China. The end of the zero covid policy. Xi Jinping is cracking under the pressure of the people because it is not leading him anywhere

The “zero virus” policy was supposed to be proof of the Chinese regime’s superiority over the West. When ItaliansOr Germans, French or Americans who died by the thousands in crowded hospitals at the beginning of 2020, China They used their oppressive and undemocratic power and brutally forced people to stay in their homes. Beijing was winning: It was more effective in protecting its citizens from the new virus. Since “Zero Covid” seemed to be working, this policy was personally endorsed by Xi Jinping – that is, a good way to create the image of an infallible leader.

After 2.5 years, it turned out that the West had won against it COVID-19, producing effective vaccines and accurately predicting that the epidemic will not stop. Life is almost back to normal. Meanwhile, China is trapped with no way out: it has neither good vaccines nor group immunity, and it faces millions of deaths if it emerges from epidemiological isolation. Xi Jinping in October and November emphasized this The virus eradication policy is a success and will be maintained. A few weeks later, his words sounded like a joke, and the government cracked under pressure from the people and Officially announce a change to this policy. impeccable “Helmsman”, as Xi Jinping was called By willingly referring to the cult of personality from Mao Zedong’s time, he exposed himself to ridicule in front of the entire nation.

Although it seems trivial on the surface – what power has never changed its policy? – In China, it is a symbolic event for the conditions of the whole country. For decades, the Chinese accepted the oppressive power of the Communist Party in exchange for good governance and economic growth. As long as life gets better and better, there is no need to check who is in power and why. However, the “zero epidemic” policy, which ends in great failure, simultaneously strikes both of the two pillars on which the Chinese system is built: economic development and faith in the good governance of the party. For the first time in years, the Chinese people’s confidence in being a rising power that will soon dominate the world has been shaken. Because they saw that they were living in an open-air museum of the epidemic created by incompetent authorities. The spell breaks, and more problems created by this power emerge.

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The biggest of these problems is fitness Chinese economyWhich hasn’t been this bad in decades. Experts have been paying attention to her structural problems for years, which are getting worse all the time. It can be summed up briefly under four slogans: declining domestic demand, huge debts, over-reliance on foreign markets, catastrophically low fertility, and population aging. There is no doubt about it – China’s economic miracle, which lasted more than 40 years, is over, it is in the past.

– The situation is very difficult, because the growing structural problems of the Chinese economy, which experts have been pointing out for years, have been combined with extremely unfavorable external factors, – explains Lukasz Sarek, an analyst in the Chinese market. These unfavorable external factors include, above all, declining external demand and rapidly rising commodity prices, as well as growing political tensions, particularly in China’s relations with United States of America.

As the expert points out, the result is that “China’s exports have fallen sharply in recent months”. – In November alone, it fell by 8.7 percent, and the value of Chinese exports is lower than it was a year ago. Analysts say that this downturn is not the result of anti-epidemic restrictions, but rather a drop in global demand for Chinese products. Meanwhile, the rather robust exports have been in a trickle for China for years, “raising up” its economic performance. And he stressed that – weakening it narrows the room for maneuver for the Chinese leadership.

But the essence of the problem of the Chinese economy does not lie in the data coming from it, which are not yet so dramatic, but in the lack of an idea for the future. The Chinese economic model after four decades of “miracle” has simply vanished and the authorities have no prescription for how to deal with it. Xi Jinping hopes that this will make it possible to revive the internal market and reorient the economy from export-oriented to internal consumption-oriented. However, this plan appears to have failed.

Weak domestic demand. The authorities in Beijing have failed to make it the main driving force of the economy, which is not particularly surprising, given the fact that since the beginning of the pandemic, subsidies have been directed primarily at the supply side, rather than the demand side. There is no program to stimulate demand in the form of, for example, gift vouchers or large cash transfers for groups particularly affected by the effects of the crisis – explains Łukasz Sarek. There are no other ideas for the Chinese economy.

In the absence of serious economic reforms, which even Xi Jinping is too weak to implement, China is left to grab the razor and bail out the economy with taxpayers’ money. “In this case, Beijing may again resort to public sector investment as a primary tool for stimulating the economy, which, however, even if it has short-term effects, will exacerbate structural problems,” the analyst notes.

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And the economy is not just numbers, it is the real life quality of the Chinese people. Łukasz Sarek stresses that the difficult economic situation is remarkably translating into financial problems for families, and that the income of the Chinese is growing slower and slower. “In the first three quarters of this year, average disposable income grew by just 3.2 percent, just above inflation,” he said. In a country whose citizens are accustomed to 10% GDP growth, per year, that can be a shock.

Beijing has been bogged down by the difficult economic situation. When people took to the streets in an unprecedented outburst, the regime forgot the infallibility of its leader and began an official departure from the “zero Covid” policy. A policy that, according to some estimates, led to a decrease in China’s GDP by 2.2 percentage points in 2021, that is, it cost China $ 384 billion.

– The easing of epidemic restrictions will be a useful incentive to revive the activity of many sectors of the Chinese economy that have been particularly affected by the restrictions imposed – Łukasz Sarek admits. – However, it is not enough for China to return to the path of rapid economic growth. He stressed that the Chinese authorities have been struggling for years with unresolved structural problems, which have become particularly evident during the current crisis.

He also points out that with the Chinese not having immunity to COVID-19, easing restrictions could hurt the economy when there is a severe disease wave. And the number of COVID-19 cases in China is already rising to unprecedented levels. On November 29, the daily number of detected infections exceeded 71,000. For comparison, the number of infections in China is now about 10 times higher than it was at the peak of the epidemic in 2020.

Meanwhile, people took to the streets in November. Because despite the promises of growth, the economy is in recession, and despite the “non-epidemic,” the epidemic has not stopped. For the third year, the Chinese have been forcibly confined to their homes or lost their jobs overnight, while slowly realizing that the rest of the world is slowly forgetting about COVID-19. The growing frustration can be seen particularly among the young, who have been raised in increasing wealth, and now find it difficult to become independent.

– The youth unemployment rate is very high, in October it amounted to 17.9 percent and was slightly lower than in July, when it reached a record high of 19.9 percent – Lukas Sarek notes. Young people are a social group that is particularly sensitive to the effects of the economic downturn, as they are accustomed to living in relative prosperity, have high aspirations, and at the same time they are under pressure from their parents, many of whom depend on him. In China for earnings, it will pay off -.

It was thanks to the street protests of Chinese youth that the whole world witnessed. Not parting with their smartphones, after taking to the streets, they flooded the Internet with photos and recordings with a density that – it seems – exceeded the powerful Chinese censors. As if the Chinese system had enough problems, the Chinese managed to defeat one of its main tools of oppression and show their discontent to millions of other netizens. – As for China, the scale and manner of expressing discontent is huge and directed not only at the local authorities, who are a “lightning rod” of social discontent, but also at the central authorities and, in general, how the party manages to fight the epidemic – Łukasz Sarek admits.

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The consequences can be very dire. Especially since China, for the first time in decades, is no longer living out its belief in a better tomorrow. Today, Beijing is mainly warning of difficult times ahead and pointing to the multiplication of external threats. Instead of hope, the Chinese have begun to nurture fear – how shocking is this nation? In this context, street protests are not the real problem for Xi Jinping. The real problem is the lack of a prescription for the future and the gradual loss of faith of the Chinese people in his leadership. The failure of the “zero virus” policy may be a mistake for which the Chinese authorities will pay a lot.

See also: protests in China. The New York Times: Zero Covid Policy a Source of Public Outrage. Xi Jinping does not have a simple answer