4
Through this struggle against the epidemic, we are even more convinced that with the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, the remarkable advantages of the socialist system with Chinese characteristics, the abundant comprehensive strength created and accumulated since the founding of New China, especially over the 40 years of reform and opening up, and the unity and struggle of the whole Party, the whole army and the people of all nationalities, we will certainly be able to overcome all risks and tests.
—Editorial, People’s Daily, September 8, 20201
On 22 May, Chinese Premier Li Keqiang stepped up to the podium inside the Great Hall of the People to deliver his Government Work Report. Since 1998, each year, the meeting of the National People’s Congress (NPC), China’s top legislature, had been held in early March. The outbreak of the COVID-19 pandemic, however, had forced an unprecedented delay in 2020. Given the unpredictability surrounding the pandemic and the opacity of Chinese politics, the decision to hold the meeting was being viewed as an important marker of the leadership’s confidence in its ability to control the outbreak.2 Another marker on the day was the attendance of 2,897 lawmakers, or deputies to the NPC, who had travelled to Beijing from around the country. While each of them sat with their faces covered, the Party’s top leadership lined the front rows, devoid of masks. Li began his speech by outlining not just the Party line about the pandemic but also the twin challenges that the leadership faced going ahead.
The COVID-19 epidemic is the fastest spreading, most extensive, and most challenging public health emergency China has encountered since the founding of the People’s Republic. Under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at its core, and through the hard work and sacrifice of our entire nation, we have made major strategic achievements in our response to COVID-19. At present, the epidemic has not yet come to an end, while the tasks we face in promoting development are immense. We must redouble our efforts to minimize the losses resulting from the virus and fulfill the targets and tasks for economic and social development this year.3
The strategic target that Li had in mind was the elimination of absolute poverty—a crucial political imperative that had to be achieved by any means necessary at the end of 2020. In fact, in early March, Xi had made it clear that regardless of the pandemic, the Party would ensure that this goal of poverty alleviation would be achieved.4 In order to do that, China would have to return to a positive growth trajectory—for even the most incredible of propaganda must be rooted in a semblance of fact for it to be effective. This, of course, is not to dismiss China’s remarkable achievements in alleviating poverty over the past four decades, but rather to underscore the political nature of such targets and the narrative significance of having achieved them. Consequently, it was critical for the Party leadership to take steps to kick-start the economy, ensure money flow and stimulate employment generation. In order to do any of this, however, it was first important to contain the spread of new infections and outbreaks.
Containing the Threat
With the domestic epidemic situation, largely limited to Hubei, beginning to stabilise towards late March, the Chinese government increasingly began fretting about the threat of a second wave. On 26 March, the central government imposed restrictions on foreign travellers.5 The New York Times described these as among ‘the most comprehensive international travel bans imposed anywhere in the world’.6 The policy was quite the hypocritical turnaround, considering how Beijing had lashed out at other countries curbing flights to and from China in February.7 But this decision was not entirely unexpected.
Over time, daily official reporting of infections by Chinese authorities had begun categorising cases as domestic and imported, with the latter showing a rising trend. While Wuhan opened in early April, infections continued to spread across many other Chinese cities. Among the worst of the outbreaks reported in April was in the northeastern city of Harbin in Heilongjiang province. Chinese media attributed the outbreak there to an imported case.8 In response, local authorities ordered a 28-day quarantine for all arrivals from abroad, with two rounds of nucleic acid tests and an antibody test for each individual.9 Likewise, a 28-day quarantine was announced in parts of Inner Mongolia after an outbreak. What was noteworthy about these measures was that the Chinese leadership appeared to be responding even to small clusters of infections with heavy-handed shutdowns. For instance, Harbin was locked down with a cluster of less than 100 cases. More than 4,000 people were subsequently traced and screened in a short span of time. Similarly, in May, small clusters of outbreaks were reported in different parts of the northeastern province of Jilin. In response, the central leadership took control by sacking local officials, imposing strict lockdowns, mobilising grassroots cadre and conducting mass testing campaigns.10
These instances offered a glimpse into the Chinese model of virus control, which The Economist described as a combination of ‘brute force (breaking transmission chains by preventing Chinese people from meeting others, if need be for weeks) with high-tech surveillance and contact tracing’.11 At the same time, cities and towns across the country were also conducting mass testing, with the hope of containing infections and enabling reopening.12 For instance, through the month of May, city officials carried out mass testing in Wuhan to cover the entire population of over 10 million people.13 The use of the Close Contact Detector app and health code systems were other key components of the Chinese model. The former, jointly developed by government agencies and the China Electronics Technology Group Corporation, was launched in early February.14 The latter followed quickly on Alibaba’s Alipay and Tencent’s WeChat platforms and were rapidly put in use across hundreds of Chinese cities.15
In early May, at a meeting of the leading group to deal with the epidemic, Li Keqiang emphasised the need to ‘consolidate the results of epidemic prevention and control’ and ‘resolutely prevent a rebound’, while calling for continued yet gradual reopening of schools and businesses.16 The strategy appeared to be delivering results, with some semblance of normalcy returning across large parts of the country. Yet, just a few weeks after Li’s NPC speech, the local government in Beijing announced the closure of the city’s largest wholesale food market, amid reports of infections.17 These were eventually attributed to a batch of imported salmon.18 Located in the Fengtai district, the Xinfadi market supplies much of Beijing’s vegetables and fruits. It had resumed operations in mid-April after a lengthy lockdown. Since then, the Chinese capital had been free of any COVID-19 infections for nearly two months.
