Good morning from Kyiv where there’s something of a blizzard falling this morning with temperatures plunging to around -5C overnight.

What’s happening today?

Aside from a lot of forecast snow, many people in Ukraine – and around the world – will be waiting to see if there are any more slightly-mysterious explosions at airfields deep inside Russian territory.

Three such attacks this week have damaged Russian long-range bombers and killed three people, prompting Russian President Vladimir Putin to convene his security council.

American officials have also been quick to react, denying U.S.-supplied weapons were involved, whilst at the same time giving a thinly-veiled nod of approval to what are widely believed to have been Ukrainian drone attacks.

You can read more about that story here.

What was in Volodymyr Zelensky’s latest message? 

Wednesday Dec. 6 was Armed Forces of Ukraine Day so Zelensky took a break from his usual informal daily address to give a rousing speech to the nation.

“For eight years and 286 days, the Armed Forces of Ukraine have been defending our beautiful state from the occupier, from Russian aggression,” he said.

“Thousands of Ukrainians gave their lives for the day to come when not a single occupier remains on our land and all our people are free again.

“I wish you all one thing – victory. To all of us. You deserve it! All our people deserve it. All our parents, our children deserve it. Our state and history deserve it. To finally gain victory.”

What’s the latest military situation?

The British Ministry of Defense (MoD) has focused its attention on Russian efforts to reinforce defensive positions inside Russia itself, specifically along the “international border with Ukraine, and deep inside its Belgorod region.”

“Trench digging has been reported in Belgorod since at least April, but the new constructions are probably more elaborate systems, designed to rebuff mechanized assault,” the MoD states.

It adds that the only strategic purpose of such defenses is to rebuff a Ukrainian invasion of Russia, something which simply isn’t on the cards at all in reality.

The MoD has two possible explanations for the defenses – firstly, to “burnish patriotic feeling” and secondly, because some Russian officials’ grasp on reality is so weak they think there is a genuine threat of invasion.

It adds: “Paucity in strategic assessment is one of the critical weaknesses in the central Russian government architecture: as highlighted by Russia’s original decision to invade Ukraine.”

The Institute for the Study of War’s Dec. 6 daily assessment covers a multitude of topics, most notably:

• The Kremlin directly responded to Russian rumors of a second wave of mobilization in an apparent effort to manage growing societal concern and recentralize information about the war with the Russian government and its authorized outlets;
• Igor Girkin, a former Russian militant commander and prominent critical voice in the Russian milblogger information space, returned to Telegram following a nearly two-month stint in Ukraine and used his return to offer a vitriolic first-hand account of the situation on the frontlines;
• Ukrainian forces likely made recent gains in northeastern Kharkiv Oblast, and Russian forces conducted limited attacks and defended against Ukrainian counteroffensive actions.

And that’s it for today’s Morning Memo.

Kyiv Post will bring you the latest news throughout the day and we’ll be back with another edition tomorrow.

The post Kyiv Post Morning Memo – Everything You Need to Know on Wednesday, Dec. 7 appeared first on Kyiv Post.

Thomas Barkin, Richmond Federal Reserve President, was poring over the latest inflation-related data one morning this June after breakfast with bank interns when he saw an alarming sign. Prices had surged in May, after a slight drop in April that had raised hopes that a recent uptick in inflation would be short lived.

Barkin said the data, which triggered a U.S. bond market sell-off, prompted him in a call with Federal Reserve chairman Jerome Powell to give his support for a bigger interest rate increase than the one the Fed had all but promised to announce days later. “Move as fast as possible without breaking things,” Barkin said in an interview last month of his message to Powell.

It was one of a flurry of conversations Powell had with Fed rate-setters in the wake of the data, according to his public calendar for that Friday and Monday, as the world’s most powerful central banker sought to end months of parrying over whether to take tougher action to tame inflation.

Within days, the Fed announced a larger-than-expected 75-basis point hike, its biggest single step in nearly 30 years and what was to become part of its steepest rise in interest rates since the 1980s. It was the cue for central banks around the world to join a reversal of decades of cheap-money policies that will impact the economic fortunes of people around the world.

