Leaders 11I
t is oftensaid that China’sgovernmentplansdecadesahead,
carefully playing the long game as democracies flipflop and
dither. But in Shanghai right now there is not much sign of stra
tegic genius. Even as the rest of the world has reopened, 25m
people are in a citywide lockdown, trapped in their apartments
and facing food and medical shortages that not even China’s
censors can cover up. The zerocovid policy has become a dead
end from which the Communist Party has no quick exit.
It is one of a trio of problems faced by China this year, along
side a misfiring economy and the war in Ukraine. You may think
they are unconnected, but China’s response to each has a com
mon root: swagger and hubris in public, an obsession with con
trol in private, and dubious results. Rather than being the pro
duct of statecraft with the Yellow Emperor’s time horizon, Chi
na’s actions reflect an authoritarian system under Xi Jinping
that struggles to calibrate policy or admit when it is wrong.
This is the year for China’s president when everything has to
follow the script. In the autumn he is expected to use a fiveyear
ly party congress to launch a third term as its chief, in defiance of
norms that he step aside after two and opening a pathway to life
long rule. For this coronation to go smoothly, China must be sta
ble and successful.
In some ways Mr Xi has triumphed. The propagandists can
boast of a covid19 mortality rate that is the low
est of any big country, and an economy that has
grown by more than any other in the g20 since- As Europe descends into war, China
stands apart and secure, with a growing nuclear
arsenal and the muscle and money to project
power from the Pacific to the Caribbean.
Yet look closer and Mr Xi’s final year as a po
litical mortal betrays China’s weaknesses under
his rule as well as its strengths. Start with the pandemic. Since
the virus was detected in Wuhan, China has pursued a zerocov
id strategy. Its borders have been closed for two years and out
breaks are met with quarantines, coercive mass testing and
harsh lockdowns. Early on, China’s rulers decided on a giant
utilitarian experiment, leading to a largely covidfree life for the
majority, at the cost of forfeited individual liberties, pain for
those in lockdown and national isolation.
But the outbreaks are becoming harder to control (see China
section). In addition to Shanghai, five provinces have partial
lockdowns and Guangzhou has closed its schools. At least 150m
people are affected. Having granted autonomy to Shanghai to
manage its lockdown, Mr Xi has seized back control. And there is
no exit strategy. The party has not prepared the public for living
with covid and has failed to jab enough vulnerable old folk or use
more effective Western vaccines. The choice now is between a
redoubled vaccination campaign alongside an exit wave that
could, according to some models, kill 2m people, or indefinite
isolation and repeated curfews.
Those lockdowns are hurting growth, amplifying a botched
attempt to recast the economy. Mr Xi has called on Chinese cap
italists to become less predatory and more selfreliant. But in an
attempt to implement vague slogans such as “common prosper
ity”,zealousofficialshavereasserted state control and intimi
dated the most successful entrepreneurs. A onceglittering tech
industry is in intensive care, with the largest ten firms having
lost $1.7trn of market value after a barrage of regulations. The
bosses of Alibaba and Tencent are reduced to displays of cring
ing obedience and barred from expanding in some new areas. In
recent weeks the party has tried to reverse course. But global in
vestors are wary. Those ten largest tech firms are valued at a 50%
discount to their American peers.
In their place China hopes to create a loyal new generation of
startups that follow the party’s austere goals (see Finance & eco
nomics section). Registration documents point to tens of thou
sands of these firms being created in inland cities, which pur
port to be at the cutting edge of the cloud, robotics and artificial
intelligence. For now, patriotic investors are cheering them on
but many are duds or frauds tolerated by officials keen to meet
local development targets. A tech industry where the incentives
are subsidies and fear, and which is separated from an increas
ingly globalised system of venture capital (see Business sec
tion), is likely to fall behind the frontier of innovation.
The last problem involves Ukraine and foreign policy. Mr Xi
has sided with Russia, in keeping with his belief that the West is
in decline. Yet this stance has costs. It will further hurt relations
with America and Europe, upon whose markets
China relies. China hopes Europe can be prised
apart from America, but the war has revived na-
toand transatlantic cooperation in energy. It is
true that many countries do not want to pick
sides between the West and China and Russia
(see next leader). But China’s “wolf warrior”
diplomacy is backfiring, as foreigners balk at
the insults and threats issuing from Beijing.
Across rich countries, public perceptions of China are at their
worst for two decades. The same is true in some developing
ones, such as India, that fear Chinese aggression.
Underestimating China is foolish. Its centralised governance
allows vast resources to be concentrated on strategic tasks, from
building a navy to dominating the battery business. Public opin
ion can be mobilised. The sheer size of the domestic market lets
firms achieve economies of scale without leaving home—and
the potential pool of profits will always tempt global firms to be
present, and mercantilist governments to support them. The three regrets
These strengths remain. Yet China’s system of government is de
veloping new flaws as power grows more concentrated. Authori
tarian states can get things right but hate to admit when they are
wrong. The more Mr Xi’s status is officially exalted ahead of the
party congress, the more sycophancy there will be. When bu
reaucrats compete to demonstrate zeal, the administration be
comes less effective; if officials fear to speak up, the feedback
mechanism fails. A test of China’s longterm prospects is wheth
er it can change course. For now, if you think China’s ascent is in
evitable, look at the deserted streets of itsbiggest city, and ask
yourself if Mr Xi has a monopoly on wisdom.nXi Jinping is exhibiting poor judgment in an all-important yearWhat China gets wrong