In fact, ever since the outbreak in Wuhan and Hubei, the Chinese leadership had taken several steps to ensure that the country’s capital remained free from infection. A Wuhan-like outbreak in Beijing would not just be symbolically embarrassing but also a blow to the Party’s, particularly Xi’s, aura of control and authority. The June outbreak in Beijing appeared to catch the leadership by surprise. A day after the Xinfadi market was closed, Sun Chunlan led a meeting of the State Council’s epidemic control mechanism, warning that the risk of infections spreading was high. She called for enhancing testing capacity along with stringent controls and comprehensive source and contact tracing.19 Barely two weeks after it had been lowered, the city’s alert level was once again raised to the second highest in the four-tier system. What this meant was that residents in high-risk locations faced strict lockdowns, while those living in medium- to high-risk areas were barred from leaving the city.20 Public gatherings and group activities were suspended.21 People entering Beijing, meanwhile, would have to undergo mandatory testing. Local officials described the situation as ‘grim’, emphasising that the city was in ‘wartime mode’.22 Cai Qi, the Party Secretary of Beijing, is believed to be close to President Xi Jinping. Consequently, a failure on the part of the local government could likely have led to political consequences in the context of the shadowy factional contests that play out within the Party.
However, the tide began to turn rather quickly. By 24 June, official data showed that around 3.2 million people in the city had been tested.23 It is important to note that these steps were adopted while the city had a total caseload of just 256 infections between 11 June and 24 June.24 By early next month, the outbreak had been effectively contained, with the city reporting no new cases of infections as of 7 July. Pang Xinghuo, deputy director of the Beijing CDC, informed at the time that the city had tested more than 11 million people.25 That’s roughly half of Beijing’s population. Ten days later, Wu Zunyou, chief epidemiologist from China’s CDC, told the media that the outbreak in the Chinese capital had basically been brought under control.26 In the end, the Xinfadi cluster led to merely 335 infections and no deaths, according to official records.27 The market, meanwhile, resumed partial operations by mid-August. State media and Chinese commentators leveraged the moment to argue that Beijing’s experience had shown that ‘if prompt, strict and effective measures are taken, near normalcy can be restored in a couple of months’.28
Stabilising and Stimulating
In fact, from fairly early on, even while the situation in Wuhan remained precarious, the Party leadership had started talking about the need to focus on balancing epidemic prevention with work resumption to restore normalcy. In the first week of February, Li had called on businesses in Hubei to resume operations.29 By mid-February, the State Council Leading Group Office of Poverty Alleviation and Development issued a circular clearly stating that the battles against poverty and the epidemic ‘are major political tasks requiring equal attention’.30 This meant that work resumption would have to be prioritised. At the same time, the government introduced a set of short-term measures, including tax rebates, easing the cost of financing for enterprises, reducing social security costs31 and permitting small- and medium-sized enterprises to delay loan repayments.32 The central bank also set up a special fund of 300 billion yuan (around US$ 43 billion) to provide targeted support to suppliers of key healthcare-related resources needed to combat the virus.33
All of this came as indicators hinted at a record slump in economic activity, with the threat of rising unemployment and anger at the Party’s early failures in epidemic control potentially undermining social and political stability.34 In late February, Xi addressed over 1,70,000 cadres via teleconference.35 He emphasised that the ‘epidemic situation remains grim and complex’ but still ‘efforts should be made to fully unleash the huge potential and powerful driving force of China’s development and strive to achieve the goals and tasks for economic and social development’.36 In order to do this, the Party leadership appeared to be moving towards adopting differentiated strategies across regions to ensure gradual reopening while containing the spread of infections.37 Earlier in the month, the State Council had issued guidelines calling on low-risk regions to resume full production, while those deemed at higher risk were asked to monitor the health situation first. There was also a coordinated effort to get the millions of migrant workers back to factories.38 These, of course, hit multiple roadblocks. But what was important was that this effort began rather early. At the same time, local governments across the country announced large-scale, mostly