On Wednesday, the Chinese government announced a reversal of a wide range of policies that have underlied its “zero COVID” approach to the pandemic. Following weeks of protests across the country, Xi Jinping’s regime will ease up on mass testing and try to limit quarantines and lockdowns. (The protests began after a fire in Xinjiang killed at least ten people, with citizens questioning whether harsh COVID-19 policies had hampered a rescue effort.) Xi’s new tack, while potentially defusing the protests and allowing more breathing room for China’s economy, will also likely lead to a significant COVID outbreak. (One recent model estimated a million deaths over the next few months.)
To talk about the protests and what comes next for China, I spoke by phone with Victor Shih, an expert on Chinese politics who serves on the faculty of the U.C. San Diego School of Global Policy and Strategy. During our conversation, which has been edited for length and clarity, we discussed whether the policy change was directly caused by the protests, how Xi has exerted control over the Chinese economy, and the complex calculations behind the government’s COVID strategy.
Were these policy changes announced because of the protests, or for economic reasons?
We don’t have a lot of detail. But, as far as some of us can piece together, there has been a debate among top-level leaders. And we definitely can see the debate among experts who advise the Chinese government on the degree of opening. For a long time, there has been a side which strongly advocated for the continuation of a “zero COVID” policy. But in recent months, even before the protests began, there were experts in the Chinese government who increasingly spoke out in favor of a more relaxed approach, emphasizing vaccination instead of draconian levels of quarantine. And I think the protests perhaps tipped things a little bit more in favor of the opening camp, or at least some degree of opening. It is unclear at this point how much opening there will be.
It really speaks to the challenge of authoritarian government, especially a kind of dictatorship that controls all forms of media, and has explicitly ordered the media to obey everything the government wants to convey. Sometimes even the Politburo itself does not get a lot of information about the level of satisfaction or dissatisfaction in the population. It took something like a multi-city protest to really make Xi Jinping realize that perhaps there is a groundswell of demand for a more relaxed approach.
Your answer implies a certain amount of debate on this, that it’s not just Xi making these decisions on his own. Is that how you see it?
At the highest level, among Politburo Standing Committee members, we don’t know whether there has been a debate. I suspect that there has been—not an open debate, but someone must have pushed some of this expert opinion to the Politburo level for the opening that we’re seeing to happen so quickly. Briefing material about why opening is potentially justifiable, and potentially not so disastrous for China, must have been there already or it wouldn’t have happened so fast after these protests.
I think that someone like Sun Chunlan, who is in charge of health policies in China, must have read a lot of this briefing material. Whether she was in favor of more opening to begin with is unclear. In fact, I think that may not be the case. It might have been someone else who has been advocating for more opening. The rumor is that Wang Huning, who’s a Politburo [Standing] Committee member, and has been an adviser to Xi Jinping since he took office, was or has been the person pushing for a more relaxed approach to COVID. But these are just rumors.
How do you understand the case for opening up more? I assume that this isn’t about concern over restricting people’s liberties, and that it’s more about the economy.
Yeah, I think the economy, employment for young people, and general dissatisfaction of the middle class, and upper-middle-class urbanites—those are all important concerns for the regime. Geopolitical competition with the United States and domestic social stability are two issues we know that Xi Jinping and the other leaders care deeply about.
Economically, the growth engines in China are investment, consumption, and export. Export has been doing O.K., although export is weakening as the United States demand for Chinese goods has weakened. But export for the past couple of years has really sustained growth in China. Because the rest of the world has been in partial lockdown ourselves, we’ve really had a very high demand for goods made in China, especially P.P.E. Investment has gone down quite a bit because of a deleveraging campaign in the real-estate sector, which has led to huge declines in real-estate investment. There has also been a slowdown in infrastructure investment because that is financed by the sale of land at the local level. Land is not selling.
On top of that, wave after wave of lockdowns have led to a dramatic decline in retail sales, and consumption, and really a lot of service sectors that employ a lot of people. These rolling waves of lockdowns have taken out the restaurant business, and this creates a lot of employment pressure. In urban China, the majority of young people and college graduates are not working in the tech sector. They either go into government or they go into some kind of service sector. The entire service sector has taken a huge hit because of the lockdowns. So, this widespread youth unemployment and the expectation of unemployment have led to protests even on college campuses, and that is something that China has not seen on such a scale since 1989.
How has the COVID era played into or shaped Xi’s broader economic legacy?
