China’s Economic Reckoning
The Price of Failed Reforms
Two months ago, Chinese President Xi Jinping looked like he would emerge from the novel coronavirus pandemic with his legitimacy and his ambitions for Chinese global leadership in tatters. Today, as the Chinese government lifts its lockdown on the city of Wuhan, the epicenter of the outbreak, Xi can present himself instead as a forceful and triumphant leader on the world stage. Leaders in Europe and the United States are increasingly looking to China for help as they struggle to contain the virus in their own countries.
Few would have predicted such a reversal. China’s blundering initial response to COVID-19, the disease caused by the novel coronavirus, seemed destined to weaken Xi and the Chinese Communist Party (CCP). At first, authorities attempted to cover up the outbreak. A Wuhan physician named Li Wenliang warned of a deadly SARS-like disease in December, and the party ordered him to stop spreading “false comments.” Dr. Li died of COVID-19 in February, becoming a symbol that triggered mass mourning and anger at the government’s mishandling of the outbreak. With his legitimacy under assault at home and abroad, Xi backed out of the spotlight for a time and placed State Council Premier Li Keqiang in charge of the pandemic response. Pundits mused about China’s “Chernobyl moment” and speculated about a new era of political reform or even regime demise.
But over the last two months, China’s draconian containment measures have brought the disease under control. The government locked down the city of Wuhan, suspended intracity public transport, closed entertainment venues, and banned public gatherings. It rolled out aggressive testing measures and placed thousands of individuals deemed “high risk” in quarantine centers across the city. Because the hospitals were overwhelmed, many COVID-19 patients died at home (and as a result were probably not included in the official death statistics).
China’s blundering initial response to COVID-19 seemed destined to weaken Xi and the Chinese Communist Party.
When the virus continued to spread, the government extended the containment measures throughout the entire country, sealing off apartment complexes, villages, and entire cities and deploying security officers to enforce social-distancing measures. By late February, the number of new cases had begun to fall dramatically. On March 19, for the first time, Wuhan reported no new cases. By the end of that month, as many businesses in the West were struggling for survival, more than three-quarters of Chinese businesses had reportedly resumed operations. The World Health Organization praised China for “setting a new standard for outbreak control,” even suggesting that other countries should replicate its strict containment measures.
Many countries did not. Western Democracies, in particular, were slow to issue shelter-in-place guidelines and reluctant to lock down their economies. Now, as the death toll climbs steadily higher in Europe and the United States, Chinese officials claim that their “success” in containing the outbreak and Western countries’ ongoing “failure” to do so attests to the superiority of the so-called China model of one-party rule and a state-dominated economy. China’s war on COVID-19, according to one official Chinese media outlet, demonstrates the “powerful ability” of its political system to “rally, organize, mobilize, appeal, and act.”
Many liberal-minded Chinese intellectuals and officials had hoped that the crisis would lead to more openness and transparency. After the 2002–3 SARS epidemic, the government revised the Law on the Prevention and Treatment of Infectious Diseases to improve information flow and at least give the impression of greater transparency. But the coronavirus crisis has had the opposite effect. The public demands for reform after Dr. Li’s death appear to have alarmed Chinese leaders, prompting a crackdown on critical social media users and even more intense state censorship at government media outlets, some of which have been instructed not to cover the economic ramifications of the pandemic.
A triumphant Xi is now projecting his nation’s soft power abroad with “mask diplomacy.”
Chinese leaders have sought to deflect the blame for their initial mishandling of the outbreak. Foreign Ministry Spokesperson Zhao Lijian in particular has waged a disinformation campaign portraying the U.S. military as a potential cause of the outbreak. And the campaign appears to have been successful. The Chinese celebrity blogger Cui Yongyuan conducted an informal poll in which only 12 percent of nearly 10,000 Chinese respondents described COVID-19 as originating in nature. Conspiracy theories, coupled with propaganda portraying Western countries as incompetent, have fueled Chinese nationalism and bolstered the government’s legitimacy at home.
The Chinese government has turned the crisis to its advantage internationally, as well. A triumphant Xi, having evidently halted the COVID-19 epidemic at home, is now projecting his nation’s soft power abroad with “mask diplomacy.” He has sent test kits and personal protection equipment to 82 different countries, although there have been reports that some of the equipment has been faulty. And as of March 10, 25 Chinese provinces had proposed economic recovery packages worth $7 trillion, which will be used both to stimulate China’s domestic economy and to support the Belt and Road Initiative, Xi’s ultra-ambitious global development strategy that spans nearly 70 countries in Africa, Asia, and Europe.
In a remarkable turn of events, Xi has not only muddled through the crisis but emerged as a stronger leader at home and abroad. Arguably, he has succeeded because he was able to impose harsh restrictive measures that would be impossible to carry out in Western democracies. And as the death toll increases worldwide, Xi may face more international criticism for his government’s role in setting the pandemic loose—and for likely understating the number of infections and deaths in China. But as COVID-19 ravages one country after another, few can deny that China is fast becoming the safest place on earth. As John Allen of the Brookings Institution reminds us, history will be written by the victors of the COVID-19 crisis. And Xi looks like a winner, at least for now.