Will China’s leader stay in power as the nation suffers from interest rate quarantine and economic stagnation? Xi Jinping’s popularity has already declined in social media and quality magazines.
19.5. 11:22 • Updated May 19th. 14:05
BEIJING Locking 25 million Shanghai residents at their homes has weakened the Chinese leader Xi Jinpingin power, evaluates long-standing Chinese expert, docent at the Asian Institute of Management Robert Wihtol.
Over the past nearly ten years, Xi Jinping has risen to near-cult status as a strong leader. With the constitutional amendment, he is expected to continue for a third term when the country’s Communist Party meets in November.
However, the interest rate restrictions that have stalled the Chinese economy are violating the party’s market image of a model country in glorious condition.
– Tight corona measures will certainly weaken Xin’s position, as well as tight economic policies and also a stance in support of Putin in the war in Ukraine, says Robert Wihtol, who has led the Asian Development Bank’s China operations for a decade.
In China, led by the Communist Party, criticism of the president’s decisions must not be seen. In the fight against the corona, Xi runs a strict zero tolerance that does not tolerate any infection. Although citizens locked in their homes have protested, the president has vowed to keep a tough line.
However, Wihtol said the protests by the corona quarantine in Shanghai are an example of unusual criticism. It has been seen as a protest by residents on the streets and in videos uploaded to someen.
The shock of Shanghai’s residents, who have been closed for another month, has surfaced in China’s heavily censored social media for at least a moment. Millions have had time to see workers in protective suits breaking the doors of their homes to pick up people in quarantine centers, killing pets or spoiling furniture by spraying disinfectant into their homes.
– Behind the scenes, there have also been protests about Russia’s support in Ukraine. Disagreement has emerged, which is special in Chinese conditions, however, Wihtol estimates.
Last month, a researcher working for a government research institute published an opinion paper on Chinese social media urging China to immediately end its relationship with the Russian president. Vladimir Putin.
– Usually, such writings that are on different lines with management quickly disappear from the web. However, the text remained online for a week. This means that the text had high-ranking supporters, meaning its removal was not prevented, Wihtol says.
Inelastic zero tolerance strains the economy
Wihtol describes the interpretation of Chinese policy on tea leaves to predict.
It is clear how the zero tolerance of the coronavirus is ruining the Chinese economy. The factories have been closed not only in the export center of Shanghai, but also in dozens of other cities. Trucks and ships have stalled due to corona restrictions. Workers are quarantined at home or in the workplace.
– A considerable part of China’s economic capacity is currently closed or inactive. Of course, this must affect economic growth, says Wihtol.
Indeed, on Monday, Statistics China reported that retail sales and factory production will be at their lowest level since the beginning of the coronary virus pandemic in 2020. That’s when Chinese factories came to a standstill for weeks. Unemployment has also risen. Workers sit in their homes quarantined or locked in their workplaces.
It is difficult for foreigners to enter the country. The border is practically closed. Visas are scarce. Tourists and exchange students have not been allowed to enter the country since the beginning of the corona pandemic. Those who enter China will be subject to strict hotel quarantine for weeks.
China fears a collapse in medical care
Robert Wihtol cites inflexibility and the poor effectiveness of Chinese coronavirus vaccines as the reason for locking in zero tolerance. In China, there are fears that an increase in the number of infections would collapse medical care.
– Xi may be afraid that if the doors are opened, the number of deaths may rise, from which the fall will fall to him. In the year of the party convention, he is certainly reluctant to change his line because that would be a sign of weakness, he says.
The problems caused by interest rate restrictions are already piling on top of previous economic woes. Since last year, Xi Jinping’s ideological policy has severely regulated China’s thriving technology companies, real estate waste, gaming industry and lucrative tutoring companies, among others. They have been accused of greed and monopoly efforts, among other things.
Businesses have collapsed and jobs have been lost. More than a thousand billion euros were wiped off the Chinese stock market in just three days last year when the state banned millions of tutoring companies coaching Chinese children from teaching school subjects.
Foreign capital has declined rapidly in China. The unpredictability of corona quarantine operations has also led numerous foreigners to leave the country.
Wihtol sees economic regulation as a sign of an inward turn. He wonders because China is still dependent on foreign trade.
Xi Jinping envisions, in the framework of the “dual-cycle” economic policy he announced in 2020, that the growth of domestic consumption will rise as an economic engine alongside exports.
– The Chinese like to save and consume less. They don’t remind Americans who are happy to buy for their consumption needs. The Chinese are also saving for the future because the pension system is weak, Wihtol says.
Xin’s third season still looks certain
Wihtol believes Xi Jinping will still rise to his third term because a notable challenger is missing. The power of the president does not falter, he said.
– Undermining means that his dominance would be called into question and he could be removed from office. This requires alternative candidates and Xi Jinping has played his cards very skillfully. They can’t be found in top management, Wihtol estimates.
Thus, Xi Jinping can continue his tough corona policy. Robert Wihtol recalls that the hierarchy of the Chinese Communist Party is preventing surprise names from rising into the country’s leadership. The leader is usually elected from the seven members of the politbyron standing committee of the party’s top management team.
– A viable candidate to succeed Xi Jinping would be under 60 years of age. There are three of these in the 25-member politbyro, but they too have kept a very low profile, he thinks.
Li Keqiang is considered a challenger
According to Wihtol, the key person is the next prime minister, the country’s second leader. The current prime minister Li Keqiang will step aside in the run – up to the November 2010 National Congress in March 2023.
Conservative, ideological Xin is opposed by the so-called youth allies, the breeders of the communist youth alliance. They want more liberal economic policies and the strengthening of the private sector. The current Prime Minister Li Keqiang is the group’s leaders.
– Prime Minister Li Keqiang has recently taken a number of economic policy initiatives to improve the position of the private sector, which is not fully in line with Xi Jinping’s strict line, Wihtolkin estimates.
Yesterday, Li demanded the technology companies the right to list on the stock exchange at home and abroad. The Chinese authorities blocked the listing of the giant Ant on the Hong Kong and Shanghai stock exchanges the following year. Since then, regulation has hit many big companies.
The choice of prime minister is crucial
Robert Wihtol considers the election of a future prime minister to be a very important milestone in Chinese politics.
– If Xi Jinping gets his own husband in the place of prime minister, he will be able to draw his own line. But if there is an opposition camp, i.e. a candidate from the Youth Allies, this will be able to balance Xin’s power and this is especially evident in economic policy, Wihtol says.
Supposed to be Xi Jinping’s favorite Li Qiang however, you may be out of the game. He is the general secretary of the Communist Party in Shanghai.
Li has been harshly criticized for putting 25 million Shanghai people in corona quarantine for weeks, so he could become a scapegoat for pandemic operations. The other two candidates are youth allies.
Robert Wihtol sees China worried about the economic downturn, even as President Xi assures that strict zero-tolerance measures will continue. The concern is reflected in the word “about”.
– The Chinese People’s Congress set an economic growth target of about five and a half percent in March this year. The word about is important because it has only been used a couple of times before. That is, it says that we are quite uncertain about the chances of achieving the goal, Wihtol says.
However, economic growth is the most important thing for party influence.
– The basic equation is that the party takes care of the national economy and the citizens are loyal to the party, Wihtol says.