What Xi’s Zero-COVID Fiasco Might Mean for China and the World

Protests spotlight the regime's misguided approach to the pandemic and lackluster vaccination campaign.

By , a deputy editor at Foreign Policy.
A woman holds a blank sheet of paper as demonstrators protest the deaths caused by an apartment complex fire in Urumqi, Xinjiang, China, at the Langson Library on the campus of the University of California, Irvine.
A woman holds a blank sheet of paper as demonstrators protest the deaths caused by an apartment complex fire in Urumqi, Xinjiang, China, at the Langson Library on the campus of the University of California, Irvine.
A woman holds a blank sheet of paper as demonstrators protest the deaths caused by an apartment complex fire in Urumqi, Xinjiang, China, at the Langson Library on the campus of the University of California, Irvine, on Nov. 29. FREDERIC J. BROWN/AFP via Getty Images

China has seen dozens of protests across the country this past week—including in the capital, Beijing, and financial center Shanghai—inspired by anger at the government’s zero-COVID policy and the extreme lockdowns imposed to control outbreaks of the coronavirus. They amount to some of the most significant protests China has seen since 1989, when a student-led movement gathered at Tiananmen Square was brutally repressed by the regime.

Why exactly has the Chinese government failed to pull off a nationwide vaccination campaign? And what are the economic effects of its ongoing zero-COVID strategy—and any potential crackdown on protesters? Those are a few of the questions that came up in my recent conversation with Foreign Policy economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity.

For the full conversation, look for Ones and Tooze wherever you get your podcasts.

China has seen dozens of protests across the country this past week—including in the capital, Beijing, and financial center Shanghai—inspired by anger at the government’s zero-COVID policy and the extreme lockdowns imposed to control outbreaks of the coronavirus. They amount to some of the most significant protests China has seen since 1989, when a student-led movement gathered at Tiananmen Square was brutally repressed by the regime.

Why exactly has the Chinese government failed to pull off a nationwide vaccination campaign? And what are the economic effects of its ongoing zero-COVID strategy—and any potential crackdown on protesters? Those are a few of the questions that came up in my recent conversation with Foreign Policy economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity.

For the full conversation, look for Ones and Tooze wherever you get your podcasts.

Cameron Abadi: Why hasn’t China been able to organize a successful vaccination campaign? China is a big authoritarian government, so why can’t they manage this?

Adam Tooze: I mean, it is the trillion-dollar question because it moves the entire world economy. I think, with all due modesty, we should simply say that we don’t have a very good answer to this question. I think the majority of observers say that it is in some sense mysterious. It is truly, I think, a profound policy failure because China does have vaccines that would work. It’s often said their problem is they’ve got vaccine nationalism and have been too proud to import Western vaccines, all of which would no doubt have helped. But that can’t be the fundamental cause, because the fact of the matter is that the Sinovac and Sinopharm vaccines, which were early on the scene, with a third dose, are adequately effective in covering against extreme illness and death. So they would do the job if they could get three doses of the national Chinese vaccines into people’s arms. But the astonishing thing is that only about half of the Chinese population has vaccine-based immunity in that sense.

And, initially, the vaccines were limited to people under the age of 60. It was an extraordinary decision to focus on the workforce rather than the elderly population. But that this regime, which is capable of extraordinary levels of control in so many respects, can’t apparently get vaccination jabs—three of them in quick succession into the arms of the elderly Chinese population—is truly staggering. This means that zero-COVID at this point is not some capricious vanity project of [Chinese President] Xi Jinping. It is currently their best tool in what is an incredibly dangerous situation because they have essentially an immune-naive population.

CA: Can we speculate on the possible reasons for not pulling off this vaccination campaign? Because, clearly, the Chinese government is comfortable with coercive measures, and they’re capable of other logistical efforts that are taxing. The lockdowns themselves are both coercive and logistically taxing.

AT: I think there is considerable squeamishness about the medicines themselves. The regime, I think, foolishly indulged in and allowed a variety of different conspiracy memes about vaccines to circulate, including about Western vaccines. There has, in a sense, been a destabilization of confidence in vaccines. What the regime didn’t do was create a kind of united front on vaccines—that vaccines are good, everyone should have them, and Chinese should have them in the same basis as everyone in the West. Instead, it was this sort of vanity-project vaccination politics, and they’ve become a victim of that to a degree.

CA: If China does loosen its zero-COVID policies and infections spread, many of the people infected are going to need medical services. What is the state of the Chinese health care system? How much does China spend on its hospital system compared with other countries?

AT: It depends on what you would expect a middle-income country to spend. Broadly speaking, it’s not exceptional in that respect. But that puts it in harm’s way. So it has, say, one-tenth the number of ICU beds that Germany does per 100,000 people. It has one-quarter of the ICU beds that the United States does. It has far too few nurses. And what happens when a successful but still basically middle-income country is hit by a disaster like this is that its health care system risks becoming spectacularly overwhelmed.

And the problems are even worse in the countryside of China, where the provision with hospitals and doctors is roughly half what it is in the cities. It’s a highly unequal society. About half, 500 million Chinese, remain in rural areas, which are underserved. And if you look at the experience of the United States, ultimately the mortality that piled up from COVID in the United States was much heavier in Mississippi, Alabama, Arkansas than it was, say, in Florida or New York, where we initially expected the mortality to be highest. Part of the problem is the funding of the system largely requires private funds. And so people in Wuhan were very late to go to the hospital because they were afraid of being bankrupted by hospital bills.