Central bankers, who only a decade ago were feted for their part in rescuing the economy from the global financial crisis, now have their credibility on the line as they struggle to deal with inflation not seen for decades.

From Washington to Frankfurt to Wellington, their mantra is that further rate increases are needed even if – as Powell has publicly stated – that will mean “some pain.” Higher costs of borrowing weighs on home-owners and squeezes company margins.

And their job is expected to get tougher next year. The challenge: agreeing on how fast and how much further to go as economic pain worsens. Powell has already faced criticism from both sides of the U.S. Congress; monetary policy in Europe has been challenged by politicians including French President Emmanuel Macron, who has told central bankers to be “very careful”.

Powell, who declined to be interviewed for this story, has repeatedly stated in public he was anxious to avoid the mistake of central bankers in the 1970s by acting too slowly but also knew the credibility risk of surprising financial markets.

Before the prices data published in June, Fed officials had aired different views about how temporary the inflation spike would prove to be and what action was needed. The new numbers showed how deeply rooted it was and that the small hikes made till then were not working.

Explaining the June hike, Powell told reporters afterwards that only once or twice in his decade-long Fed career had such game-changing data dropped so close to a rates decision. To those who say he was too slow to act, he has acknowledged on several occasions with “hindsight” he would have acted sooner.

After years of tame inflation, Fed officials and other central bankers say they have faced a chain of disruptive events beyond their control ranging from the COVID-19 pandemic to the Ukraine war.

There was little precedent for how fast things moved from an era of weak price growth to a point “where policymakers really had to apply themselves to bring inflation down,” said Agustin Carstens, head of the Switzerland-based Bank of International Settlements, known as the central bank for central banks.

In the United States, signs that inflation was taking on new proportions started to appear last year, from labor shortages to supply shortfalls across a growing array of goods and services.

Richmond Fed’s Barkin told Reuters that he came back from a June 2021 visit to Charleston, South Carolina, puzzled by anecdotal evidence that many people were not returning to work. Parents, he said he noticed, were struggling to find day care.

David Altig, research director at the Atlanta Federal Reserve, said the consensus view during that period that the shortfalls in supply of goods and services would gradually ease was not being reflected in data and anecdotal evidence.

“It just wasn’t happening,” Altig said.

The Federal Reserve stuck to the view that the surge in inflation would subside as the pandemic-scarred economy returned to normal. “We continue to expect inflation to decline over the course of the year,” Powell said in January, as the U.S. central bank continued to hold rates near to zero.

The central bank began increasing rates in March but its officials remained divided over how much it needed to raise them until the consumer prices data published in June ended the debate.

The Fed’s shift to a more aggressive stance without spooking markets helped forge a majority for tougher action at the Frankfurt-based European Central Bank (ECB).

By early summer, a group of policy “hawks” was pushing the ECB to commit to more than just a token 25-basis-point rate rise and take a cue from the Fed, according to more than a dozen officials with direct knowledge of the discussions.

Concerns that the rate hikes could lead to an explosion in the borrowing costs of indebted euro states – especially Italy – led in June to an agreement to help those countries with a so-called “Transmission Protection Instrument” (TPI) that would if needed be activated to prop up their debt.

“There was a shared consensus that, by addressing tail risks, TPI would also make it smoother to undertake a hiking cycle,” ECB chief economist Philip Lane – among the “doves” who resisted rapid tightening – told Reuters.

At a July ECB meeting, the hawks – led by ECB board member Isabel Schnabel of Germany, Dutch central bank chief Klaas Knot and German Bundesbank chief Joachim Nagel – pushed for a bigger move than the 0.25% point signaled to markets, according to conversations with the same dozen-plus officials.

Those officials said the group, coordinating by phone and in-person meetings, sought to convince Lane they now had a majority inside the rate-setting Governing Council for such a decision. The ECB announced a 0.5% rate increase in July, followed by a 0.75% hike in September – its biggest move since 1999. In lock step with the Fed, a further 75-basis-point rise followed on Nov. 2.

In response to a request for comment addressed to Schnabel, a spokesperson for the ECB said policy decisions are taken in Governing Council meetings after evaluating all incoming information and a thorough exchange of views.

Knot and Nagel declined to comment.

