It may be a case of aligned incentives. A new virus occurs (even CCP does not know whether it is lab-leaked), and it is allowed to exist for some time (doctors arrested for spreading rumors). Definitely prefer incompetence to malice here, but maybe a decision was made to "sit back and assess" while the problem grew more serious.
Faking terroristic plots and blaming protesters is old hat, and the outcome of cracking down on the free territories while you still have the #2 Navy in the world are predictable. Hong Kong is not alone in desiring independence, and Beijing is not willing to lose face. A re-run of Tienanmen Square was starting to look inevitable. What if instead of that well-trod path of war, they chose to boost the poll numbers by allowing a crisis to occur and saving the day?
The cost of an economic slow down, well it's a risky calculus, but if the pandemic becomes global, they will not be left that far behind the competition. In fact, a totalitarian regime may be better-able to enforce health mandates and become productive again sooner.
What's more, USA was also dealing with a kind of dueling rebellion between BLM and Trump-Forever types. Perhaps the two agreed that the world needed a cooling-off.
/tin-foil