Asia Society Policy Institute Vice President Daniel Russel joined Shery Ahn and Haidi Stroud-Watts on Bloomberg Markets to discuss China’s response to the coronavirus Outbreak.

“The coronavirus has cracked the veneer of Communist Party infallibility,” says Russel. “Both domestically and internationally, the China Dream has been a casualty of the coronavirus. The party is presented with serious challenges in the run-up to the twentieth party congress in 2022.”

Russel discusses how the coronavirus has impacted Communist Party leadership in China, and Chinese people’s anger at the party for the initial cover-up, for scapegoating local officials instead of taking responsibility for the death of Doctor Li Wenliang, and responding with political slogans rather than with medicine. Russel says that Xi Jinping’s extreme centralization caused paralysis among local politicians intent on avoiding blame precisely when efficient decision-making was necessary. While it is true that the Chinese government response since the national government stepped in has been impressive in that the party has been able to quarantine hundreds of millions of people and build these pop-up hospitals, the civil society and NGO response to the crisis is weak at best.

Russel concludes that the Chinese government has enacted a “Mao Zedong style crackdown,” with mass mobilization and slogans, and warns that this may not be sufficient to keep a hold on the country, because the Chinese social contract is based the party’s economic performance and its ability to protect its citizens. And, the party may not be able to uphold this social contract in the face of the coronavirus, and with the Chinese economy already hurting from the trade war with the U.S.

“Chinese history is filled with dynasties that ended with a natural disaster,” says Russel. “Xi Jinping and the Chinese Communist Party are worried, but unfortunately their response is to double down on social, political and security control.”

Watch the interview on Bloomberg TV.