Jakarta, IO – After facing daring protests in big cities practically all over the nation, President Xi decided to loosen the Zero Covid policy imposed by the People’s Republic of China. It seems this is not simply to calm down protests, but also to address the issue of high unemployment and a meager standard of annual economic growth, at just 3.9 per cent for 2022. Double-digit growth is history, and now even single digits are on the low side.
It is possible that once the honeymoon period is over, President Xi must think more realistically about economic growth, the strength of the RMB and China’s standing as the world’s second superpower. We may see how this turns out earlier than otherwise. Xi already displayed a satisfactory performance during his meeting with President Biden in Bali last month; he will not allow that status to slip away, for sure. On the other hand, domestic economic problems cannot be put off, aside from persistently low growth in housing and property sectors, despite emergency measures like bank loans provided earlier to the sector. Economic growth may soon depend on domestic consumption, but this has not been growing either, as a result of the lockdown that seized up general economic activities; it is thus unrealistic to ask this sector to act as an engine of growth. It resembles a vicious circle that may only be broken via a “big push policy”. We should wait to see whether China will indeed introduce such a policy.
President Xi must bear the consequence for relying on his close, loyal associates and friends to fill the positions in the Party leadership as well as Government. He did not want to follow Deng Xiaoping, who pragmatically adopted a system of economy that worked for China, sometimes called “State Capitalism”, a protocol which, while recognizing the workings of a marketplace, saw the state still firmly in command. He is known for his dictum in this matter, saying “I do not care if it has black or white colour, as long as it catches mice, it is a good cat.” Or another leader after that, PM Zu Rong Ji, a pragmatic technocrat, former mayor of Shanghai that belong to a group of technocrats who contributed to the double-digit GDP growth for two decades in the eighties and nineties. Instead, President Xi only relies on his close friends and associates; that might not always be a proper fit in the positions that they have been awarded. With that he could maintain his grip, but to an obvious cost – as for instance in GDP growth of 3.9 per cent, high inflation, and unemployment rates, and weakening of the RMB, its currency. What more could be said, except that there is no such thing as free lunch.
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In the longer run, President Xi must also pay attention to the tendency of people who start to protest in public, not only about the zero Covid policy, but in the direction of free speech; that may still be just ripples at the moment, but this could reappear again and again, which could endanger his power. The fact that he basically acceded to the public demand on softening zero Covid policy, is in my view a good sign, that President Xi did not just crush them, even if he could have, the way it was done to the Uighur protesters. I do not know if the fact that currently there are no women in any important positions, whether in Party leadership or in the Government post, would also become an issue that could ignite public protest. There is no sign whatsoever now, but we do not know anything about the future.
Final note
If we look around to recollect lessons from the past, it is difficult indeed to find tips about what should be best to do for a leader in President Xi’s position. He worked hard to rise through the party ladder, from the bottom and finally reaching the top. It is understandable that once at the top he would like to hang on as long as possible. He was appointed General Secretary of China Communist Party for the third time, a position that even Mao Zedong, the Great Leader of China’s Revolution, did not have. I bet no one would dare say lightly that he should decline that position. And as General Secretary of the Party, one has power over everything – from politics, military, government and others. So, should he care about sharing this power with others? Of course, we do not have any sure answer. It all depends; the best one could say is “Probably”. Certainly, it is problematic as to what would be the best solution in this matter. I better stop here for now.