A pandemic smokescreen: self-isolation and semi-autarchy?

The current international crisis has brought the discussion regarding the topic of “peace and development” to the fore. However, the biggest dilemma is not the war in Ukraine and Moscow’s isolation but the domestic agenda and the state of China’s economy during the pandemic. From a global economic perspective, we are accustomed to seeing China as a “shareholder” in globalization. However, as a result of the trade war with the United States, the Chinese side has opted for a dual-circulation economy, i.e. a de facto increase in economic self-sufficiency while attempting to be less dependent on Western technological resources. It also allows China to ready itself for any future scenarios involving sanctions.

However, what looks good on paper may be more difficult to implement in reality. We know from the past that the policy of isolation has led to escalating tension as well as competition between local authorities for limited resources. How far along the plans are for compulsory self-isolation in economic sectors is open to question. Undoubtedly, it is puzzling that Prime Minister Li Keqiang, who is still responsible for economic development, assured the assembled press at the last Chinese National People’s Congress that no one “wants or can close the door”. If “closing the door” does happen then it will limit China’s cooperation with the developed world that assists in China’s technological development. The government may, however, be able to explain any deficiencies by utilizing different rhetoric. In fact, the central government’s zero-COVID policy may help to secure the central position of Beijing and Xi Jinping himself.

The policy of “zero tolerance for COVID” should be viewed as an experimental field for analysing the economy at the moment of being cut off from foreign markets and the possible upcoming global recession. This scenario could occur as a result of global sanctions being imposed by the United States and a more assertive European Union. This testing may be illustrated by the recent introduction of a full lockdown in cities such as Shenzhen, a city of new technologies and the location of Huawei and Tencent’s headquarters. However, it is the closing of Shanghai, causing massive disruption at ports and to value chains, which has made the headlines. The city may well have been a lab rat for testing the resilience of an economy facing sanctions.

It is worth noting that China’s political life is dominated by social mobilization campaigns that signal horizontal competition. The same is true when it comes to the country’s zero-COVID policy. For example, Jilin Province’s Propaganda Department has already announced that the province has won the “war” against the virus. But the victory was not declared by the local community but by the leadership of Xi Jinping. The absence of material incentives for the provinces in the peoples’ war against the “invisible enemy” allows the government to shift the basis for the inter-provincial competition from an economically driven to an ideologically motivated contest.

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President Xi Jinping and the Chinese elites are faced with a dilemma as to whether it is possible to continue policies based on Deng Xiaoping’s concepts of “peace and development” or if it is time for a sea change in policy. As we can see through reading the “People’s Daily”, a discussion is taking place between supporters of China’s opening up and supporters of a tougher anti-Western stance. The latter approach will lead to limited access to global resources and will be unable to meet the increasing needs of China’s growing middle class. Consequently, the question of what is more beneficial for the paramount leader remains open. 

But actions speak louder than words and Xi Jinping has turned to previously tried and tested political mechanisms such as mobilization campaigns. The political campaign of “zero-COVID” will ultimately lead to a change in the methods of horizontal competition which, may be based less on economic incentives as well as international cooperation and more on ideological competition in a partially closed economy. However, the aims of this competition remain the same. The competition at the lower levels allows the paramount leader to remain at the top and be seen as a benevolent, and fair ruler by Chinese society. Despite the discontent expressed by its citizens toward the zero-COVID policy, it is even more important for Beijing to have the ability to take the pre-emptive measure of isolating China before that decision is taken out of the country’s hands by sanctions imposed by the West. Both, discussion over “peace and development” as the major theme of the time, together with cross country lockdowns, signals China’s preparations for the global economic recession and political turbulences.