Covid, Russia and Economy Put the ‘China Model’ to the Test

A year ago, while many countries were still reeling from Covid-19, China seemed to be one of few places prospering through the pandemic. It was also the only major economy that reported growth in 2020. Global investors were bullish on Chinese stocks even as Beijing’s regulatory crackdown on its private sector became more like a political campaign.

That led some people in China to argue that its one-party authoritarian rule offered a compelling alternative to traditional liberal democracy. The United States was declining politically and economically, they said, and the world was “gravitating toward China.” Many Chinese cheered the narrative online.

A year later, the tone within China is more one of anxiety, anger and despair. In the past month, hundreds of millions of people there have struggled under lockdowns as coronavirus outbreaks spread across the country. Foreign investors are dumping Chinese stocks over geopolitical, regulatory and pandemic uncertainties. And the government’s support of President Vladimir V. Putin of Russia as he wages war in Ukraine has risked the world’s criticism, and potentially sanctions.

It’s all leading to increasingly anxious questions about the country’s path — and even about whether too much power has been concentrated in the hands of the country’s leader, Xi Jinping, who is seeking a third five-year term at the Communist Party congress late in the year.

More Chinese are questioning whether Xi Jinping has consolidated too much power and focused too much on rivaling the United States. Credit…Sam McNeil/Associated Press

On social media, a growing number of citizens are accusing the Communist Party of breaching its social contract with the people. They had tolerated, and sometimes praised, one-party rule in exchange for economic growth and social stability. But its stringent lockdown measures, which are straining entire cities, and its regulatory crackdowns are costing many of them jobs and income and leaving their futures looking much more uncertain and gloomier than a few years ago.

After one official newspaper, Guangming Daily, published a commentary about the government’s persistence in pursuing its “zero-Covid” policy, which has led to harsh and unpredictable lockdowns, users on the social media platform Weibo posted nearly 10,000 comments, with the vast majority urging the government to end the strategy. “Please read these comments. Please look at the lives of ordinary people,” wrote a user called Diqiuren1990. All the comments disappeared the next day after the commenting function was disabled.

After the Chinese ambassador to the United States wrote an opinion piece for The Washington Post about China’s position on the Russian invasion of Ukraine, tens of thousands of social media users on WeChat rushed to post comments on a Chinese translation. The vast majority of those posts criticized China’s position, which is pro-Russia under a veneer of neutrality. “There’s no neutrality in the struggle between justice and evil,” one comment said. “Straddling between two boats will only end up in falling in the water.” All of those comments ended up censored, too.

And a viral video with the headline “The demise of China’s glory and dream” lamented the disastrous impact of the government’s crackdowns on the private sector. It was liked by many of the country’s top investors, scholars and entrepreneurs, including a co-founder of Tencent, China’s biggest internet company, who had left the company. The video has been deleted.

Quarantine workers in Shanghai after the city was locked down in mid-March.Credit…Qilai Shen for The New York Times

In private, some academics and businesspeople are discussing growing concerns about Mr. Xi’s focus on rivaling the United States and proving the viability of the Chinese political model — a focus that some worry has become an obsession.

The competition between countries, Mr. Xi has said, is ultimately competition between political systems. The handling of the pandemic “made it evident which country’s leadership and political system is superior,” he told top cadres in January 2021. “Time and momentum are on our side.”

Chinese citizens have to be extremely careful in criticizing Mr. Xi, some of whose critics have been sentenced to as much as 18 years in prison. So some are resorting to quoting former top leaders to express their frustration that Mr. Xi has stepped away from the proven path of reform and opening that provided the country with decades of prosperity.

Some quoted the country’s former paramount leader Deng Xiaoping as saying the two countries that had benefited the most from invading China were Japan and imperial Russia, and to a certain extent the Soviet Union — a roundabout way to say China should distance itself from Russia.

They shared images of former President Jiang Zemin sharing a dance with Bernadette Chirac, the wife of France’s former president Jacques Chirac, in 1999. Those were the days when China was more popular in the world.

They quoted former President Hu Jintao’s famous instruction that China should “avoid self-inflicted setbacks,” which one Chinese diplomat interpreted as avoiding political campaigns like the Cultural Revolution that threw the country into chaos and destitution. Quoting that in the current context amounts to a not-so-indirect criticism of Mr. Xi’s ruling style.

They even used the Soviet Union as an example to prove the peril of dictatorship. A modern nation “should have the system to prevent one person from taking the whole nation over the precipice,” according to one article posted on WeChat, the social media platform.

