5 Predictions for China in 2023
From a COVID-19 tragedy to a weakened Xi Jinping, here’s what could happen next year.
Welcome to Foreign Policy’s China Brief—the final edition of 2022.
Welcome to Foreign Policy’s China Brief—the final edition of 2022.
This year has been a very bad one for China. But things can always get worse, as this newsletter predicted last year. Making guesses about a country of 1.4 billion people is tricky, and so is trying to peer inside the shuttered windows of Zhongnanhai—the Chinese government headquarters. But below are my best predictions for what’s likely to go wrong, and just possibly right, in 2023.
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1. A COVID-19 Tragedy
China is finally grappling with a second COVID-19 crisis, and the picture looks dire. An internal briefing from China’s Center for Disease Control and Prevention (CDC) reportedly estimated that between Dec. 1 and Dec. 20, 250 million people were infected, further confirming that the government lifting its zero-COVID policy on Dec. 7 was a hasty reaction to the failure of the containment system. The China CDC estimate includes roughly 37 million people who were infected last Tuesday alone.
China’s health care system is already straining to cope due to years of underpreparedness and a focus on containment over treatment. Based on the omicron BA.2 subvariant’s 0.3 percent fatality rate, 250 million people infected means 750,000 likely deaths. At this rate of exponential growth, the first wave could hit 60 percent of the Chinese population by the end of January. That could mean 900 million infections—and 2.7 million deaths.
Of course, much is unknown, and it’s possible that the strain currently spreading in China could be less lethal. We can only hope so. Friends in China have recounted stories—unverified by Foreign Policy—about people contracting COVID-19 without having left their house, suggesting that it could be circulating through the centralized air systems of apartment buildings.
A large number of deaths would have a huge psychological impact, especially when it comes to whether zero-COVID was worth it. Based on India’s experience with COVID-19, China could have had several million deaths in 2020 if the virus had run rampant. But abstract lives saved do nothing to alleviate the grief and pain of each loss. However, don’t expect a public political crisis in China. The impact of COVID-19 deaths has been surprisingly muted worldwide, even in countries with heavy losses.
Furthermore, after 250 million infections, China has officially reported only eight deaths as of Dec. 23. Fear of public anger is one reason why China is clearly lying about the death toll, using a ridiculous methodology to calculate it, and avoiding covering the crisis in the media—even as obituary pages fill up. Even if people know the official figures aren’t real, keeping images of crisis off the TV screen may make it seem less immediate.
2. Weak Economic Recovery
China’s COVID-19 death toll won’t be the only suspicious data in 2023. The political system demands statistics even if they’re impossible to determine, both for propaganda and for internal political reasons. China’s economic statistics are likely to be even dodgier than usual: Given the scale of the current COVID-19 wave, its economy is unlikely to recover in the way the economies of countries such as Vietnam were able to do after lifting strict COVID-19 policies.
China has plenty of pent-up consumer demand, but it will probably trickle out slowly because of people’s fears of contracting COVID-19 and high levels of risk aversion. After a difficult two years, the political pressure on both local and central government officials to present positive data is extremely strong. That will also affect population figures. Researchers argue that China’s population is already declining, and deaths from COVID-19 will make that a tougher issue to handle.
Furthermore, COVID-19 will hit the supply chain by taking out key workers due to either illness or death. And in a worst-case scenario, villages and small towns that haven’t seen big outbreaks could adopt the same methods they did at the beginning of the pandemic, quarantining visitors and blocking travel. The central government would be much more hostile to such methods than in 2020, but its enforcement abilities in the countryside can be slow and relatively weak.
On top of all that, China has many economic problems that aren’t a result of the pandemic. The property sector, which underpins most of the country’s economic growth, continues a slow collapse; the United States is launching a full-throated attempt to decouple its economy from China’s; and the specter of global recession looms. China’s government might be able to prop up the property boom for a bit with stimulus policies, but at some point it will have to face reality.
Equally, U.S. policies targeting Chinese technology are likely to produce some huge official Chinese state investments in the country’s tech industry, but they will depend on government connections and carry a lot of corruption with them, as happened with the failed Big Fund for semiconductors.
3. A Travel Boom
One thing that could come roaring back in 2023 is travel. Domestic demand won’t recover until the current COVID-19 wave passes, but the October holiday might see record numbers. And foreign travel will pick up much sooner. With quarantine times slashed and likely to end entirely, Chinese people are going to travel abroad in huge numbers. (I wrote this before Christmas, and quarantine was ended on Dec. 26, resulting in a rush of plane bookings.) After three years gated off from the rest of the world, those who can afford to travel are desperate to get out of the country, whether to visit kids at school in the United States or go to the beaches in Thailand.
There is also a desire among the young to emigrate from a country that constantly seems to be moving backward. Rather than embracing immigration paranoia, Western countries should look to pick up on a huge wave of potential talent.
4. More Small Protests
After the wave of protests at the end of 2022, China is likely to see more small demonstrations next year. They won’t have a unified narrative like the protests that called for an end to zero-COVID, but it’s now clear that it is possible to put pressure on the authorities—whether to get back stolen money from fraudulent finance companies or to end COVID-19 lockdowns.
Although the ideologically minded protesters who called for Chinese President Xi Jinping to step down have been harassed or arrested, the anti-zero-COVID protesters largely escaped retribution. That may encourage people to push the limits on other issues. Unfortunately, that spells even worse news for the real estate sector: One of the most common and successful forms of protest in China in the last decade has been against any attempt to introduce a property tax.
Xi’s position is also badly weakened. He tied himself closely to the zero-COVID policy, whose success Chinese media constantly boasted about. That plus the economic slowdown have led to serious doubts among the Chinese political elite about his ability to lead. The question is whether they can do anything about it, especially given how successfully Xi ran the tables at the Party Congress in October.
It’s possible that we’ll see a Xi-led tightening of political control this year, just to reassert his power over both the public and the Chinese Communist Party. But what is left to tighten after years of ideological crackdowns?
5. Softer Words and a Quiet Strait
China’s cavalcade of domestic problems seems to have led to nicer words on the international stage—although largely in private. U.S. and other diplomats are reporting that their Chinese counterparts are more willing to talk than before, and the smiling tone of Xi’s meeting with U.S. President Joe Biden at the G-20 summit in November might continue despite the sharp nature of the economic tussle between the two countries.
But that partial thawing feels very uncertain, and even a minor crisis could cause relations to freeze again. Chinese state media is still more xenophobic and anti-American than it was a decade ago, and there are strong incentives to blame the United States for China’s problems.
All these issues also suggest not to expect significant trouble over Taiwan this year. The Chinese government simply has too many problems to deal with at home and can’t afford another crisis, let alone a war. The brief drama over U.S. House Speaker Nancy Pelosi’s visit to the island turned out to be overblown. That doesn’t mean an end to the obsession with so-called reunification and political interference in Taiwan, but the status quo will probably remain.
James Palmer is a deputy editor at Foreign Policy. Twitter: @BeijingPalmer
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