Even as some economists say an inflation peak could now be in sight, central bankers remain far from taming inflation. In the United States, it is running at more than three times the Fed’s target of 2%, according to the central bank’s preferred measure.

Powell last week said the Fed was “slowing down” the pace of interest rate increases. Financial markets now expect a 0.50% rise at the Fed’s next meeting in mid December – the same increment that the ECB is expected to announce a day later.

Yet both Powell and ECB peer Christine Lagarde have insisted that rate rises will continue. The concern among some central bankers is that politicians will respond by raising public spending and so aggravate the inflation pressure that their rate-hike cure is intended to heal.

Last week, Lagarde warned that such spending could push up demand and leave it further out of step with supply and so “might force monetary policy to tighten more than would otherwise be necessary,” noting signs this was already happening within the euro area.

Former Bank of England official Charles Goodhart believes that record public debt levels could at some point pose such a risk to financial stability that central banks may have to abandon policy-tightening efforts mid-way.

If that were to happen, central bankers “would have to reverse course to prevent the debt market from becoming more disorderly,” Goodhart told Reuters.

BIS’ Carstens said he was sure central banks would remain firm in the fight against inflation. But, he said, the past two years have shown how vital it was for economic policy to be coordinated across the board and that the old idea of central bankers as “policy responders of first resort” was outdated.

“As we move forward, this probably will not necessarily be the case – at least not to the extent that we have seen in the recent decades.”

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Tesla Inc launched two electric vehicle (EV) models in Thailand on Wednesday, marking its first foray into the regional autos hub that has long been dominated by Japanese manufacturers.

The launch of two EVs with prices ranging between 1.7 million baht to 2.5 million baht (($48,447 to $71,205) comes as Thailand makes a push for EV adoption and production by offering tax cuts and subsidies.

The U.S. automaker plans to start selling its EVs in Southeast Asia’s second-biggest economy via online channels, with deliveries set to start early next year. But it faces stiff competition from Chinese brands like BYD and Great Wall Motors, which have set up showrooms and distribution partners in recent years to reach customers and offer EVs with prices starting at 800,000 baht.

Tesla did not provide details on sales targets.

Thailand is Asia’s fourth-largest auto assembly and export hub for companies like Toyota Motor Corp and Honda Motor Co Ltd. It produces about 1.5 million to 2 million vehicles annually, of which about half are exported.

Fuel-based vehicles, especially made by Japanese brands, still dominate the market and uptake of EVs has gradually gained momentum, with about 7,000 new battery EVs registered in the first ten months of 2022, according to the Thailand Automotive Institute, up from 2,000 last year.

Customers who showed up to Tesla’s launch in a luxury mall in central Bangkok said they were interested in the new cars being offered.

“I’m excited. The price differences aren’t significant (from other EV brands),” said office worker Thitipun Paisirikul, 36, adding he expected the re-sale value of the car would be high.

The government wants at least 30% of vehicles produced in the country to be electric by 2030.

State-owned energy firm PTT Group this year announced a $1 billion joint venture with Taiwan’s Foxconn to produce EVs in Thailand.

($1 = 35.1100 baht)

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BEIJING — In a sharp reversal, China has announced a series of measures rolling back some of its most draconian anti-COVID-19 restrictions, including limiting harsh lockdowns and ordering schools without known infections to resume regular classes.

The National Health Commission in a 10-point announcement on Wednesday stipulated that COVID-19 tests and a clean bill of health displayed on a smartphone app would no longer be required, apart from vulnerable areas such as nurseries, elderly care facilities and schools. It also limited the scale of lockdown to individual apartment floors and buildings, rather than entire districts and neighborhoods.

People who test positive for the virus will be able to isolate at home rather than in overcrowded and unsanitary field hospitals, and schools where there have been no outbreaks must return to in-class teaching.

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The announcement follows recent street protests in several cities over the strict “zero-COVID” policy now entering its fourth year, which has been blamed for upending ordinary life, travel and employment while dealing a harsh blow to the national economy.

China has sought to maintain the hardline policy while keeping the world’s second-largest economy humming, but public frustration with the restrictions appears to have finally swayed the opinion of officials who had championed “zero-COVID” as superior to the approach of foreign nations that have opened up in hopes of learning to live with the virus.

