Xi eases Covid Zero

Xi moves to ease Covid Zero rules. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Back in May, as lockdowns in China’s two biggest cities spurred rare outbursts of anger, President Xi Jinping and the nation’s top leaders declared that his signature Covid Zero policy “can stand the test of history.” Six months later, it’s not looking so good. Key reading: - [China Eases Quarantine, Flight Bans in Covid Zero Pivot]( - [China’s New Leaders Back a More Targeted, ‘Decisive’ Covid Zero]( - [Here’s What Changed in Top China Leadership’s Covid Language]( - [These Are the 20 New Rules China Is Following to Combat Covid]( - [Euphoria Sweeps China Stocks as Signs of Covid Zero Pivot Emerge]( China today took its biggest steps yet to open up since the pandemic began, releasing 20 new rules that will make it easier to travel and live in the world’s second-biggest economy. Major steps included a cut to mandatory quarantine for travelers and a pullback on testing, along with a renewed push to vaccinate the elderly. Xi and his allies on the new seven-member Politburo Standing Committee opened the door for the changes yesterday in one of its first meetings after he secured a precedent-busting third term in office last month. China’s battered stocks soared. Pressure had been building on the Chinese leader to shift course for months. With economic growth sputtering close to a four-decade low, criticisms of the policy in China began to mount — including with a rare public protest in Beijing that embarrassed Xi just days before his coronation. At the same time, it’s unclear how far he can go in opening China. A lackluster elderly vaccination rate means more than a million people could perish if China starts living with the virus, which would undermine Xi at home and abroad. While any easing for China is good for the world economy, Xi still has a tough road ahead balancing demands to open further with the risks of overwhelmed hospitals and widespread death. — [Daniel Ten Kate](  A public Covid-19 testing booth in Beijing on Wednesday. Photographer: Kevin Frayer/Getty Images  Click [here]( to listen to our Twitter Space conversation about how the world followed the US midterm elections and [here]( for this week’s most compelling political images. If you’re enjoying this newsletter, sign up [here]( for Balance of Power. Global Headlines Pushing on | Ukraine’s forces have [liberated]( dozens of settlements during counteroffensives in the country’s northeast and south, President Volodymyr Zelenskiy said in his nightly address. Authorities in Kyiv remain [cautious]( about Russia’s announcement its troops are abandoning the Ukrainian city of Kherson, the first major regional center seized in its invasion. - In the latest reflection of the Kremlin’s [expanding]( war effort, bomb shelters across Russia are being brought back to life after more than three decades of neglect since the end of the Cold War. - The Kremlin sought to [distance]( President Vladimir Putin from the retreat in Kherson, saying the decision to withdraw Russian forces came from the defense minister. Presidential stakes | The US presidential race in 2024 is already taking shape, with the midterm elections giving a boost to President Joe Biden and Florida Governor Ron DeSantis. Former President Donald Trump was left on [the defensive]( after losses by his hand-picked candidates in key Senate and House races triggered panic and rare public dissent across the Republican party. - Trump [lashed out]( at Rupert Murdoch’s News Corp. and DeSantis, claiming that the media mogul’s news outlets are “all in” for his chief Republican rival. - The unexpectedly [poor showing]( by Republicans in the midterms has complicated Kevin McCarthy’s plans to become House speaker. Iran’s stockpile of highly-enriched uranium swelled to [a record]( in the last three months, the International Atomic Energy Agency said, even as violent protests against the Islamic Republic’s hard-line rulers thrust the country into deep political crisis. Unenviable task | UK Prime Minister Rishi Sunak’s government is working on an autumn budget to be delivered next week against a [grim]( economic backdrop of recession and job losses. Sunak and his finance minister, Jeremy Hunt, must attempt to keep voters on board while appeasing financial markets with a package of spending cuts and tax increases worth more than £50 billion, a balancing act that could define his fledgling premiership. - The UK economy [shrank]( in the third quarter for the first time since the final lockdown of the pandemic as the cost of living crisis squeezed spending and the extra bank holiday for the Queen’s funeral shut businesses. Best of Bloomberg Opinion - [The Most Surprising Thing About the Midterms: Jonathan Bernstein]( - [A G-20 Talking Shop? That’s No Bad Thing: Clara F. Marques]( - [Cost-of-Living Crisis Is a Slow Burn for the UK: Andrea Felsted]( Saudi friends | Saudi Arabia has been winning support among OPEC+ crude exporters as well as China and Turkey after Biden accused Riyadh of siding with Russia over oil. The dispute exposes a broader shift, with countries willing to [question US influence](, even if that runs counter to their immediate economic interests. Explainers you can use - [Looming Debt Ceiling Fight Risks Tipping Scales on US Recession]( - [‘Green Gentrification’ Complicates Climate Resilience Efforts]( - [Why Another ‘Crypto Winter’ Is Test for Digital Money]( He’s back | Once a persona non grata whom the US and dozens of other nations tried to unseat, Venezuelan President Nicolas Maduro is back in the international limelight. Maduro roamed the UN climate summit in Egypt this week, [shaking hands]( with US envoy John Kerry and exchanging pleasantries with France’s Emmanuel Macron. It all helps him project a sense of legitimacy and normalcy at home. 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 - A Hong Kong court handed down a three-month jail term to the first person convicted under a law banning disrespect of China’s national anthem, a sign that the city is pushing ahead with its [crackdown]( on dissent. - A federal judge in Texas [struck down]( the Biden administration’s student loan forgiveness plan, calling it “one of the largest exercises of legislative power without congressional authority in the history of the United States.” - France has called for an international ban on [deep sea mining](, citing climate change, upending negotiations by a UN-affiliated organization to allow the exploitation of unique ocean ecosystems for valuable metals to begin within two years. - The euro zone faces a [grim winter]( as a recession bites just as double-digit inflation grips the region and war rages nearby, according to the European Commission. - Elon Musk, in his first address to Twitter employees since purchasing the company for $44 billion, said that [bankruptcy]( was a possibility if it doesn’t start generating more cash, sources said. Pop quiz (no cheating!) Which two countries have yet to approve applications by Sweden and Finland to join NATO? Send your answers to balancepower@bloomberg.net. And finally ... The plastics industry says recycling is the solution to reducing waste, but in Thailand, where much of the world’s trash ends up, it’s created a [new set]( of problems, [Matthew Campbell]( reports. The wide range of processes, some of them dirty and unpleasant, can have significant negative consequences for local communities. The struggle in Thailand to plastic waste from overseas and rein in recyclers shows how difficult the fight will be in places that bear the brunt of the world’s plastic pollution. An employee packs down plastic bottles into a bag at Sunee Recycle 59 Group in Bangkok on Oct. 6. Photographer: Andre Malerba for Bloomberg Green Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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