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Xi Jinping’s long-touted Covid Zero strategy in China is now facing a major test, just weeks be

Xi Jinping’s long-touted Covid Zero strategy in China is now facing a major test, just weeks before a crucial meeting that’s expected to han [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Xi Jinping’s long-touted Covid Zero strategy in China is now facing a major test, just weeks before a crucial meeting that’s expected to hand him a landmark third term in power. A lockdown in the southwestern megacity of Chengdu could decide the success or failure of the policy. If authorities are able to stamp out cases by shutting down, mass testing groups and isolating infections, the Chinese president can hold it up as proof the lives saved by Covid Zero are worth the economic pain. Key reading: - [China’s Economy Takes Hit From Global Slowdown as Exports Weaken]( - [Xi’s Covid Zero Strategy Faces Make-or-Break Test in Chengdu]( - [China’s Xi Has Broad Support for Continued Rule, Envoy Says]( - [Covid Zero Throttles Chinese Oil Demand Before Key Congress]( Yet Chengdu authorities have given no time frame for lifting restrictions in the city of about 21 million people, raising fears of a reprise of Shanghai’s grueling two-month lockdown. If another huge urban center is seen to struggle with food shortages, social unrest and economic losses, that would form an uncomfortable backdrop to Xi’s record at the Communist Party’s twice-a-decade leadership summit next month. He has presented the Covid Zero strategy as a considered political choice aimed at protecting the country from the level of fatalities seen in the US, which has recorded 1 million deaths compared with the 5,200 officially reported by China. His opening address at the congress Oct. 16 will be examined for signals on whether China will shift from trying to eliminate Covid to living with the virus like the rest of the world. Any change will be hard, since China has so far declined to approve more effective mRNA vaccines and failed to bring up lagging inoculation rates among the elderly. The economic costs of Covid Zero are becoming increasingly clear, as growth forecasts are slashed and factory and retail activity slumps. The question is whether there will also be a political price for Xi. — [Colum Murphy]( A Covid-19 testing booth in Beijing on Aug. 30. Bloomberg Click [here]( to sign up for our Equality Newsletter running tomorrow and share this newsletter with others. They can sign up [here](. Global Headlines Long winter | One week into Ukraine’s counteroffensive, the operation’s [limited scale]( and goals in the south are becoming clearer, together with Russia’s response, as the two sides head toward a [difficult winter](. Both appear to have accepted for now that they can’t make a major breakthrough on the ground. Instead they’re reaching deep to disrupt the other’s supply lines. - German Chancellor Olaf Scholz accused Russia of seeking to “[blackmail](” Germany and its European partners by shutting off gas deliveries. - President Vladimir Putin said Russia will emerge [stronger]( from his invasion of Ukraine as he lashed out at US and European “sanctions fever.” Premier’s promise | Liz Truss pledged “action this day and every day” to deal with [challenges]( facing the UK in her first national address as prime minister. With brutal economic headwinds threatening to plunge millions into poverty this winter, her team is expected to announce plans tomorrow that could see the government spend as much as £200 billion ($230 billion) over the next 18 months to contain soaring energy prices. - US President Joe Biden spoke by phone to Truss yesterday in a conversation that alluded to potential [frictions]( between the allies over Brexit’s impact on the Northern Ireland peace agreement. - Truss’s new government is the UK’s first [without]( a White man holding one of the so-called four great offices of state. The world’s original and longest-running experiment in negative interest rates will [finally end]( this week as Denmark raises borrowing costs in tandem with the euro zone. Denmark’s foray below zero in 2012, intended to deter investors from buying the krone, challenged notions of how to price money and inspired central bankers seeking new stimulus methods. Political shuffle | Chilean President Gabriel Boric fired his interior minister and removed a top adviser in a sweeping cabinet [shake-up]( after voters overwhelmingly rejected a new constitution his government had backed in a referendum. The reshuffle represents a return for center-left parties that governed the country for most of the past 30 years, and which Boric had criticized for not doing enough to fight inequality. Best of Bloomberg Opinion - [Republicans Need a Crash Course in Capitalism: Michael Bloomberg]( - [Liz Truss’s Plan Could Avert a UK Recession: Raphael and Hanson]( - [Do ‘Trump Judges’ Exist? We’re About to Find Out: Noah Feldman]( Another push | Thailand’s opposition parties are trying again to [strip]( the junta-appointed Senate of powers to pick the next prime minister before elections likely to be held early next year. Lawmakers are set to vote today to amend the military-backed constitution. Five previous attempts since 2020 have failed. Explainers you can use - [Is a Fetus a Person? The Next Big Abortion Fight]( - [Why Ukraine’s Big Nuclear Plant Raises Worries]( - [Why Japan Is Turning Against a State Funeral for Abe]( Feeling distant | About half of US workers can be described as “[quiet quitters](,” according to new research by Gallup, meaning they fulfill their job description but are psychologically detached from their work. The survey firm began to see employee engagement sink in late 2021, with workers indicating they felt less connected to their organization’s mission, and younger people showing a substantial drop. Tune in at 8am ET for our weekly global Twitter Space and a conversation with reporters about the major test Xi is facing with his Covid Zero policy ahead of a potential landmark third term in power. You can listen via [this link](, which will also be available afterward. News to Note - Xi and Putin will [meet]( in Uzbekistan next week, Tass reported, during the Chinese leader’s first trip abroad in 2 1/2 years. - Former White House strategist Steve Bannon, who was pardoned by Donald Trump on his last day as US president, will [surrender]( tomorrow to face criminal charges in New York, a source says. - President Jair Bolsonaro called on his followers to take to the streets during Brazil’s Independence Day celebrations, hoping for a large show of popular support to boost his [struggling]( re-election campaign less than a month before the vote. - Xi renewed calls for China to step up the development of technology [critical]( to national security at a time when escalating US sanctions threaten Beijing’s efforts to become self-reliant in semiconductors. And finally ... Apostasy charges for Christian converts from Islam, a death-by-stoning sentence for adultery and the emergence of a puritanical police force indicate religious oppression is once again becoming prevalent in Sudan. As [Simon Marks]( and [Mohammed Alamin]( explain, they are the latest signs that the military, which seized power in October, is [rolling back]( the democratic gains of the 2019 revolt that ousted dictator Omar al-Bashir after three decades. Sudanese demonstrators protest last year's military coup in Khartoum on Aug. 31. Photographer: Marwan Ali/AP/Getty Images 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. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022

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