The public’s pent-up anger is not likely to be enough to sway Beijing’s decision-making or to threaten the rule of the Communist Party, which is accustomed to keeping people in line by using indoctrination and intimidation. But it marks a departure from the heavy silence that has prevailed under Mr. Xi’s rule.

Two years ago, China celebrated the merits of its top-down ruling approach by pointing to its success in building a new hospital in just 10 days in Wuhan and containing the spread of the coronavirus in three months. Today, many people view the makeshift quarantine centers as a symbol of Beijing’s stubborn insistence on a costly coronavirus policy that seems to mainly serve the purpose of proving the superiority of its system.

The country’s unforgiving pandemic control measures are being called the “white terror,” a nod to the vast army of neighborhood workers who wear white hazmat suits. People have shared videos and photos of protests in which demonstrators chanted, “We need to work!” and “We need to eat!”

The Russia-Ukraine War and the Global Economy

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Rising concerns. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes. The conflict has already caused​​ dizzying spikes in energy prices and is causing Europe to raise its military spending.

The cost of energy. Oil prices already were the highest since 2014, and they have continued to rise since the invasion.  Russia is the third-largest producer of oil, so more price increases are inevitable.

Gas supplies. Europe gets nearly 40 percent of its natural gas from Russia, and it is likely to be walloped with higher heating bills. Natural gas reserves are running low, and European leaders worry that Moscow could cut flows in response to the region’s support of Ukraine.

Food prices. Russia is the world’s largest supplier of wheat; together, it and Ukraine account for nearly a quarter of total global exports. Countries like Egypt, which relies heavily on Russian wheat imports, are already looking for alternative suppliers.

Shortages of essential metals. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.

Financial turmoil. Global banks are bracing for the effects of sanctions intended to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.

Some commenters said that Beijing had wasted its early success in pandemic control because it believed that its political will alone would suffice to beat the virus. They questioned why the government hadn’t spent the huge resources it deployed in mass testing and quarantines on a vaccination drive, especially among older people. They asked whether Beijing was irresponsible in not approving the more effective Western vaccines for the sake of national pride.

A Covid testing site in Beijing. Online commenters have called for an end to China’s “zero-Covid” strategy, saying it cost them income and security. Credit…Ng Han Guan/Associated Press

Many accused the government of failing to see the huge sacrifices that businesses and individuals had to make, or complained that people were struggling to get by and falling behind on mortgages and other personal loans. They were angry that some people had died of heart attacks, asthma, cancer and other diseases because hospitals turned them away under Covid restriction guidelines.

“As long as you don’t die of Covid, you can die of any cause,” goes a viral online quip.

Beijing remains unwavering in the face of public resentment.

“In the past two years, China has fully demonstrated the significant advantage in its political system and its strong national capacity in containing the pandemic,” read a commentary in the state-run People’s Daily newspaper on Monday. The zero-Covid policy is a “line of defense that a nation of 1.4 billion people will have to hold,” it said.

Beijing also seemed to have dug in its heels on supporting Russia by running a series of official commentaries that blamed U.S. hegemony for the war in Ukraine. On Tuesday, a commentary in the People’s Daily called the United States “the initiator” of the war, which it called a “crisis.” On Wednesday, another commentary on the same page said the United States was “adding oil to flames” by providing military assistance to Ukraine and imposing sanctions on Russia.

That’s troubling for many people who are worried that Beijing’s pro-Moscow stance could accelerate China’s decoupling from the West, or even lead to Russia-like sanctions that would have huge implications in technology, trade and capital markets.

“Is it good or bad if China is cast on the same side of the Iron Curtain as Russia?” the nationalistic writer Wang Xiaodong asked his followers on Weibo. His conclusion: China should try its best to avoid the scenario because it would have to pay an extremely high price.

The only policy area that Beijing has relented on somewhat has been its regulatory crackdowns on the private sector. After a heavy sell-off of Chinese stocks in mid-March, China’s economic czar, Liu He, urged government agencies to roll out market-friendly policies and to show caution in introducing any measures that risked hurting the markets.

But China’s political-campaign-style regulatory crackdown has done its damage. Mass job cutting, once rare in China, is happening in tech, real estate, education and online games, some of the industries that were hit the hardest by the crackdowns. Posts about unemployment are shared widely as a gloomy sentiment grips the educated middle class.

“Standing at this historic turning point, we look back to the Golden Age,” read an online post about China’s four decades of economic transformation and dreams of individual prosperity. “We all thought it would be our future,” it said. “It turned out to be an illusory dream.”

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