Read More: Xi’s ‘Trap’: Why China Can’t Just End Its Zero-COVID Policy

“Relevant departments in all localities must further improve their political positions … and resolutely correct the ‘one size fits all’ simplified approach,” the commission said in its statement posted on its website.

Officials, often those at the local level under intense pressure to prevent outbreaks, must “oppose and overcome formalism and bureaucracy, and take strict and detailed measures to protect people’s life safety and health to the greatest extent, and minimize the impact of the epidemic on economic and social development,” the statement said.

Newly reported cases of COVID-19 in China have fallen from a daily record of more than 40,000 in recent days to just 20,764 on Wednesday, the vast majority of them asymptomatic.

Under the new measures, lockdowns can last no longer than five days unless additional cases are discovered, restrictions will be lifted on the sale of cold medications, and vaccinations for the elderly will be stepped up.

Orders for businesses and transport companies to suspend services will be lifted and greater attention will be paid to public safety, with fire exits no longer blocked due to lockdown orders.

The recent protests included calls for leader Xi Jinping to step down. The protests began Nov. 25 after at least 10 people died in a fire in an apartment building in Urumqi in the northwest. Authorities denied suggestions that firefighters or victims were blocked by locked doors or other anti-virus controls. But the disaster became a focus for public frustration.

Read More: What the Protests Tell Us About China’s Future

In its notice, the National Health Commission made no reference to the fire, the protests or any formal end to “zero-COVID,” which has been closely identified with Xi’s authority. The policy has kept most visitors out of China and disrupted manufacturing and global trade.

Officials for days have been gradually rolling back restrictions.

On Monday, commuters in Beijing and at least 16 other cities were allowed to board buses and subways without a virus test in the previous 48 hours for the first time in months.

Industrial centers including Guangzhou near Hong Kong have reopened markets and businesses and lifted most curbs on movement while keeping restrictions on neighborhoods with infections.

The government announced plans last week to vaccinate millions of people in their 70s and 80s, a condition for ending “zero-COVID” restrictions.

Health experts and economists warn it will be mid-2023 and possibly 2024 before vaccination rates are high enough and hospitals are prepared to handle a possible rash of infections.

Key Takeaways

• The Kremlin directly responded to Russian rumors of a second wave of mobilization in an apparent effort to manage growing societal concern and recentralize information about the war with the Russian government and its authorized outlets, but there are several indicators that Russia still intends to conduct a second wave of mobilization.
• Igor Girkin, a former Russian militant commander and prominent critical voice in the Russian milblogger information space, returned to Telegram following a nearly two-month stint in Ukraine and used his return to offer a vitriolic first-hand account of the situation on the frontlines.
• Ukrainian forces likely made recent gains in northeastern Kharkiv Oblast, and Russian forces conducted limited attacks and defended against Ukrainian counteroffensive actions.
• Russian forces continued to conduct ground attacks near Bakhmut and Avdiivka.
• Russian sources claimed that Russian forces made marginal territorial advances near Bakhmut, but Russian forces have not succeeded in their efforts to surround the city.
• Russian authorities are very likely conducting an information operation to convince Russians of the security and integrity of the Kerch Strait Bridge following repairs to the bridge span.
• Russian Ministry of Foreign Affairs (MFA) Spokesperson Maria Zakharova denied rumors on December 5 that Russia is preparing to withdraw from or transfer control of the Zaporizhzhia Nuclear Power Plant (ZNPP) to another actor.
• Russian occupation authorities continued to strengthen security measures in occupied territories.

The Kremlin directly responded to Russian rumors of a second wave of mobilization in an apparent effort to manage growing societal concern and recentralize information about the war with the Russian government and its authorized outlets. Kremlin Press Secretary Dmitry Peskov on December 6 urged Russians to rely on communications from the Russian Ministry of Defense (MoD) and the president and to ignore the “provocative messages” published on social media platforms such as Telegram regarding a second wave of mobilization.[1] Peskov’s statement is likely aimed at discrediting the growing influence of both Russian opposition and pro-war Telegram channels that have been consistently reporting on indicators of the Kremlin’s intention to resume mobilization in 2023.[2] Russian President Vladimir Putin is also increasing measures to prevent mobilized men and their families from complaining about mobilization problems. Putin, for example, signed a law banning rallies in government buildings, universities, schools, hospitals, ports, train stations, churches, and airports—likely to suppress riots and protests among mobilized men and their families.[3]

