Beijing zeroes in on Hong Kong

[Bloomberg]( Follow Us //link.mail.bloombergbusiness.com/click/20392521.77448/aHR0cHM6Ly90d2l0dGVyLmNvbS9icG9saXRpY3M/582c8673566a94262a8b49bdBa165c669 [Get the newsletter]( President Xi Jinping’s renewed push to [ram through]( national security legislation on Hong Kong speaks to a larger truth: China’s Communist Party is feeling the pressure. The Covid-19 outbreak has put millions out of work in China and ravaged the economy, forcing Xi to abandon goals to improve livelihoods that have underpinned his legitimacy. At the opening of the National People’s Congress in Beijing today, the party didn’t announce an annual growth target for the [first time in decades]( due to “great uncertainty” in the world economy. The focus was squarely on creating jobs: Defense spending this year is set to grow at the slowest pace since 1991, while China dropped a second key measurement [on energy conservation]( used to mark progress in the battle against climate change. The party [faces other risks](, most immediately in Hong Kong. Pro-democracy activists quickly [called for protests]( to oppose the plan to impose a national security law, a move groups in the city have resisted for decades out of fear it would curtail any dissent. U.S. President Donald Trump could remove some of the special trade privileges Hong Kong enjoys due to its autonomy from the mainland. Any action could trigger another round of [tit-for-tat escalation]( between the world’s largest economies. But the biggest longer-term worry could be at home. With Hong Kong gearing up for another summer of unrest, Xi sought to take out the top threat on the horizon. Time will tell if it backfires. — [Daniel Ten Kate]( Confrontations at a meeting to elect a new chairperson for the House Committee at the Legislative Council in Hong Kong on May 18. Photographer: Roy Liu/Bloomberg [Click here]( for Bloomberg’s most compelling political images from the past week, and tell us how we’re doing or what we’re missing at balancepower@bloomberg.net. Global Headlines [Leadership matters]( | While the final scorecards on handling the coronavirus aren’t in, it’s clear some leaders have revealed their weaknesses: Xi’s fondness for secrecy, Trump’s tendency toward politicization and U.K. Prime Minister Boris Johnson’s bluster, which almost cost him his life. As [Marc Champion]( explains, much of the political impact from mistakes has been obscured by a “rally around the flag” effect, but that’s starting to fade. [Bread lines]( | Food bank volunteers in Europe are seeing new faces among the people who are struggling to feed themselves. The surge in bread lines is a sign that Europe’s safety nets are failing to catch new classes of vulnerable people, even with vast emergency aid programs. An economy in deep recession raises the specter of an increase in income inequality in a region that’s traditionally better at tackling the problem than the U.S. [Covid campaigning]( | Trump credits his signature rallies for his improbable White House victory and the roaring economy he once presided over as his best argument for re-election. But with the pandemic destroying both, he’s trying to compensate by turning [official events]( into the next best thing. The visits, often to see manufacturers of medical equipment, feature the same themes and campaign tactics. [Default time]( | Argentinian President Alberto Fernandez faces a defining moment as the nation braces for its ninth sovereign debt default. After five months in office grappling with recession, 50% inflation and a crash in the unofficial peso rate, Fernandez is trying to strike a deal with bondholders over the coming weeks to prevent more chaos. But his administration is [planning to miss]( a delayed interest payment on about $500 million due today. [Bloody summer]( | When Prime Minister Narendra Modi took control of the disputed Kashmir region last August, he said it would bring India’s only Muslim-majority state closer to the rest of the country and improve its economy. Nine months on, all signs are pointing in the opposite direction. As melting snow opens mountain passes in the Pir Panjal Ranges that militants from Pakistan use to cross into India-controlled Kashmir, security chiefs are seeing an upswing in violence. What to Watch: - Secretary of State Michael Pompeo said the U.S. will [officially inform]( Russia today of its intent to withdraw from the Treaty on Open Skies, the 35-nation arms-control pact designed to promote transparency about military forces and their activities. - Talks between the Indian and Chinese military to defuse tensions along their disputed border have [ended in deadlock](, while incidents are at their highest since 2015. - Vladimir Putin may announce [a snap ballot]( within weeks to gain public approval for proposed changes to Russia's constitution that would let him remain as president potentially until 2036, after the pandemic forced him to delay the vote in April. - In a rare [moment of consensus](, Brazilian President Jair Bolsonaro and state governors endorsed a proposal to freeze public servants’ salaries until the end of 2021, easing a deadlock over a pandemic aid package. Pop quiz, readers (no cheating!). Besides the U.S., which country is in a trade spat with China over its calls for an investigation into the origin of Covid-19? Send your answers to balancepower@bloomberg.net. [And finally]( ... Bananas have a claim to be the modern world’s first globalized product and are still the most exported fruit on the planet. Yet the trade that began some 130 years ago is now a potent symbol of the underlying fragility of globalization. As [Alan Crawford]( and [Stephan Kueffner]( explain, how it adapts and responds may suggest a path toward rebuilding international consensus in the post-pandemic era. Workers harvest bananas at a plantation in Milagro, Ecuador on May 13. Photographer: Vicente Gaibor   A special offer for Balance of Power readers | [For just $1.99 a month](, get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.  You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022