New Outbreaks Test China’s Appetite for Reopening

Welcome to Foreign Policy’s China Brief.

The highlights this week: China takes one step forward and two steps back on its COVID-19 restrictions amid new outbreaks, U.S. Defense Secretary Lloyd Austin meets his Chinese counterpart in Cambodia, and why Chinese President Xi Jinping exchanged words with Canadian Prime Minister Justin Trudeau at the G-20 summit.

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This week saw Fresh Tightening, a predictable follow-on from False Loosening, which began earlier this month. After the 20th National Congress of the Chinese Communist Party last month, some observers hoped Beijing would adjust its zero-COVID policy, and announcements of a dynamic strategy in November bolstered markets, seeming to herald a new beginning. But new outbreaks have quickly dashed hopes of real change anytime soon.

On Monday, China recorded more than 28,000 new cases a day, nearly passing the country’s record. (Official death figures are still out of step with confirmed case numbers, suggesting some COVID-19 deaths are not accounted for, as in Shanghai earlier this year.) Authorities have closed public spaces again—especially in Beijing, Shanghai, and other mega-cities—and discouraged travel. The COVID-19 restrictions have affected 20 percent of China’s GDP, according to the Japanese firm Nomura.

Mass testing, one of China’s most unpopular and invasive pandemic policies, has returned. That can mean a sudden knock on the door for a test, residential compound-wide testing in the early morning, or spending hours lining up to register a test result in a health app. False positives and the overcautious approach to close contacts lead to many people getting swept into quarantine. And China’s quarantine has become increasingly unpleasant, with overcrowded and undersupplied facilities.

The situation in Shijiazhuang shows how local changes can stir mistrust among officials elsewhere whose career success still depends on keeping cases low. Shijiazhuang, a transport and manufacturing hub in China’s north, has a population larger than New York City. Rumors that the city would experiment with reopening resulted in mass confusion, including other cities red-flagging people from Shijiazhuang, making it difficult for them to travel or enter public spaces.  The city has now reintroduced restrictions and mass testing.

Underpinning some of the fear of relaxing restrictions is a newly public piece of data: Not only is China’s vaccination rate for people over 60 low, but the figure for people over 80—the most vulnerable group—is appalling. Only around half of people over 80 have received their primary vaccines, with just 20 percent getting a booster. Chinese-made vaccines also significantly underperform mRNA vaccines. That means any serious COVID-19 outbreak would likely cause significant deaths among the over-60s, and especially the over-80s, as Hong Kong experienced early this year.

China’s failure to vaccinate its over-80 population is a result of a strategic blunder in rolling out the vaccines, as well as of the limits of the state’s coercive power. When the vaccines were first deployed, China targeted its working-age population rather than focusing on the most vulnerable, citing a lack of clinical trial data for those over 60 and prioritizing the economy. That gave rise to claims—including from some doctors—that the vaccines had dangerous side effects for people over 60, leading to reluctance to get the shot.

Furthermore, most of China’s oldest people live in rural areas and travel minimally. While the country’s intrusive health app system works for COVID-19 control in cities, those outside them are quite capable of getting by without being vaccinated. Despite a major effort to increase the vaccination rate among over-60s, the figures have barely budged for months.

So, what is China’s endgame? Its economy is buckling under the strains of de facto lockdowns. Workers are protesting as they face weeks of being stuck inside factory barracks, sometimes without pay. Videos appear to show serious clashes between police dressed in protective gear and workers at Foxconn, which manufactures Apple iPhone components, in Zhengzhou. Analysts are again making the case that the current level of containment can’t hold, but China has repeatedly proved that intolerable situations last far beyond people’s limits.

Any significant policy change in the winter still seems unlikely, with perhaps some hope for a spring or summer shift.

U.S.-China thaw? Beijing and Washington seem to be partially repairing security relationships. U.S. Defense Secretary Lloyd Austin met his Chinese counterpart, Wei Fenghe, this week in Siem Reap, Cambodia, following on from the meeting between the two countries’ presidents on the sidelines of the G-20 summit.