government-led infrastructure projects.39 The State Council, for its part, promised to expedite the issuance and utilisation of local government special bonds and accelerate the approval process for major projects.40 In essence, the Party appeared to be returning to a tried and tested strategy of state-led, investment-driven growth. This had worked after the 2008 financial crisis, but it had also resulted in ballooning debt and tremendous overcapacity, while fuelling a perverse political economy.41 By mid-March, the government was claiming that 95percent of large firms outside Hubei and 60 percent of small- and medium-sized enterprises had resumed operations, with some 80 percent of corporate employees returning to work.42 Independent reportage by outlets such as Caixin, however, showed that often companies and local officials were gaming the system by fraudulently boosting metrics, such as electricity consumption, to meet work-resumption targets.43
Irrespective of these early steps, data from China’s National Bureau of Statistics (NBS) showed a historic contraction in economic activity across the country in the first two months of 2020.44 The official unemployment rate in February rose to a high of 6.2 percent.45 This number would temper in March to 5.9 percent and has continued to remain below 6 percent since. However, there is a caveat. The NBS data only covers urban unemployment, thereby excluding the rural population and some 290 million migrant labourers. At the height of the pandemic in China, estimates suggested that the unemployment burden was at least three times higher than what official data was capturing.46 Through February and March, a number of companies around the country had been either laying off, furloughing or paying significantly reduced salaries to employees.47 There was clear evidence that the employment situation, particularly with another 8.7 million college graduates expected to join the workforce later in the year, weighed heavily on the minds of the Chinese leadership. During a weekly meeting of the State Council in March, Li demanded that all key government departments prioritise stabilising employment. ‘As long as employment is stable this year, it is no big deal for the economy to grow a little bit faster or a little bit slower,’ he told officials.48
In mid-April, NBS data revealed that China’s economy had experienced a 6.8 percent year-on-year contraction in the first quarter of 2020.49 This was the first quarterly decline in gross domestic product (GDP) since official record-keeping began in 1992. Analysts at Nomura expected the trend of negative growth to persist but ease a touch through the second quarter.50 The IMF projected weakness to continue, but said that growth would recover over subsequent quarters, estimating an annual GDP growth rate of 1.2 percent.51 This was then expected to lead to a stronger rebound in 2021. State media, meanwhile, maintained focus on keeping the narrative positive. Xinhua argued that the numbers showed that the Chinese economy was bent, but it was not broken.52
This confidence was derived from improving month-on-month numbers at the end of the first quarter, along with the new policy direction that the leadership had outlined in late March during a Politburo Standing Committee meeting. In that meeting, the central leadership had called for local governments to continue taking steps to gradually restore normal work and life and establish designated quarantine facilities and policies for inbound travellers. At the same time, there was a pledge to raise the fiscal deficit, issue special treasury bonds, increase the scale of special bonds for local governments and keep interest rates low, while continuing with relief measures that had been announced earlier.53 Essentially, the government was moving to ensure that there would be enough money supply in the economy to keep firms afloat and corporate burden limited while it encouraged work resumption. Along with this, it was leaning particularly heavily on State-owned Enterprises (SoEs) and even private companies to stem job losses. On 12 March, the State-owned Assets Supervision and Administration Commission (SASAC) launched a new plan to boost employment for fresh graduates and migrant workers in poorer counties.54
Along with these, another round of measures was announced on 1 April to support enterprises and boost domestic demand.55 Local governments too began issuing vouchers in order to encourage consumption.56 The key political objectives that all of these measures were supposed to meet were distilled into the phrase ‘six guarantees’. Meeting these was the bottom-line task for all Party members. The six guarantees included ensuring employment, basic livelihood, functioning of market entities, food and energy security, stability of the supply chain and functioning of grassroots institutions.57 This was indicative of political stability concerns that a wobbly economy entails for the Communist Party.