Certainly, his treatment of domestic business has led to a huge amount of damage to private entrepreneurship in China. Privately owned tech companies in China have had a decline in market valuation of close to three trillion dollars. That’s a big number. Xi Jinping’s perspective is that private capital is great as long as it makes China wealthier and also technologically more advanced. But if it becomes so big that it challenges the power of the Party, that is intolerable. Eventually, whoever was in charge of China would have clashed with the private sector in some fashion. But Xi Jinping really believed in the power of the Party, and he exercised it fully to rein in the private sector.
Until spring of this year, economically, the government’s COVID approach worked because of the strong export sector. Now, with the bigger opening of the economy, people who are infected can stay in home quarantine. That’s a big change from previous policies. Hopefully, economically that’s going to improve prospects. I suspect that it will to some extent.
As we know, because we’ve gone through it several times, the problem comes a month or two later. There will be a massive wave of COVID infections, and this means that there’s going to be a lot of people with heavy symptoms, and, inevitably, there will be some deaths—a lot more COVID-related deaths than what China is used to. Does Xi then reinstate a very draconian lockdown? Does he go to some partial level of lockdown, but push through with it? It’s unclear at this point. Right now, the optics are good. There’s an opening. People are a little bit more satisfied, a little bit less frustrated. For the next month or so, it’s going to be good. But when China does get this massive wave of infection and hospitalization, what is Xi going to do?
State propaganda is going to shape the messaging. But what we learned during these protests is that, privately, people have witnessed a lot of tragedy that has unfolded because of the lockdown policy.
Xi and the Party built a reputation on doing a better job on COVID than the rest of the world. What kinds of P.R. challenges, and public-health challenges, are they going to face when things get bad?
There are not that many intensive-care beds in China relative to its enormous population. Even in major cities, such as Beijing and Shanghai, this is kind of a problem. It’s an even more dire situation in some third-tier and fourth-tier cities, where the population is older, too.
In Hong Kong, we saw some hospitals reach their limits. They’ve had to set up beds outdoors. In China, the timing is not great. It’s winter. It’ll be pretty cold through March. With the more relaxed approach, we’re probably going to see a wave going into January, February. So, where are they going to put people? One possibility is that the quarantine facilities are going to be turned into makeshift hospitals.
But then the challenge is where they are going to find the doctors and nurses to take care of these people. It will produce some pretty negative optics. For the past three years, China has been very successful in controlling COVID, compared to the rest of the world. But now COVID will hit China.
If they’re smart, and I suspect that they are smart enough to do this, they will craft some kind of message, which they are already doing a bit, where they say, “Because the Omicron strain produces less severe symptoms and lower mortality, the needs of the future generation—job creation, economic growth—will be balanced with the interests of the older generation, who still are more focussed on not getting infected.”
Xi’s mind-set is unclear to me. He stuck to “zero COVID” because he was afraid of a huge wave of deaths. Now, apparently, the experts have convinced him that it’s not going to be so bad. But if these experts turn out to be wrong—not from a statistical sense, as I’m sure that the experts will be somewhat right statistically, but if it creates a lot of very terrible optics—then Xi may point fingers at somebody and reverse some of these policies.
You seem to be saying that Xi felt that he could not handle a big wave of death politically. Why is that? Leaders across the world from all kinds of different governments made different calculations.
Well, I think a lot of it comes down to his personal preference. He had consolidated power to a very high degree, even before the beginning of COVID. The need to domestically posture so that he could consolidate power even further—I don’t think that was a consideration for most policies. Of course, initially in 2020, he didn’t want COVID to spread uncontrollably because he may well have known that the medical capacity at the local level is very limited. If COVID spread uncontrollably in 2020, it would’ve led to a tremendous loss of life in China. Even as a dictator, even though he wouldn’t have lost power, it would’ve been terrible. It would’ve been terrible to the economy, to the labor force, etc.
On top of that, there was this bonus of a propaganda victory for China. Early on, the rest of the world, especially the United States, mishandled controlling COVID so badly that China could claim, “Oh, now China definitely has a governance model that the rest of the world can emulate, especially developing countries.” And China has made quite a bit of this. There was a lot of talk of the “China model,” of the Chinese policymaking process, which can be a model for the rest of the world. For Xi, that has been important.
Even going back to the Nineteenth Party Congress, and the Eighteenth Party Congress, Xi has said publicly that he would like China to enter the center stage of global affairs. And through much of COVID China was able to do that. Even though, weirdly, diplomatically, there wasn’t a lot of direct contact with other countries, because China was in total lockdown. Now Xi realizes that you do need to have some contact with the rest of the world. We’re seeing this big diplomatic blitz. But if the “China model” falters economically, that’s not good for China’s image. And if there’s a huge wave of COVID infections, that also would be a problem for him.