This doesn’t seem like a full-fledged détente, with neither side making any public concessions, but instead a gradual return to the state of communications before U.S. House Speaker Nancy Pelosi visited Taiwan in August. Given China’s domestic problems, it’s possible that the Chinese leadership has some hope that relations can be steadied with the United States to avoid making things worse.

However, U.S.-bashing is often an easy solution for Beijing when things are going wrong, and a year of broken contacts and bitter propaganda have eroded its understanding of Washington.

Xi-Trudeau spat. Chinese President Xi Jinping was caught on camera confronting Canadian Prime Minister Justin Trudeau over leaks to the Canadian press on the sidelines of the G-20 summit this month. An unusually aggressive Xi chastised Trudeau, saying, “Everything we’ve discussed has been leaked to the papers, and that is not appropriate.” Trudeau’s response was that Canada is an open society in which events can’t be hidden from the press—something that the Chinese leader may find hard to accept.

Chinese media did not give much attention to the exchange, perhaps because of the candid nature of the comments: It made Xi seem as though he was not in perfect control of events. Contrast this with the coverage of Xi’s meeting with U.S. President Joe Biden, who was described as “listening attentively” and “bowing his head” to Xi. It is certainly not a promising sign for any end to so-called “wolf warrior” diplomacy.

The China-Canada relationship has been fraught since Beijing held two Canadians hostage to put pressure on Ottawa over the detention of a Chinese executive in late 2019 for a U.S. extradition request, and the pandemic only worsened tensions. Canada’s security services recently accused Beijing of electoral interference.

Deadly fire in Henan. A deadly blaze killed at least 38 people at a factory in Anyang, Henan province, on Monday. The response to the disaster has followed the usual pattern: an initial spurt of coverage followed by heavy censorship—and soon, I expect, a quest for convenient scapegoats. Improper storage of industrial chemicals seems to be responsible for the fire—the same cause behind the Tianjin explosions of 2015.

But with no meaningful follow-up coverage, there is rarely any significant change in practice following disasters like this in China. The deadly conditions in Chinese industry are one reason that young people are turning away from factory work toward retail or service jobs—a trend that worries Chinese economic planners.

TikTok troubles. Anti-TikTok sentiment is rising again in Washington, this time based on fears that the Chinese-owned firm is a vehicle for Beijing’s influence campaigns. There may be another attempt to ban the app in the United States after the Trump administration’s attempt was blocked in courts. But FBI Director Christopher Wray raised the issue again at recent hearings. (Wray’s own record on China is questionable, given the bureau’s botched China Initiative.)

As with many other firms, there are certainly real questions about how much data TikTok collects. But fears that it is some backdoor into the hearts of American youth seem overblown, given China’s general social media ineptness and the rapidly changing nature of TikTok content.

Xinjiang cotton loopholes. Clothes made from cotton manufactured in Xinjiang, where China uses forced Uyghur labor on a vast scale, are still making it to the United States despite the Uyghur Forced Labor Prevention Act. Fast-fashion companies such as Shein are using a loophole that allows individual shipments of clothing worth less than $800 to reach consumers directly, according to a Bloomberg report that used isotype testing to determine the cotton’s origin.

Untangling such direct-to-consumer deals may be tricky, especially since shipping costs have nearly fallen back to their pre-pandemic levels, resulting in U.S. consumers returning to Chinese e-commerce platforms.

Chip sanctions biting. The Biden administration’s sweeping sanctions on the Chinese semiconductor industry are already taking a toll. As well as service contracts being cut, export restrictions have caused a 27 percent year-on-year decline in purchases of chipmaking equipment. China may develop domestic alternatives, but that may be a slow prospect given government interference and the increased difficulty of buying (or stealing) foreign intellectual property to work from.

There’s a tendency among analysts to think that increased government interest will help, but I’m not certain the record bears that out: China’s biggest technological successes have been in areas where the market led and the government followed, such as online logistics and digital payments.