Pandemic, war in Ukraine and economy: why China is making a mistake

Many say that when the rest of the world acts without thinking, China thinks ahead. Think strategically and take the long way. However, the “zero COVID” policy seems to be proof that their plans are not working.

China's zero-tolerance approach to COVID-19, which prescribes quarantine for anyone who tests positive even in the absence of symptoms, is increasingly strained by the highly infectious, though less deadly, Omicron variant.

Politics has halted almost all international travel and is taking an increasing economic toll as cities impose restrictions, with southern Guangzhou and eastern Ningbo being the last to do so, even as other countries try to live with the disease.

The situation in Shanghai is particularly worrying. The measures take a toll on the population and tension reaches social networks, where videos are shared of residents' fights with toilets, lack of food during quarantines or the abuse and cruelty slaughter of pets of isolated people, and where the effectiveness of confinements is being questioned.

Many of Shanghai's 25 million residents seem tired of the triumphalist speeches of the ruling Communist Party, and they pour their fury on social media in the face of food shortages, restrictions and excessive zeal on the part of the authorities.

“It's one of a trio of problems facing China this year, along with a failing economy and the war in Ukraine,” reads an analysis of The Economist in its Leaders section. “You may think they are not related, but China's response to each one has a common root: arrogance and arrogance in public, obsession with control in private, and dubious results. Rather than being the product of the Yellow Emperor's art of ruling with the time horizon, China's actions reflect an authoritarian system under Xi Jinping that struggles to calibrate politics or admit when it is wrong.”

The report explains that this is the year for the president of China in which everything has to follow the script. In the fall he is expected to use a five-year party congress to launch a third term as its leader, challenging the norms that he stands aside after two and opens the way to a lifelong government. “For this coronation to go smoothly, China must be stable and successful.”

According to this publication, Xi has somehow triumphed, and “propagandists can boast of a COVID-19 mortality rate that is the lowest in any large country, and an economy that has grown more than any other in the g20 since 2018. As Europe descends into war, China remains on the sidelines and safe, with a growing nuclear arsenal and the muscle and money to project energy from the Pacific to the Caribbean.”

However, the great weaknesses of this system are better seen up close.

The problems with the pandemic

Its borders have been closed for two years and outbreaks are faced with quarantines, mass coercive tests and severe lockdowns. “At first, China's rulers decided to conduct a giant utilitarian experiment, which led to a largely COVID-free life for the majority, at the cost of loss of individual freedoms, pain for the locked up and national isolation,” says The Economist.

But outbreaks are increasingly difficult to control, and in addition to Shanghai, five provinces have partial closures and Guangzhou has closed their schools. At least 150 million people are affected: “The party has not prepared the public to live with COVID and has failed to vaccinate enough vulnerable elderly people or use more effective Western vaccines.”

Economic resentment

On Monday, the European Chamber of Commerce in China said it sent a letter to China's Council of State or Cabinet, describing the challenges for businesses due to recent COVID prevention measures and urging the country to review the policy.

The data also showed that car sales in China plummeted in March as the country's restrictions to curb COVID-19 outbreaks took their toll, with Tesla Inc (TSLA.O) among automakers feeling the pain of limits on production.

Xi has called on Chinese capitalists to become less predatory and more self-reliant. “But in an attempt to implement vague slogans like 'common prosperity', zealous officials have reaffirmed state control and intimidated the most successful entrepreneurs,” says The Economist. “A once brilliant tech industry is in intensive care, and the ten largest companies have lost $1.7 trillion in market value after a barrage of regulations. The bosses of Alibaba and Tencent are reduced to displays of creeping obedience and are prevented from expanding into some new areas. In recent weeks the match has tried to turn back. But global investors are cautious. Those ten largest technology firms are valued at 50% off their US peers.”

With the war in Ukraine, China has taken the wrong side

The last problem involves Ukraine and foreign policy. “Xi has sided with Russia, in keeping with his belief that the West is in decline. However, this approach has costs. It will further damage relations with the United States and Europe, on whose markets China depends. China hopes that Europe can be appreciated apart from the United States, but the war has revived NATO and transatlantic energy cooperation,” the publication says.

“It is true that many countries do not want to take sides between the West and China and Russia. But China's 'wolf warrior' diplomacy is failing, as foreigners resist the insults and threats emanating from Beijing. In rich countries, China's public perception has been at its worst for two decades. The same is true in some developing countries, such as India, which fear Chinese aggression,” he says.

So China's system of government is developing new flaws as power becomes more concentrated: “Authoritarian states can do things right, but they hate to admit when they're wrong. For now, if you think China's rise is inevitable, look at the deserted streets of your largest city and ask yourself if Xi has a monopoly on wisdom.”

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