Almost a year ago, China was ground zero of the coronavirus. In the first couple of months of 2020, some American commentators argued the spike of infections and the initial bungling response by local authorities in the Chinese city of Wuhan could constitute China’s “Chernobyl” — an epochal disaster that would expose the fundamental failings of Beijing’s opaque, autocratic, one-party state.
But as 2020 draws to an end, it’s in the United States where the shadow of Chernobyl looms, hovering over a politically-divided nation that passed 300,000 coronavirus-related deaths on Monday amid a mammoth onslaught of new cases. Whatever China’s original sin in the emergence of the disease — and the questions that still surround its official accounting of deaths and infections — its leadership has reason to believe it handled the situation markedly better than geopolitical adversaries in the West. After the outbreak in Wuhan, Chinese authorities clamped down on the spread of the virus and curtailed further community transmission when it flared up in pockets of the country.
Shadowing all was the steady decline in U.S.-China relations. The Trump administration placed tariffs on some Chinese goods, sanctions on some Chinese entities and sought to convince partners in Europe and elsewhere to block the advance of China’s growing tech sector. President Trump and right-wing allies in the West lambaste China for being the unfair beneficiary of the past couple of decades of globalization. In Washington, both Democrats and Republicans now seem convinced of the need to treat China as a systemic rival, a view likely to carry over after the inauguration of President-elect Joe Biden.
Faced with such hostility and suspicion, Xi is hunkering down as he takes his country into a propitious new year. 2021 marks the centennial of the Chinese Communist Party and the advent of a new five-year economic program rolled out by Beijing’s central planners. China’s economy may have rebounded faster than any other major country during the pandemic, but its growth is getting more sluggish and Xi recognizes the need for a deeper pivot.
In speeches through the year, capped by high-level meetings this past week, Xi stressed that China should beef up its domestic market and shift away from decades of export-oriented growth. That would be in keeping with how other more mature economic powers developed over time in the West. But the current mood also marks a reaction to the geopolitical battles of the past half decade.
Some hawks in the Trump administration pushed for what’s dubbed “decoupling,” a process by which the United States could disentangle itself from reliance on Chinese goods and supply chains. Given how intertwined the world’s two biggest economies are, “decoupling” is no easy feat. But now a similarly adversarial worldview is crystallizing in China.
The concept of “dual circulation,” first articulated at a meeting of China’s Politburo in May, emphasizes the importance of strengthening China’s internal market as well as weaning off its reliance on supply chains anchored elsewhere. In a lengthy essay on the matter, James Crabtree of Singapore’s Lee Kuan Yew School of Public Policy argued that it “represents a radical new understanding of globalization and of China’s place within it.”
“The idea is that China’s economic future will be shaped not on a flat vision of seamless integration with the West, but on two distinct circuits: one domestic, the other globally orientated,” explained economic historian Adam Tooze.
“Put more bluntly, while the world was distracted by the drama of the U.S. presidential election, Xi quietly unveiled an economic strategy fit for a new Cold War,” wrote Crabtree. “Both for China and for globalization itself, the results are likely to be profound.”
The contours of this change are still a bit difficult to discern. It suggests a future where China is even less beholden to Western demands and interests than it already is. Xi, though, still casts his government as a responsible international stakeholder and over the weekend reiterated China’s aim to reduce its carbon intensity by 65 percent over the next decade.
We’re seeing a shift in China’s positioning abroad in other ways. A recent piece in the Financial Times charted how China’s lavish spending on its ambitious Belt and Road Initiative — huge infrastructure projects in countries across Asia and Europe backed by massive loans from Chinese state banks — has dramatically dipped in recent years.
“Volatile Sino-US relations and more restrictive access to overseas markets for Chinese companies have prompted a fundamental rethink of growth drivers by Beijing’s top economic planners,” Yu Jie, a senior research fellow at Chatham House, told the FT. “Naturally, if state-owned enterprises decide to switch back to the domestic market in order to follow the leadership’s wishes, the budgeted financial resource for overseas investments will reduce accordingly.”
In China, analysts contend that the West’s fears over the “Beijing consensus” — that is, a future where countries trade and deal along rules shaped by China’s autocratic rulers — are overblown. “Even if Beijing wanted it, to imagine that China will rule the world is at best wishful thinking,” wrote Huang Jing, dean of the Institute of International and Regional Studies in Beijing. “As effective as the Beijing Consensus seems to be in promoting China’s rise so far, it has yet to be generally appreciated, let alone accepted, in the world outside China.”
On the other hand, China’s resilience over the past year and Xi’s continuing authoritarian consolidation at home tells an equally important story. Tooze sees the demise of liberal fantasies in the West that the weight of China’s global connections would inevitably lead to its liberalization.
“It is an argument that turns liberal assumptions about economic history on their head,” he wrote. “It opens a vista on the next decades, which is radical in the sense of being open-ended. It challenges us to imagine that liberal logics will not work out the way we might expect. What if China is making history, not simply playing out its end?”