The Kremlin seems to be departing from the limited war messaging it has been using to reduce concerns among the general Russian public about the war, likely in an effort to condition the public for future mobilization waves. Belgorod and Kursk oblasts have announced the formation of territorial defense units, exposing many civilians to the war under the absurd premise of the threat of a Ukrainian ground assault on Russia’s border regions.[4] ISW previously reported that Kremlin propagandists have started propounding similar implausible theories about a Ukrainian ground threat to Russian territory.[5] Moscow officials even plastered advertisements for the special military operation throughout the city, which ISW has previously observed only in remote cities and settlements during the summer of 2022 amidst Russia’s volunteer recruitment campaigns.[6] However, these information conditions are likely insufficient to convince the Russian population at large of the necessity for additional mobilization given the underwhelming response to volunteer recruitment advertisement efforts over the summer. The Kremlin risks further harming its credibility by announcing mobilization that has been predicted by unofficial sources but not discussed by Russian officials. Russian officials face major challenges balancing Russian force generation needs, which require the enthusiastic support of the milblogger community, and control of the Russian information space.

Putin’s decision to order a second wave of mobilization, general mobilization, or even announce a formal declaration of war with Ukraine will not fix the inherent constraints on Russian military power available for the war in Ukraine in the short term. The Russian MoD can only simultaneously train about 130,000 conscripts during a bi-annual conscription cycle in peacetime and has struggled painfully to prepare a larger number of mobilized men over a shorter period.[7] The Ukrainian Commander of the Ground Forces, Colonel General Oleksandr Syrskyi, noted that Russian mobilized men who are now arriving at the frontlines are better trained than those mobilized men who had arrived at the frontlines immediately after Putin’s partial mobilization order on September 21.[8] The Kremlin took almost three months to prepare some of these units, while it prematurely committed other ill-prepared and poorly supplied mobilized elements to the frontlines. The Kremlin’s sham announcement of the end of mobilization call-ups on October 28 is also an indicator that the Russian MoD acknowledges that it lacks the capacity to sustain reserve mobilization and conscription simultaneously. The Kremlin’s force generation efforts remain contingent on its ability to invest time and supplies into its personnel, requirements that are badly at odds with the Kremlin’s lack of long-term strategic planning.

Igor Girkin, a former Russian militant commander and prominent critical voice in the Russian milblogger information space, returned to Telegram following a nearly two-month stint in Ukraine and used his return to offer a vitriolic first-hand account of the situation on the frontlines. Girkin posted on Telegram on December 6 to speak on his experiences in Ukraine for the first time since he announced he was leaving to join the Russian army to fight in Ukraine in October.[9] Girkin detailed his multiple and unsuccessful efforts to register and join various units and contentious interactions with Russian and Donetsk People’s Republic (DNR) commanders and noted that he finally joined a DNR battalion illegally, which allowed him to deploy to the Svatove area in Luhansk Oblast.[10] Girkin concluded that based on his experience on the frontline, it is clear that Russian forces are suffering from a “crisis of strategic planning” due to the fact that troops are relying only on tactical inertia and not cohering around a wider strategic goal.[11] Girkin also noted that the Kremlin will be unsuccessful in igniting protests in Ukraine with its missile campaign against critical energy infrastructure, further noting that winter weather will not stop Ukrainian forces from advancing.[12] Several other prominent milbloggers amplified Girkin’s story and conclusions, emphasizing Girkin’s past leadership role in hostilities in Donbas in 2014.[13] This scathing critique of the Russian military leadership from one of the most vocal and well-known figureheads of the hyper-nationalist information space, who has now reportedly acquired first-hand experiences of the nuances of frontline life, is likely to exacerbate tension between Russian military leadership and milbloggers and may reignite fragmentation within the ultra-nationalist community itself.

See the full report here.

The post ISW Russian Offensive Campaign Assessment, December 6 appeared first on Kyiv Post.