All of these policies would eventually resonate in the package that Li outlined during his NPC speech. Eschewing the announcement of a GDP target for the year, the Chinese Premier raised the fiscal deficit target to 3.6 percent and promised new subsidies. He pledged special transfers to local governments, upped their bond issuance quota and committed to a new mechanism for funds to go straight to prefecture and county governments. By most assessments, the Chinese leadership was promising a stimulus of around 4 percent of GDP, which would entail reduction in taxes and fees, special transfers to local governments and targeted investments, and a focus on major infrastructure projects, urban development and emerging technologies.58 Data suggest that an overwhelming portion of this money had been disbursed by early August. However, bureaucratic bottlenecks and corruption ensured that a large chunk of this money remained unutilised. For instance, as of mid-August, the central government had allocated 98.5 percent of the 2 trillion yuan that Li Keqiang had promised as special transfers to local governments.59 But only around 30 percent of this money had been used. The threat of central leadership scrutiny could be another reason for the non-use of these funds. Promising the 2 trillion yuan during his NPC speech, Li had also warned that ‘these funds should be primarily used to ensure employment, meet basic living needs, and protect market entities’, adding that they should not be ‘withheld or diverted for non-designated uses’.60 In contrast, local government bond issuance, including general and special bonds, which would not necessarily attract similar scrutiny, surged to 5.68 trillion yuan at the end of the third quarter of the year, easily outstripping the 2019 number.61 In essence, more debt was being added at these levels of government to invest in infrastructure and repay old debt.
More importantly, the steps that the Chinese central government had taken were essentially stimulating the supply side of the economy—a fact not only borne out by data but also acknowledged by China’s central bank governor Yi Gang in an interview in August.62 Such an approach, it was expected, would result in having a fairly rapid impact on topline numbers. And indeed, by the end of the second quarter of 2020, the Chinese government said that the economy had returned to positive growth. NBS data showed GDP growth of 3.2 percent year-on-year in the second quarter of 2020, beating most market expectations. While acknowledging the positive trend, several analysts questioned the veracity of the official GDP growth number, considering official data showed that a significant percentage of production units and service sector enterprises had remained shut till late May.63 Nevertheless, a positive trend was apparent. By the end of the third quarter, the Chinese economy was firmly back on the growth trajectory. Quarterly GDP growth was at 4.9 percent.64 Despite the first quarter shock, cumulatively the economy registered 0.7 percent year-on-year growth. The IMF revised its annual growth estimate for China upwards to 1.9 percent, with the promise of sharper recovery likely in 2021.65
Structural Flaws
Hu Angang, a professor in Tsinghua University and an adviser to Xi, believes that the Chinese economy can potentially expand at a rate of 5 percent per year over the next 15 years.66 However, sustaining such growth is likely to be challenging, particularly given the slow recovery of domestic consumption, increasing tensions with the US and the emerging geopolitics of de-globalisation. In addition, by stimulating the supply side of the economy as part of its crisis response mechanism, the Chinese government has, for the moment, exacerbated structural problems, such as debt, overcapacity, inequality and uneven growth. For instance, the Institute of International Finance estimated that by the end of the third quarter of the year, China’s debt to GDP ratio had soared to 335 percent.67 A significant chunk of this borrowing was also being done by corporates. This, of course, created a whole new set of challenges. Earlier in the year, it was reported that China’s banking sector, which the government leveraged to keep credit flowing to companies and individuals, had been preparing for a significant increase in bad debts and future losses in 2021.68 Analysts at the US-based Center for Strategic and International Studies believe that China’s financial system remains ‘highly vulnerable to threats of falling property prices, defaults of loans and corporate bonds, tightening interbank market conditions and capital outflows’.69 They argue that this pressure becomes particularly acute when ‘Beijing’s credibility erodes and implicit guarantees on assets are suddenly questioned’.70 This dynamic has generally been evident when the central leadership attempts to tighten cash flows and impose financial discipline. Addressing such structural issues had been critical components of Xi’s reform agenda. Supply-side structural reform, in fact, was a key buzzword among his early economic policies. However, it appears that these efforts had to be significantly scaled back in order to ensure a rapid rebound amid the pandemic.
But there have been signs that Beijing is attempting to take steps towards imposing some sort of financial discipline. In August, the Chinese government allowed Baoshang Bank to file for bankruptcy.71 The Inner Mongolia–based lender had been taken over by financial regulators in May 2019—the first state bank seizure in 20 years. At the same time, new red lines were laid out for property developers in 2020, limiting their credit-raising ability.72 Soon after, reports emerged of the Evergrande Group’s dire financial troubles.73 There were no indications that Beijing was in a hurry to step in to help. Then in November, three state-backed enterprises defaulted on bonds.74 Among these was Tsinghua Unigroup, a key player in China’s push for self-reliance in semiconductors. These events sent jitters across China’s bond markets, with questions being asked not just about the credibility of ratings agencies but also the government’s implicit guarantees of support. Some wondered whether this was a signal of Xi seeking to stealthily return to the reform agenda of discipline and supply-side reform.75 Others, such as the Rhodium Group’s Logan Wright, argued that it was not as straightforward. He explained that the credibility of local government guarantees in China are increasingly being questioned by investors, and addressing this challenge will not be easy for Beijing. He argued,
The declining credibility of local governments is an entirely new form of financial risk, and the market is now struggling to price it. Contagion is spreading and more firms are having their creditworthiness questioned. In the meantime, banks are tightening collateral standards for lending against corporate bonds.
