Culture wars]( | Trump is dealing with his biggest crisis as U.S. president by stoking the nation’s partisan divide over the pandemic. With his poll numbers down, he’s egging on protesters against stay-at-home restrictions in states governed by Democrats. The battle over when to ease the lockdown has intensified as cases increase across the U.S., even as slowdowns in deaths and hospitalizations in the epicenter prompted Governor Andrew Cuomo to say New York appeared to be [“on the other side”]( of the outbreak. [Cautious optimism]( | Germany is among the first nations in Europe to ease virus restrictions, allowing smaller stores to reopen this week. With [reported cases]( today rising by the least this month, Europe’s biggest economy will be watched closely by countries from Italy to the U.S. Amid declining infections, South Korea will relax some restraints and [may resume]( normal life from May 6, while New Zealand, which was quick to impose a widespread lockdown, will [partially ease]( containment measures in a week. [Angry defense]( | Boris Johnson’s government issued two separate, lengthy rebuttals to criticism of its handling of the pandemic after newspaper reports suggested the U.K. prime minister failed to take the virus seriously early on and criticized its procurement of ventilators. Britain has faced a shortage of tests, protective equipment for health workers, and a soaring death toll. Former Prime Minister Tony Blair told Bloomberg TV today the U.K. was “somewhat behind the curve” in suppressing the virus. [Divided approaches]( | President Jair Bolsonaro is still pushing to reopen Brazil’s economy, speaking yesterday at a protest against measures imposed by state governors to slow the coronavirus spread. The far-right president has repeatedly defied medical guidance on social distancing by mingling with supporters, and last week fired his health minister [amid differences]( over how to handle the pandemic. [Gang truce]( | South Africa’s notorious gangs have responded to the virus outbreak by agreeing to a cease-fire that’s slashed the drug trade and seen an unprecedented drop in murders in a country with one of the world’s highest homicide rates. As [Loni Prinsloo]( and [Pauline Bax]( report, a network of gang leaders known as the Council is providing funds to their members until June so they can feed their families during the shutdown. What to Watch This Week - Italian Prime Minister Giuseppe Conte called again for joint euro-area bonds to aid economies hit by the virus, previewing a [testy summit]( Thursday of [European Union]( leaders. - Republicans and Democrats [are optimistic]( about reaching a deal to bulk up a loan program for small firms, with news also that burger chain [Shake Shack]( will return a $10 million loan. - The U.K. and the EU [start talks today]( over their future relationship after a six-week interruption by the coronavirus. - Oil has fallen to the [lowest in more than two decades]( on concern the world is running out of places to store crude after output cuts proved insufficient to cope with plunging demand. - Argentina's debt renegotiation process enters the [bargaining phase]( between the government and bondholders after the country presented its offer on Friday. Thanks to all who responded to our pop quiz Friday and congratulations to Christopher Genco, who was the first to name South Korean President Moon Jae-in as the leader who secured a strong win in parliamentary elections. Tell us how we’re doing or what we’re missing at [balancepower@bloomberg.net](bbg://screens/MSG%20balancepower%40bloomberg.net). [And finally]( ... As the Amazon becomes a virus hotspot in Brazil, indigenous leaders are, with the help of federal police, blocking the entrances to their territory. Local residents in the area are especially vulnerable to the coronavirus as requirements for maintaining sanitary conditions — including running water — are often lacking. For some, the closest medical help is an overburdened and ill-equipped hospital days away by boat. A member of the Kayapo tribe on Jan. 17. Photographer: Carl De Souza/AFP via Getty Images.   You received this message because you are subscribed to the Bloomberg Politics newsletter Balance of Power. 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