• Russia has recently started extending defensive positions along its international border with Ukraine, and deep inside its Belgorod region. On 6 December 2022, the governor of Belgorod announced he was establishing local ‘self-defence units’.
• Trench digging has been reported in Belgorod since at least April 2022, but the new constructions are probably more elaborate systems, designed to rebuff mechanised assault.
• There is a realistic possibility that the Russian authorities are promoting defensive preparations within internationally recognised Russian territory to burnish patriotic feeling.
• However, it probably illustrates some Russia decision-makers’ genuine (but false) belief that there is a credible threat of invasion by Ukrainian forces.
• Paucity in strategic assessment is one of the critical weaknesses in the central Russian government architecture: as highlighted by Russia’s original decision to invade Ukraine.
• Impartial official analysis is almost certainly frequently undermined by a tendency toward group-think and politically expedient conclusions.

The post British Defence Intelligence Update Ukraine – 07 December 2022 appeared first on Kyiv Post.

A series of daring drone strikes against targets deep inside Russian territory is sparking some delicate and very carefully worded diplomatic posturing on the part of Ukraine’s western allies.

Which strikes are we talking about?

On Dec. 6, a drone strike at an airfield in Kursk, Russia set an oil storage tank on fire. It was the third such attack in three days.

Prior to that on Dec. 5, explosions rocked two Russian air bases killing three people and damaging long range bombers, with local social media quick to blame kamikaze drones.

Who carried them out?

Officially, we don’t’ know. Unofficially, almost certainly the Armed Forces of Ukraine (AFU).

Kyiv never publicly acknowledges carrying out attacks inside Russia, but neither does it criticize or condemn them.

Asked about the latest attacks, Defense Minister Oleskiy Reznikov repeated a longstanding joke blaming such fires and blasts on the irresponsible smoking of cigarettes.

“Very often Russians smoke in places where it’s forbidden to smoke,” he said.

How did it carry them out?

This is the big question – Ukraine’s western partners have made a point of not supplying the country with long-range weapons that could attack targets deep inside Russia for fear of antagonizing the Kremlin.

This is why the U.S. is so keen to stress that the latest strikes were nothing to do with them, while at the same time, making clear it thinks Ukraine should be able to develop its own methods of striking inside Russia.

“We have neither encouraged nor enabled the Ukrainians to strike inside of Russia,” Secretary of State Antony Blinken told reporters on Dec. 6.

“But the important thing is to understand what Ukrainians are living through every day with the ongoing Russian aggression,” he said, accusing Russia of “weaponizing winter” through attacks on civilian infrastructure.

Blinken vowed “our determination to make sure that they have in their hands – along with many other partners around the world – the equipment that they need to defend themselves, to defend their territory, to defend their freedom.”

Experts believe Ukraine penetrated Russian airspace with simple Soviet-era drones.

Speaking next to Blinken after talks with their Australian counterparts, U.S. Defense Secretary Lloyd Austin said Washington was not stopping Ukraine from developing long-range missiles on its own.

“The short answer is no. We’re absolutely not doing that,” Austin said. “We are not working to prevent Ukraine from developing their own capability,” he said.

The U.S. declined to comment on a Wall Street Journal report that it had altered HIMARS sent to Ukraine – a rocket system seen as a game-changer on the battlefield – to prevent firing into Russia.

Why would Ukraine carry out these strikes?

Ukraine appears to be targeting Russia’s ability to carry out long-range missile attacks.

One of the strikes on Dec. 5 struck the key Engels airfield in the Saratov region, where Russia keeps some of its strategic nuclear bombers.

Ukraine says aircraft based at Engels are used to launch missiles at it from outside its territory.

For weeks, Moscow has rained missiles down onto Ukraine’s electricity and water supply infrastructure, ratcheting up pressure on the country’s civilian population as winter looms and power cuts leave vulnerable people exposed to the cold.

How has Russia reacted?

Russia is in a bit of a tricky situation – officials will be absolutely fuming that attacks are being carried out on its territory but will not want to make too much of a deal about it publicly as it tries convince the Russian public that everything is totally fine.

The Kremlin said that Russian President Vladimir Putin met senior officials on Dec. 6 to discuss “domestic security” and said that Russia was taking “necessary” measures to fend off more Ukrainian attacks.

