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23 January 2023

Xi’s course correction reveals an agile autocrat under pressure

David Ignatius

Chinese President Xi Jinping likes to cultivate an aura of careful, well-planned policy. He claims that’s the advantage of autocracy. But the past few months have looked more like an impulsive, zigzag journey along the edge of a cliff.

Xi in December announced a stunning reversal of major covid-19, economic and technology policies. This turnabout came just two months after an arrogant display at the Communist Party’s 20th Congress, during which Xi had seemed to be doubling down on failing strategies.

Xi didn’t explain or apologize in December. He just changed course. That illustrates his tactical agility, and also his shamelessness about rewriting party doctrine. It also shows how erratic Xi can be, and how important it is for the United States and China to establish guardrails so that misunderstandings on security issues don’t turn into disasters. Secretary of State Antony Blinken will try to deepen this U.S.-China dialogue when he visits Beijing next month.

An examination of Xi’s recent U-turns was compiled by the Asia Society Policy Institute, headed by Kevin Rudd, a former Australian prime minister and a China expert. In a paper released this week, the Society’s Center for China Analysis catalogued the policy changes, many of them announced during a meeting in December of the party’s Central Economic Work Conference. Their account matches recent reporting by Pamir Consulting, a leading advisory firm based in Vienna, Va.

The most dramatic change was the party’s “backflip,” as the Asia Society paper calls it, on its “zero covid” policy. In his October speech to the congress, Xi had described his lockdown strategy as “an all-out people’s war to stop the spread of the virus.” But at that time, U.S. officials believe, Xi probably knew that the omicron variant had spread so widely that it couldn’t be contained. Rather than admit error — and prepare to treat a spread of disease that could lead to 1.7 million covid deaths in his country by April, according to the British analytics firm Airfinity — Xi just waited.

Public anxiety mounted and, by late November, protesters were in the streets of Beijing and Shanghai, holding blank pieces of paper because they feared the consequences of sending an explicit message of criticism. “The party appears to have been caught by surprise” by the protests, the Asia Society writes. “There followed a fortnight of political indecision … about the degree of suppression that would be tolerated to bring protesters back under control.”

Without any official explanation, Xi reversed course on Dec. 8. China’s National Health Commission announced an end to automatic lockdowns, mandatory testing, and strict travel and quarantine rules. Evidently, Xi realized that the lockdowns — while failing to halt the virus — were freezing the country’s economy and jeopardizing his legitimacy as leader. A Pamir report explained: “China’s economic slowdown depleted financial resources for Chinese local governments and made Zero Covid unsustainable.”

Xi next moved to reverse the neo-Maoist economic policies that had demoralized Chinese entrepreneurs and enfeebled the country’s tech and real estate sectors. The Asia Society notes a series of changes in the December Work Conference report from the previous year’s version. The new edition was “less ideological,” more supportive of “market vitality and creativity” and more enthusiastic about consumer spending. Previous references to “common prosperity,” a buzz phrase that Xi had used to undermine successful business leaders, were dropped.

The conference report’s language “could indicate a relaxing of heavy-handed measures that have punished the Chinese tech sector,” according to a Pamir report this week. The financial markets certainly think so. Shares of Chinese technology companies have risen sharply recently.

Xi’s December turnabout was sensible enough; many of his left-wing policies should never have been adopted in the first place. What was so Orwellian was that the changes were announced without any admission that Xi was altering direction. Since 2017, he had been gradually “advancing the state while restricting the private sector,” the Asia Society notes, with costs that economists could have predicted. In December — poof! — Xi reversed course.

Rudd’s explanation for this change is that “the party panicked” in late November and early December as protests spread, covid surged and the economy plummeted. Xi’s about-face might have averted disaster, but Rudd argues in an email accompanying the Asia Society report that his “political standing will take a medium-to-long term hit from such a dramatic policy U-turn and so little preparation for it.” Xi retains total control of the party, but more mistakes like last year’s could encourage opposition.

What are the lessons for the Biden administration? First, it is clearer than ever that Xi is an agile autocrat; his sense of self-preservation kicked in last month as he was nearing a precipice. Second, even in Xi’s police state, the Chinese can still exercise “people power” when they dare to use it.

Finally, the past two months were a reminder that Xi is ruthlessly unpredictable — a leader who will turn on a dime to get what he wants.

Is Xi’s new economic-reform tilt permanent, or simply a tactical shift? Has he learned anything from his covid mistakes? As always with Xi, the best answer is to test him. The Chinese leader is a master of going in two directions at once.

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