Skip to main content

Xi Jinping's coronavirus crucible


Japan Times

BY STEPHEN R. NAGY

The negative economic consequences from the virus outbreak, in addition to the economic punch the Chinese economy is taking from the trade war with the United States, will accelerate the shift of some businesses and foreign direct investment to Southeast and South Asia to create an alternative production network.

This is not good news for a regime that has bet its political life on the Faustian bargain that citizens will forgo political rights in exchange for a stable socio-economic environment in which their lives improve tangibly year by year.

The question for China watchers is whether Xi and the Chinese Communist Party will weather this viral storm and emerge strengthened from the crisis or whether Xi and the CCP will be damaged beyond repair, resulting in a cascade of unpredictable consequences for China, Japan and the world.

As of Thursday, Xi has responded forcibly to the COVID-19 crisis. At the national level, the response by Xi and the CCP, while harsh, has been responsive and necessary to prevent the epidemic from spiraling further out of control.

At the political level, local officials have already been replaced by Wang Zhongli, head of the Communist Party in Jinan, the capital of Shandong province. He has been appointed the new party chief in Wuhan, the center of the outbreak. Shanghai Mayor Ying Yong is replacing Jiang Chaoliang as party secretary in Hubei province, of which Wuhan is the capital. Both are close allies of Xi.

By placing long-standing and trusted allies in the epidemic’s epicenter, Xi is sending the strongest message to Chinese citizens that he and the party are not equivocating as to their commitment to quickly get control of this viral outbreak.

By quarantining entire cities, extending the Lunar New Year holidays and mobilizing all of the state’s resources to stem the spread of COVID-19 beyond the immediate epicenter, Xi and the party have gained some political capital with Chinese citizens. For many, it reinforces the narrative that a one-party system is the sole political system that can effectively marshal the resources to deal with a crisis of such magnitude.

The potential lesson for Xi and the party here is to double down on the centralization of power in order to steer China through the increasingly complex labyrinth of challenges it is going to face in the coming years and decades.

This narrative is becoming more difficult to maintain as holes are beginning to appear in the great fire wall that allows the Chinese state absolute control of the media, social media and the spread of information.

Savvy Chinese citizens are finding ways to critique not only the local response to COVID-19 but also Xi and the party themselves. Coded text referring to the mismanagement of the outbreak, prominent scholars such as Tsinghua University’s professor Xu Zhangrun’s releasing photos on social media (to avoid censors) of his hand-written critical essay titled “Viral Alarm: When Fury Overcomes Fear,” odes to the late whistleblower Dr. Li Wenliang, who died from COVID-19 after being forced to sign a policy document stating that he violated Chinese law and was guilty of “seriously disrupted social order” are the tip of the iceberg when it comes to displeasure as to how the COVID-19 epidemic has been handled.

Chinese netizens are even questioning why their government is spending huge amounts of money abroad in mega-projects like Xi’s signature initiative, the Belt and Road initiative, when their social welfare system is inadequate to manage the COVID-19 crisis.

The silenced majority in China are fully aware and resent the power consolidation that has occurred under Xi. They understand that the tangential link between the frozen decision-making process by Wuhan officials and the calamitous response to the outbreak is related to their fear of being targeted by Xi’s often politically motivated anti-corruption campaign.

There is also the economic shock that has come in the wake of the outbreak. The temporary shutdown of the economy has meant that the income normally generated during the Lunar New Year holiday plunged to record low levels.

Simultaneously, the quarantine of Wuhan and Hubei province, the home of an important automobile manufacturing hub for many global brands, new high-tech industries in places like Optics Valley, and high-tech industries (including opto-electronic technology, pharmaceutical, biology engineering, new material industry and environmental protection), has disrupted supply chains and, saliently, confidence in the China-centered global production network.

The high-tech sector and service sectors have also been negatively affected. Apple and other high-tech firms have shut factories, and retailers such as Starbucks have closed indefinitely or scaled back services. Crucially, both represent industries that current economy policies are focused on expanding as China transitions away from a manufacturing-heavy economy to a high-tech and service-based economy.

These disruptions seen alongside the increased costs of doing business in China associated with the U.S.-China trade war will accelerate the selective decoupling process that has been occurring.

This is consequential because once supply chains reconfigure to deal with the increased costs of doing business in one country or another, they rarely shift back. Those firms that shifted their supply chains prior to the “phase one” trade deal have not returned to China. We should not expect supply chains that shift in the wake of the COVID-19 epidemic to return to China either.

This has weighty consequences for Xi and the party. If supply chains shift away from China, so does the infusion of technological know-how that comes with foreign firms doing business in China. This would slow or impede China’s efforts to move up the economic-value chain and make it more difficult to achieve the Made in China 2025 strategic development goals.

More importantly, this consequential disruption in the China-centric global production model could derail the CCP’s twin goals of realizing “socialist modernization” by 2035 and building “a modern socialist country that is strong, prosperous, democratic, culturally advanced and harmonious” by 2049.

In the eyes of many in the global community, the rapid spread of COVID-19 in China has been largely linked to the deepening authoritarian rule under Xi and how that has eroded the decision-making process to respond flexibility and appropriately to local crises.

The likelihood that Xi and the party come away from the COVID-19 crucible unscathed is highly unlikely. Chinese citizens are already voicing their concerns about the fragile social welfare system, and, ironically, like the Hong Kong protests of 2019, there is a steady increase in demand for transparency, accountability and freedom of speech.

Xi and the party may be able to manage some of these demands in the short term. However, the real conundrum for Xi and the Chinese leadership is how to maintain stable economic growth as China faces an onslaught of downward pressures on the economy.

For Japan and other countries that have important economic relations and often political differences, with China, the COVID-19 epidemic is unsettling but it is also an opportunity to rebalance their bilateral relations with China.

Overdependency on trade with China, on Chinese tourists and on students has led to the real risk of having an economic portfolio that is too concentrated on one country and in this case, being uniquely vulnerable to a black swan event in China that can have serious economic consequences.

Japan and other states need an Indo-Pacific security and economic policy that includes China but is not solely focused on China. Working with middle powers and institutions such as Australia, ASEAN, India, Canada and others can help states both maintain a strong relationship with China but also a balanced one.

Stephen R. Nagy (@nagystephen1) is a senior associate professor at International Christian University and a visiting fellow with the Japan Institute for International Affairs.

Comments

Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.

A ‘European Silk Road’

publication_icon Philipp Heimberger ,  Mario Holzner and Artem Kochnev wiiw Research Report No. 430, August 2018  43 pages including 10 Tables and 17 Figures FREE DOWNLOAD The German version can be found  here . In this study we argue for a ‘Big Push’ in infrastructure investments in greater Europe. We propose the building of a European Silk Road, which connects the industrial centres in the west with the populous, but less developed regions in the east of the continent and thereby is meant to generate more growth and employment in the short term as well as in the medium and long term. After its completion, the European Silk Road would extend overland around 11,000 kilometres on a northern route from Lisbon to Uralsk on the Russian-Kazakh border and on a southern route from Milan to Volgograd and Baku. Central parts are the route from Lyon to Moscow in the north and from Milan to Constanţa in the south. The southern route would link Central Europe with the Black Sea area and