This led him to conclude that that sooner or later the central leadership would intervene through ‘emergency measures to calm financial markets’.76
Analysts also believe that the supply-side stimulus that the Chinese government engineered has only added to what was already a difficult situation. Michael Pettis, professor of finance at Peking University’s Guanghua School of Management, believes that that the limited recovery of sustainable demand in China, with retail sales picking up through the end of the third quarter and more people returning to malls, movie theatres and the public sphere in general, had come owing to substantial boosting of the production side of the economy. For him, this had been a ‘supply-side recovery in an economy that urgently needs more domestic demand’.77 This, he argues, is not sustainable. ‘Unless Beijing moves quickly to redistribute domestic income, it will require either slower growth abroad or an eventual reversal of domestic growth once Chinese debt can no longer rise fast enough to hide the domestic demand problem,’ he wrote in the Financial Times.78 And doing that is going to be rather difficult when a significant majority of the population that has borne the pandemic-triggered losses is neither being employed nor supported appropriately via a social security net. Li Keqiang acknowledged this challenge during the NPC meetings when he said that ‘there are over 600 million people whose monthly income is barely 1,000 yuan (US$ 140), not enough to rent a room in the Chinese cities’.79 These people had faced the worst of the pandemic. This situation has also led some to argue that the government’s decision to aid business owners rather than workers has led to the emergence of a K-shaped economic recovery, exacerbating inequality. This argument is supported by data from the China Household Finance Survey, which revealed that the bottom 60 percent of Chinese households reported a decline in wealth in the first half of 2020, while those earning more than 300,000 yuan a year reported net gains.80 It is little surprise then that the earliest recovery in retail sales in the second quarter of 2020 was a product of increased demand for luxury items.81 Another outcome of this stimulus approach was that it led to an uneven regional recovery. For instance, a survey conducted by China Beige Book covering 3,300 firms across the country found that large firms in coastal regions and big cities were doing much better than smaller firms and those in less developed regions, such as Tibet, Gansu, Qinghai and Xinjiang.82
The flip side of the argument on consumption, of course, is that consumer spending is always going to be difficult to stimulate in such a crisis, particularly when it has conventionally not been the driver of the economy. For instance, household consumption accounted for just 39 percent of China’s GDP in 2019, well below the global average of 63 percent. It is, nevertheless, likely that there will be an uptick of sorts as social distancing guidelines ease further in the months ahead.83 This was evident during the October Golden Week holiday. The Chinese box office raked in 3.9 billion yuan (around US$ 581 million) over the eight-day holiday.84 This was lower than the 2019 figure of 4.5 billion yuan (around US$ 670 million). But considering the circumstances, it signals an incredible turnaround. Meanwhile, the China Tourism Academy estimated that some 637 million trips were recorded during the eight-day period.85 This number was again down, by 21 percent, from the year before. But it was still a tremendous figure, considering schools in most cities had requested families to remain in town as they would face quarantine upon returning after travel. Moreover, there are signs that the Chinese government is keen to adopt greater measures to boost domestic demand over the longer term.
Starting from May, reports informed that the Chinese leadership was beginning to look inward for growth.86 While officially the rhetoric about reform and opening up persisted, leadership focus was rapidly shifting towards self-sufficiency and domestic demand expansion. Following a Politburo meeting in late July, the People’s Daily termed the boosting of domestic demand a ‘strategic imperative’ while arguing that China must approach the economic challenges that it faces from the ‘perspective of protracted warfare’.87 Subsequent reportage in Chinese media, however, would argue that Dual Circulation—as the new economic strategy would be named—was not about stepping back from the global economy; rather it was about emphasising consumption-driven growth and not export-driven growth. This shift towards consumption as the key driver of growth has been a Party-state objective for the better part of the last decade. In large part, it is driven by market dynamics. As input costs have risen, low-end Chinese exports have become less competitive globally. Yet, instead of domestic consumption, it has been investment—particularly state-led infrastructure investment—and exports that have been the key drivers of growth during this period.
Moving towards consumption-driven growth will require painful structural changes, which will encounter political economy challenges. As economist George Magnus has argued, if the Chinese leadership is keen on structurally expanding consumption as a driver of growth, it needs to lift the share of wages and salaries in the economy, lower income inequality, build social safety nets to discourage high levels of household savings and ensure that the millions of migrant workers get greater state support.88 Doing this will require durable and structural reform, which will implicitly entail a shift in political power. It remains to be seen how the leadership goes about cracking this nut without making fundamental adjustments to the economic model.