Another element of the calculus on the part of Beijing right now is exactly the same flattening-the-curve kind of logic that we all endlessly debated in 2020—namely, how can they contain the impact? No doubt there is Xi’s ego and the political reputation of the regime at stake. But this is also back to 2020 in terms of the basic public health dilemmas.

CA: Have the lockdowns been compensated by economic policy? Are Chinese businesses and workers receiving assistance and subsidies from their government?

AT: The crucial thing to say so far is that the Chinese, after all, haven’t had to do a nationwide European-style lockdown. They’ve done it city by city. And, of course, Chinese cities are gigantic—Shanghai, with 27 million people, is larger than the majority of European countries. So these are very large entities, and they do indeed provide a combination of support for businesses, labor law protections, employment protections, which support businesses. But they have not yet had to sustain a six-month economic crash.

That’s just not been China’s experience so far. If they were to have to do that, it would be epic in its consequences, both for China and the world economy. And when they do face that, I think it’s very difficult to see how they could avoid similar subsidy regimes, because Chinese employers do have legal obligations to pay wages, to continue paying wages for at least one salary period. And after that, they’re required to pay a kind of minimum basic package to their workers, which is fixed to the local minimum wage. But many Chinese cities don’t have minimum wage provisions. The overall welfare state in China is very inadequate and there are hundreds of millions of migrant workers who aren’t even in this system, many of whom are employed in factories and construction work. And they are incredibly vulnerable. So China is really, as I keep saying, embarking on the disastrous road to discovery that the West embarked on in 2020 and will have to improvise. One problem that is particularly pressing for the regime is the giant cohort of university students who are emerging into the labor market. It’s 11 million people this year in China who are entering a labor market that is in very bad shape. And youth unemployment in China is pushing toward 20 percent, which is a truly catastrophic level.

The most extreme Chinese response to the crisis is the so-called closed-loop system, where the question of subsidy doesn’t arise because the factories and the offices go on working. It’s just that the workers don’t get to go home. And that’s really the most draconian model, which avoids the problem of needing a public subsidy because the units of production essentially function as quarantine units. And I think it was the threat of that model being extended on the large scale that caused the extraordinary rioting and scenes of protest at Foxconn, because stories of the extraordinarily horrible conditions in these closed-loop factories have circulated widely in China, despite media censorship. And workers, for obvious reasons, were desperate to avoid being locked into their factories for weeks, if not months, on end.

Once upon a time, you would have thought that Beijing would be trigger happy with huge stimulus. But, on the contrary, over the last year it has embarked on the program of bringing down the extraordinary housing bubble very deliberately and deflating that, and on the other hand, cracking down on tech companies. And both of those have a very bad impact on the labor market.

CA: Do you mean China feels it can’t afford to kind of bail out the economy in the ways they have in the past?

AT: It’s not so much a question of affording, I think, because this is a closed-loop monetary system. They can finance it. But it requires policy to go into reverse because their standard method for stimulating the economy was to launch a big infrastructure and housing push. And that runs counter to the entire logic of deflating the housing bubble. And so they find themselves caught, if you like, in a policy conflict that will be quite difficult to resolve and, concretely now, with a collapsing real estate sector. We see this in the consumer figures for China—consumer confidence in China appears to have collapsed. Consumer spending has not come back to pre-COVID levels. What that’s telling you is Chinese households are accumulating ever greater levels of saving, presumably. And that’s also one of the cushions that is seeing China through.

CA: Some protesters are going quite far in challenging the legitimacy of the Chinese government itself; some are calling for Xi Jinping to step down. How do protests in this kind of situation produce change in dictatorships? What are the potential calculations that protesters are making—what kind of theory of change might be informing their actions on the streets?

AT: I think modesty is called for in our ability to assess this and also the fact that we speak from a position of safety. Whereas the demonstrators in China are running rather considerable risks in engaging in these incredibly imaginative protest forms, which we are celebrating on the outside vicariously by way of Twitter and social media and so on. For many of the people involved, this is a turning point in their lives, and their career prospects and everything else will never be the same again if their faces are identified by the regime. So the stakes are incredibly high.

I don’t think there’s any doubt that tens of millions of people in cities across China, if not hundreds of millions of people, are infuriated and terrified at the prospect of Shanghai-style monthslong lockdowns. But is there a coherent theory of change? No, there isn’t. And is this the same sort of movement as Tiananmen Square? Tiananmen Square was a center of power occupied by an openly rebellious horde of thousands and thousands of students for months on end. We’re very far from seeing anything even remotely like that so far. And I think that should also condition our thinking about what kind of a protest this is.

CA: I obviously don’t want to minimize the stakes of a Tiananmen-style response, but, from an economic perspective, how would a crackdown of that kind affect the Chinese economy and the global economy more broadly?

AT: The overall effect to China’s policies is that it already increasingly separates societies from each other. It makes travel difficult. We are on the cusp of beginning to feel that perhaps airline travel back to China was going to become more easy. And it’s quite unlikely that will be the case, given their infection rate right now. Hong Kong opened up for a while, and it’s very unclear whether that can be sustained. And the consequence of that is that cities like Shanghai and Hong Kong, which had hitherto been great mingling spots, will become less and less attractive for Western firms, for global firms and global people to congregate, whether it’s at university or in business or in global cultural gatherings, whether it’s, you know, art shows or music festivals. And that’s the long-run effect.

Cameron Abadi is a deputy editor at Foreign Policy. Twitter: @CameronAbadi

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