Were you surprised by how quickly, at least publicly, China backed away from its COVID policies? People I’ve talked to who know more than me seemed a little bit surprised.
I was surprised. There was this rumor that Wang Huning was advocating it for quite some time, but I never really believed in that rumor. I don’t really know if that’s the case. But it would take an advocate at that level to make it happen. There are two surprising aspects of this. One is that, in some places at least, we are seeing lockdown policies being liberalized very rapidly. And even in Beijing. My previous assessment had been “Oh, there could be relaxation in other parts of China, but certainly not Beijing, where the leadership lives.”
The other surprising aspect is that it happened so fast, which, as I mentioned, suggests that they had been preparing at least briefing material on it for quite some time. I think Xi himself must have said, “O.K., fine, just open, even in Beijing. We can open up, because I went around the world and I met with all these leaders around the world without a mask already. And I’m fine.”
Wait, you really think decisions are being made in those terms? You really think that—
Oh, of course. Yeah. No, of course.
Interesting. That also suggests that Xi was making decisions not just because of politics but also owing to his own feelings about COVID safety.
Yeah. That’s how policy, all policies, are made in China. Xi wakes up one day, and it’s, like, “Gee, what am I going to do today?” If he decides on something, it’s going to happen. For investors, for people who are dealing with China, the problem is that you just don’t know with that much certainty what he’s going to do from one day to the next, because he can change his mind completely. Or stick to it.
You mentioned Wang Huning. Why does he have such influence?
That’s a big mystery. It’s unclear. He was, of course, an adviser to Jiang Zemin, and then later to Hu Jintao. But he was not given a political rank until the Xi Jinping period. He’s always been kind of a think-tanker, vice-ministerial level, ministerial level, not especially powerful. But then, with the rise of Xi Jinping, he was made first a Politburo member, which is already a very high level for a think-tanker like himself, and then, at the Nineteenth Party Congress he was promoted into the Politburo’s Standing Committee, which really has not happened to an intellectual. Remember, he started his career as a professor. I always joke to my students that he’s the most powerful professor in the world, which is true, actually. And it’s a big mystery why he was given the political rank. He is trusted. I think one reason why he’s trusted is that he has no political ambition of his own. And that’s very clear, because he doesn’t try to cultivate followers. You don’t see him cultivating dozens of followers into important positions.
He clearly does not play that game. If Xi wants to demote him, promote him—I doubt that he’s lobbying on his own behalf at all. So you can trust him to give relatively objective opinions, because he doesn’t have any political ambition of his own. In this case, I suspect that it would take someone like him advocating for a big change of policy for Xi to say, “O.K., because I think this person doesn’t have mixed motivation, I trust him. I will go ahead and revise policies.” Something like that.
It may have been smart to announce the policy changes this week, because it showed a willingness to adapt, which authoritarian countries are often criticized for not doing. At the same time, I wonder if there’s any long-term risk of Chinese citizens now thinking that protests can deliver results. It’s obviously inspiring for people who hope that there’s political change in China. But I’m curious how you think the government will view that, and if they might think of it as a threat?
That definitely will be a risk for the Chinese government. They are now studying very intensively how people learned about the activities of fellow-protesters in other cities, which is something that they have tried very, very hard to prevent for years and years. Over time, over the course of half a day to a day, they can stop it. They can censor it. Because machine learning can learn, so to speak, when protest-related messages are being spread. But not within minutes. These things are happening in real time. People are seeing protesters in Shanghai and other cities, and they just immediately decide that they’re going to have a protest in their own city. So, the government is studying very intensively how to stop that from happening in the future. That’s going to be challenging. But I do think that, from the protesters’ perspective, this was a huge revelation.
You have to remember that most people in China have not even thought about a politically oriented protest for three decades. They had almost forgotten that such a thing was possible. And, as you pointed out, what these protests have shown is that it is possible, even when your demands are very political, even demanding for systemic change. There will be repercussions, but others will join you. For the longest time, there has been this kind of prisoner’s dilemma, where no one is willing to voice their true opinion. This time, people were willing to do so. And a lot of people joined in. Now that the protesters know sympathizers are out there, they’re going to be much more willing. Even the people who are being detained right now get let go at some point. They’re going to do it again when the next crisis emerges. I think we will see more frequent protests, with political demands, across cities, which is something that we haven’t seen since 1989. ♦