For the moment, what Dual Circulation entails remains fuzzy. Jude Blanchette and Andrew Polk argue that it essentially involves ‘engaging international capital, financial, and technological markets when advantages can be gained while simultaneously bolstering indigenous capabilities to avoid overreliance on the global economy—due to national security concerns or the vagaries of global economic cycles’.89 Yao Yang, the dean of the National School of Development at Peking University, was far more direct in his assessment. ‘This policy has a lot to do with China’s changing international environment, particularly the deterioration of Sino-American relations. China needs to prepare for the worst-case scenario, in which the US seals off China in certain tech areas,’ he told The New York Times.90 Zhu Ning, a deputy dean at the Shanghai Advanced Institute of Finance, concurred with Yao’s view, arguing that it was important for China to prepare for an even further degree of decoupling with the US.91 In the weeks that followed the announcement of the Dual Circulation strategy, the Party-state media apparatus sought to push back against the argument that China was turning its back to the world.92 The fact that China’s imports have continued to decline while exports have gained strength does not sit well with this narrative. But it is far too early to race to conclusions. A clearer picture about Dual Circulation’s practical impact is unlikely in the short term.
Spinning Victory
What, however, has been clear is the Chinese leadership’s effort to craft a positive narrative in support of its policy choices. As discussed in earlier chapters, from February 2020 onward, the Party-state propaganda apparatus began emphasising Xi Jinping’s control of the situation, the Party’s focus on saving lives and the heroic nature of individuals who contributed to contain the epidemic. This narrative, of course, ignored the systemic failures that led to the outbreak in Wuhan, the lack of public discussion over the policies that were adopted, the extrajudicial authority reposed with grassroots cadres, the privacy implications of technological interventions, the silencing of critics and the lack of accountability of the top leadership.
For instance, one part of the narrative has been about the effectiveness of the Chinese government’s contact tracing efforts, their significance in reducing the spread of infections and the use of interventions such as health codes to ensure safe reopening. There is little argument against the significance of effective contact tracing in containing the spread of infections. But that does not obviate the need for policy to consider data security and privacy implications. Yet, Party-state media, by and large, was silent on these issues. For example, in case of the health codes, there was little clarity about the parameters on the basis of which people were being classified into different colour categories, which determined whether they were to be quarantined or permitted to move around.93 An analysis by The New York Times of Alipay Health Code, in fact, found that the app was sharing individuals’ data with the police, although the product did not make this apparent to the user.94 An assessment by researchers at the Takshashila Institution in May ranked the tools used in China for these purposes poorly on the metric of preserving individual privacy.95 While at the height of the pandemic, anxious Chinese citizens might have been less concerned about privacy and more willing to part with sensitive personal data in unprecedented times, there was barely any discussion and debate around the nature of data being collected, its storage and security or about sunset clauses in the media. The end of containment and returning to normalcy, in this sense, justified the means. In a similar vein, despite the fact that clinical trials were yet to be completed on domestically developed vaccines, the government began administering them to select individuals. Apart from armed forces personnel, vaccines were given to medical workers and employees at some SoEs, particularly those working overseas, starting in late July.96 As of October, reports informed that vaccines had been administered to thousands of Chinese citizens, with little public debate about the pitfalls of such unscientific risk-taking.97
This is not to say that there has not been any reflection in popular and official media discourse in the context of the response to the challenges that the pandemic presented. It is to argue that such reflection has been limited to identifying gaps that can help enhance centralised Party control, improve governance efficiency and address near-term economic and public health challenges, along with defending the legitimacy of CCP rule and presenting it as the inevitable outcome of China’s historical and political experience.
Consequently, Party-state media narrative over time drew on the evident success in containing outbreaks and restarting economic growth, as discussed earlier, to focus on a select set of themes. These eventually fed the broader agenda of projecting the strength of the CCP-led Chinese system of governance as not just the most effective but also the only appropriate alternative for China. The tone for this was set rather early. In February, a piece in the Party’s journal Qiushi touched upon a number of key themes that would be repeated throughout.98 These included
✦ Xi’s ‘personal’ and ‘decisive’ leadership of the epidemic control campaign,
✦ a policy of putting people’s lives above everything else,
✦ a focus on the ‘heroic’ and ‘selfless’ deeds of doctors, grassroots Party cadre, soldiers, enterprise workers and ordinary citizens and
✦ an emphasis on the Party having adopted a scientific approach to epidemic control and prevention.