Despite being the ones who launched the unprovoked invasion, Russian officials have repeatedly warned Ukraine’s western allies that they risk escalating the war by supplying weapons.

Earlier this month Russia’s Foreign Minister Sergei Lavrov, said: “You shouldn’t say that the U.S. and NATO aren’t taking part in this war, you are directly participating in it.”

What happens next?

Expect more strikes from Ukraine and more indignant bluster from Russia.

The post EXPLAINED: Why the US Denies ‘Enabling’ Ukrainian Strikes Inside Russia appeared first on Kyiv Post.

China announced on Wednesday the most sweeping changes to its tough anti-COVID regime since the pandemic began three years ago, loosening rules that curbed the spread of the virus but had hobbled the world’s second largest economy and sparked protests.

The relaxation of rules, which include allowing infected people with mild or no symptoms to quarantine at home and dropping testing for people travelling within the country, are the strongest sign yet that Beijing is preparing its 1.4 billion people to live with the disease.

Even though its borders remain mostly shut, citizens cheered the prospect of a shift that could see China slowly emerging back into a world three years after the virus erupted in the central city of Wuhan.

The announcement quickly soared to the top most viewed topic on China’s Weibo platform, with many people cheering the prospect of travelling, though some expressed worries about the greater potential for infections.

“It’s time for our lives to return to normal, and for China to return to the world,” wrote one Weibo user.

Analysts too, welcomed the shift that could reinvigorate China’s sagging economy and currency and bolster global growth.

“This change of policy is a big step forward,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “I expect China will fully reopen its border no later than mid 2023.”

The announcement came after President Xi Jinping, who regards China’s relentless fight against COVID as one of his main achievements, chaired a meeting of the Communist Party’s Politburo on Tuesday.

Cities across China were gripped by protests over tough COVID policies late last month, in what was the biggest show of public discontent since Xi came to power in 2012.

While those protests petered out in days amid a heavy police presence, cities and regions around the country started announcing a mish-mash of easing measures that fed expectations for Wednesday’s announcement.

Many of the steps taken by individual cities or regions were reflected in the list of policy changes issued by the National Health Authority on Wednesday.

Officials have also been softening their tone on the health risks of the virus – bringing China closer to what other countries have been saying for more than a year as they dropped restrictions, and shifted towards living with the virus.

Gu Xiaohong, a top traditional Chinese medicine official, was quoted in the state-run Beijing Daily on Wednesday as saying China should change its official name for COVID-19 to reflect the virus’ mutation and that patients with light symptoms could recuperate at home.

But the looser approach has set off a rush for preventative drugs as some residents, particularly the unvaccinated elderly, feel more vulnerable to the virus.

Authorities across the country have warned of tight supplies and price gouging from retailers in recent days.

“Please buy rationally, buy on demand, and do not blindly stock up,” the Beijing Municipal Food and Drug Administration was quoted as saying in the state-owned Beijing Evening News.

In Beijing’s upmarket Chaoyang district, home to most foreign embassies as well entertainment venues and corporate headquarters, shops were fast running out of some those drugs, according to a resident.

“Last night the medicines were already in stock, and now many of them are out of stock,” said Zhang, a 33-year-old educationist, who only gave his surname.

“Epidemic preventions have been lifted…COVID-19 testing sites are mostly being dismantled… So, because right now in Chaoyang district cases are quite high, it is better to stock up on some medicines,” he said.

The surge in demand has driven up share prices in medicine manufacturers including cough syrup producer Guizhou Bailing (002424.SZ), and Xinhua Pharmaceutical (000756.SZ), which makes 40% of all Ibuprofen sold in China.

China’s yuan has seen a recent resurgence against the dollar, buoyed by the prospects that government would relax its “zero-COVID” policy.

But the currency remains set for its worst year since China unified official and market exchange rates in 1994, as its economy has been battered by COVID curbs.

In further evidence of that, China’s exports and imports shrank at a much steeper-than-expected pace in November, data on Wednesday showed.

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South Africa’s Cyril Ramaphosa is weathering the worst scandal of his presidency thanks to the backing of his party, which is keenly aware its best hope of retaining power at 2024 elections is to keep him as leader.