Soon after, few other components—about international cooperation, China’s responsibility as a major power and transparency—were added to these themes. In addition, there was a stress on the ‘institutional strength’ of the Chinese Party-state system, which permitted rapid and mass resource mobilisation.99 These emerged as the epidemic situation in China was stabilising, with Xi visiting Wuhan in mid-March. In contrast, the situation across large parts of the world had just begun to turn grim, with the WHO declaring a global pandemic. At the same time, there was a growing chorus of criticism of China, including several unsubstantiated claims and conspiracy theories, with regard to suppression of information and the origins of the virus. On 11 March, Xinhua published an article coining an acronym PROTECT, which it said encapsulated the ‘practice and experience of the country and its people’ in containing COVID-19.100 PROTECT, the report explained, stood for ‘Party leadership, renmin for the people, openness and transparency, technology and science, early treatment, cooperation with the international community, and targeted and agile approach.’ The acronym did not catch on, but over the next few months, these themes found resonance in Chinese media coverage, official engagements and the White Paper that was released in June. At the time, a People’s Daily commentary under the Zhong Sheng byline, a pen name used for editorial commentaries on foreign affairs, proclaimed that the Chinese leadership’s actions in dealing with the pandemic had composed a ‘heroic hymn to the supremacy of life, highlighting the responsibility of a great power to life’.101
In early August then, the Party’s flagship newspaper began publishing a series of 16 essays drawn from a compilation, discussing the nature, developments and strengths of the Chinese governance system. In it the author termed the fight against the pandemic as a ‘great battle’ that had ‘demonstrated the advantages of the Chinese system’.102 The author juxtaposed China’s containment and work resumption success to argue that in comparison to the ‘inefficient and ineffective’ management of some Western countries, the system of socialism with Chinese characteristics had displayed ‘strong political leadership, social appeal, mass organization and resource deployment’ capabilities.103 China’s success in comparison to ‘chaos’ in the West, he argued, was nothing short of a ‘miracle in terms of economic development and social stability’.104 Another essay argued that a ‘moment of major crisis is the touchstone for testing the quality of the system. The novel coronavirus epidemic is a big test of our country’s governance system and governance capabilities. This fight against the epidemic has demonstrated the significant advantages of our country’s institutions, but has also exposed many weaknesses and deficiencies’.105 It then called for further plugging loopholes and addressing shortcomings to improve governance capacity. Such discourse essentially reflected the boundaries of acceptable criticism and introspection.
Other commentators were more flattering and moralistic in their tone. Luo Wendong, from the Chinese Academy of Social Sciences (CASS), argued that the Chinese leadership had responded to the pandemic by prioritising people’s health and livelihood.106 In comparison, Western leaders, he claimed, had focussed on narrow economic and financial interests, which was evident in their discussions about herd immunity and dismissal of the virus as just another flu. Fang Ning, Luo’s colleague at CASS, added that the ‘extraordinary organizational and mobilizational capabilities, overall planning, coordination, and execution capabilities’ of China’s socialist system had effectively demonstrated its superiority.107 Renmin University’s Liu Yuanchun wrote in the People’s Daily that the economy’s return to positive growth in the second quarter had demonstrated the ‘the strong resilience’ of China’s economy. To him, the economic achievements amidst the pandemic and a deep global recession were not just commendable but also ‘prove the significant advantages of the Chinese system’.108 Zhang Ming, Deputy Director of Nanjing University Base, Jiangsu Research Center for Socialism with Chinese Characteristics, proclaimed that ‘the strong leadership of the Communist Party of China, the majestic power of the Chinese People, the governance capabilities of the Chinese system, and China’s growing comprehensive national power’ had come together in the fight against the pandemic, demonstrating the ‘strength of China in the new era’.109 Lin Zhenyi, from the Central Party School, called for China to harness this spirit of fighting the pandemic into ‘a powerful force for national rejuvenation’ to tackle the ‘unimaginable stormy waves’ that lie ahead.110 Wang Shaoguang from the Chinese University of Hong Kong, meanwhile, positioned the pandemic not merely as a public health or an economic challenge but also a contest between various political systems and ideologies. Drawing on debates over mask use, he argued that it could be seen that countries and regions that practise socialism or have a stronger collective consciousness are obviously doing better than capitalist countries that advocate individualism.111 This was a reflection of how Beijing has sought to grasp the narrative amidst the disastrous handling of the pandemic across much of the Western world. This aspect is explored in greater detail in later chapters. But for the moment, it is important to note that this narrative was furthered through different means, such as articles and essays by foreign diplomats highlighting positive coverage in foreign press and publicising positive remarks about China’s management of COVID-19 and its economic recovery in foreign media or by commentators and businesspeople. So, Xinhua carried snippets of coverage by the Wall Street Journal about China’s economic recovery.112 Author and journalist Peter Hessler’s essay in the New Yorker on China’s virus containment success was widely reported on.113 Martin Jacques was featured by CGTN.114 Jeffrey Sachs was featured by the People’s Daily. And the positive studies and assessments from scientific journals and WHO members were given full play. Also repeatedly mentioned in different reports was a survey from the University of California, San Diego’s China Data Lab, which indicated that public trust in the Chinese central government had increased from 8.23 out of a maximum score of 10 in June 2019 to 8.65 in February 2020 and to 8.87 in May 2020.115
This domestic discourse hit its peak in early September. On the eighth of the month, the Chinese leadership held a grand event to commemorate the country’s fight against COVID-19. State honours were conferred upon medical professionals, including respiratory expert Zhong Nanshan and Traditional Chinese Medicine expert Zhang Boli.116 In fact, a total of 1,499 individuals, 500 groups, 186 CCP members and 150 primary-level Party organisations were commended for their roles in fighting the epidemic. Another 14 Party members were posthumously awarded. On the day, the NHC reported just 10 new infections across the country, all of which were ‘imported cases’.117 In all, China had by then officially reported 85,144 confirmed cases and 4,634 deaths. Chinese officials argued that the disease had been largely wiped out from the country.118 A People’s Daily editorial ahead of the national ceremony proclaimed it as a moment of pride, marking the ‘arduous and majestic struggle’ of the Chinese people against the disease. It called on the country to take forward the spirit of fighting the epidemic and further rally behind the CCP with Xi Jinping at its core.119 Across the board, official media hailed Xi’s leadership. Xinhua published a ‘chronicle’ of his actions and remarks, which blended reportage, revisionism and hagiography.120 Other writings emphasised that the entire country—medical professionals, the armed forces, Party cadre, enterprises and ordinary citizens—had united behind Xi’s command to fight a people’s war against the virus.121
In his speech, Xi reiterated the official version of events and the key themes of the Party’s narrative. For instance, he summarised ‘China’s spirit in combating the COVID-19 epidemic as—putting people’s lives first, nationwide solidarity, sacrifice, respecting science and a sense of mission for humanity’.122 China, he added, had fought a fierce war against the epidemic and passed the extraordinary test of history.123 He then added that ‘strategic results’ had been achieved in the fight against the epidemic, ‘fully demonstrating the significant advantages of the leadership of the Communist Party of China’ and the ‘country’s socialist system’.124 By this, he implied the institutional advantages that state media had earlier touted, such as mobilising 4.6 million grassroots Party organisations, the medical community, armed forces personnel, private enterprises, bureaucracy and financial resources. The other more emphatic and perhaps poetic version of this sentiment talks about Angel White, Olive Green, Guardian Blue and Volunteer Red forces quickly assembling and charging into harm’s way upon Xi’s command ‘to form a powerful force to defeat the virus’ and ‘write a magnificent spiritual epic’.125 Xi, meanwhile, used this sentiment to emphasise the need to reinforce the Party’s rule, along with the four confidences and core socialist values.
The great anti-epidemic spirit is in line with the long-standing characteristics and cultural genes of the Chinese people. It is the inheritance and development of patriotism, collectivism, and the socialist spirit.... We must vigorously promote the great anti-epidemic spirit among the whole society and transform it into a powerful force for the comprehensive construction of a modern socialist country and the great rejuvenation of the Chinese nation.... Both history and reality tell us that as long as we unswervingly persevere in and strengthen the Party’s overall leadership, continuously enhance the Party’s political leadership, ideological leadership, mass organizational power, and social appeal, and always maintain the flesh and blood ties between the Party and the People, we can certainly form a formidable synergy to deftly handle the challenges of various complex situations and risks.
Towards the end of the month, a commentary under the name Zhong Xuanli, a pseudonym used by the Theory Division of the Central Propaganda Department,126 underscored the value of China’s success in containing COVID-19, particularly as democracies struggled. It talked about the leadership of the Party and the spirit of collectivism and patriotism as China’s ‘most distinctive value’, adding that the COVID-19 fight had demonstrated that socialism was ‘the only way for the Chinese nation to achieve great rejuvenation’.127 Yet, while this victory was being commemorated, fresh storms were brewing. In the external environment, the pandemic and China’s aggressive foreign policy had unleashed a geopolitical churn. Meanwhile, domestically, there remained serious economic and political challenges which amplified the power tussles among the Party’s elite.