Battered as his reputation may be by the “Farmgate” affair, Ramaphosa remains the most popular figure in the African National Congress (ANC) and the best placed to reverse last year’s municipal polls that saw the party’s share of the vote drop below half for the first time.

Ramaphosa’s job had been hanging in the balance after an inquiry panel appointed by the speaker of parliament looked into accusations that thieves had stolen large amounts of cash stuffed into furniture at his private game farm in 2020, and that he had failed to report the crime.

The theft raised questions about how Ramaphosa acquired the money and whether he had declared it.

Ramaphosa has denied wrongdoing and has not been charged. He has said the money was much less than the $4 million to $8 million reported, and that it was the proceeds of game sales at the farm.

At one stage local media said the president was close to quitting due to the allegations, claims his office denied.

The scandal has shaken the credibility of a man who narrowly won the presidential post in the African National Congress (ANC) party in 2017 on a promise to clean up endemic graft after a decade of corruption scandals under former president Jacob Zuma.

Zuma has denied any wrongdoing.

In a show of support for Ramaphosa, the ANC said on Monday it would tell its lawmakers to vote against adopting the report alleging misconduct when it comes up for debate on Dec. 13.

Before his ouster, Zuma had survived several no confidence votes in parliament after ANC’s lawmakers were told to rally behind him. His resignation come only after he lost support within the ANC.

Ramaphosa has the party’s backing, for now. ANC Treasurer-General Paul Mashatile said on Monday the decision was made in the best interests of the country and to secure stability, without elaborating.

A show of unity was needed ahead of the ANC’s elective conference starting on Dec. 16 to pick new party leaders in preparation for general elections in 2024.

Ramaphosa, seeking a second five-year term, received the most votes from branches of the ANC heading into the elective conference.

Trade union group COSATU, an alliance partner of the ANC, said calls for Ramaphosa to step aside were “premature”.

“It is only fair and just for him to be given an opportunity to read and dissect the report with his legal team to ensure that in the end justice prevails,” COSATU said.

Ramaphosa has challenged the panel’s findings in court.

The rand currency and government bonds weakened sharply last week after the report was made public and rumours that Ramaphosa was to resign followed. Markets have since stabilised.

“The market is still willing to give him benefit of the doubt,” Yvette Babb, an emerging market fixed income investor at William Babb, said, while independent Johannesburg-based analyst Marisa Lourenco said the bigger concern was that “someone could come in from the (Zuma) faction … and derail some of the progress that Ramaphosa has made.”

It seems likely Ramaphosa will contest the leadership of the ANC in national elections in 2024, which for the past three decades has decided who leads the country.

But he faces an uphill battle.

“Whatever happens to Ramaphosa … he will find it increasingly difficult to retain that corruption-busting credibility,” said Daniel Silke, director of Political Futures Consultancy. “Even if he escapes the worst.”

South Africa’s main opposition party, the liberal Democratic Alliance, has called for an early election while the far-left Economic Freedom Fighters (EFF) party has said Ramaphosa should stand down.

“Ramaphosa is fighting as if he has not done anything wrong,” EFF leader Julius Malema said on Monday.

Some analysts say Farmgate raises concerns only over his private business dealings: there has been no suspicion of the kind of public sector corruption that tainted Zuma.

The investigation into Ramaphosa’s conduct began after Arthur Fraser, a former spy chief in Zuma’s administration, asked police to probe alleged money laundering and corruption over the cash kept at his farm.

Political analyst Ralph Mathekga said the scandal had left many people confused as the probe is seen to have been orchestrated by Ramaphosa’s critics within the ANC, which has members who belong to a faction loyal to Zuma.

Civil society has also been quiet, in contrast to public efforts to push for Zuma’s ouster. This is “because by pushing for his resignation they will be completing the job started by a faction within the ANC”, said Mathekga.

Political analyst Ongama Mtimka said while there were rumblings of discontent on social media platforms, Ramaphosa had yet to push South Africans’ patience to the limit.

“It takes more than the existence of grievances, discontent, for South Africans to take to the streets,” said Mtimka.

“It always takes politicians who have their own agendas to mobilise people to take action.”

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