Known for its ferocious feline character and formidable strength, the tiger is venerated in Chinese mythology as the King of All Beasts (百兽之王). But as its namesake year gets underway, will the Tiger’s kingly association prove to be auspicious for Beijing?
Using astrology to inform real-world forecasting may seem farfetched, but China’s fortunes in recent years have had odd commonalities with their zodiac animals. Take last year, that of the Ox, which saw a bullish expansion of GDP by 8.1% year over year (albeit coming from a low base). This followed the onset of the COVID-19 pandemic during the Year of the Rat, an animal known for its ability to spread disease and cause disturbance.
Preceding that, the Year of the Pig was something of a ‘pig’s ear’ for Beijing, characterised by messy situations in Hong Kong and Xinjiang, and worsening tensions with Washington. (It was also sadly ironic that China’s pig population was decimated that year by a viral outbreak of swine fever.)
How, then, might this lunar cycle take on tiger-like qualities? Perhaps China will grow its strength and global stature in a way befitting the mighty predator? Or will mounting challenges cause Beijing to retreat to a safe place with its tail between its legs?
I contend that neither of these extremes are likely to materialise. Rather, this Tiger Year will see China increasingly prowl around, occasionally threatening to pounce outside its territory, but ultimately sticking to familiar ground in true cat-like fashion. By way of this quite convoluted metaphor, I am forecasting that China’s affairs at home and abroad will largely maintain their status quo. This will be achieved through stability-focused authoritarian governance, or what I term “stabilitarianism”.
My forecast is based on five key areas: geopolitics, the Olympics, the pandemic, the economy, and domestic politics. As outlined below, I expect that each of these areas will see a mixture of advantageous and disadvantageous developments that ultimately offset each other, leaving China’s fortunes little changed in the aggregate.
At the start of this Year of the Tiger, the most concerning geopolitical issue at hand is not in China but in the Donbas Region of Ukraine. Over 100,000 Russians troops have reportedly been deployed near the area, causing alarm to Kyiv and Western governments, who are threatening sanctions and providing aid to Ukrainian forces.
China is not directly involved in the standoff, but Beijing has publicly stated its support for Moscow. Putin’s presence in Beijing as guest of honour for the Winter Olympics has been followed by a flurry of trade deals. This signals that the two countries are closer than ever, united in their pursuit of an anti-US, anti-Western agenda.
Also uniting the two largest Eurasian nations are their respective extra-territorial interests in Ukraine and Taiwan. There has been much discussion that a Russian invasion of the Ukraine mainland could provide both distraction and legitimisation that would in turn enable a Chinese raid on Taiwan.
However, this view overlooks the unique geopolitics of each situation, and also oversimplifies the nature of Sino-Russian relations, which have a complicated history full of disunity and mistrust. A lack of any formal alliance means that China is not compelled to get involved militarily in Ukraine, and it is unlikely that it will do so. At most, Beijing may support Moscow in the event of Western sanctions, but such aid would also incur significant costs for the Chinese government.
Despite the ongoing decoupling narrative, Western leaders might in fact seek to increase economic interaction with Chinese partners (note, for example, recent positive signals by the British government). China – feeling increasingly isolated internationally and facing growing economic headwinds domestically – is reportedly keen to improve cross-border trade and investment, and may use this as a way to play Western powers off against one other.
But there is a more fundamental reason why Beijing may ultimately decide to distance itself from an aggressive Russia, despite its outwardly supportive stance. A Russian offensive could generate serious international backlash to Putin personally, with which Xi’s China would want to disassociate itself. As we are already seeing, Russian aggression is unifying and agitating the Western democracies, and a similar response could be expected if China were to invade Taiwan.
There is also a high chance that any military offensive in Ukraine would become a protracted conflict that spills over into neighbouring parts of Eastern Europe. It is precisely this sort of scenario that Beijing could not countenance on Taiwan, and which would likely cause Xi’s stabilitarian-minded advisers to dissuade him from taking hasty action there.
One of China’s events of the Tiger year has already taken place in Beijing and its environs: the Winter Olympics. While Putin and a handful of other foreign leaders have attended, the vast majority of countries have sent no senior officials, either because of Pandemic-related impracticalities, or in protest against China’s human rights record. This has somewhat tainted the image of the games and made trouble for sponsors and athletes caught between a growing Sino-Western chasm.
Beijing is also up against a general lack of interest in the winter games relative to the summer version, exacerbated by the physical absence of many athletes, commentators and foreign spectators. Yet the fact that the games have gone ahead, without any major organisational problems, represents a success for the Chinese organisers. Whereas Tokyo was delayed by a year and constantly in doubt, the Beijing games have basically always been expected to proceed on time.
To achieve this, China has demonstrated its ability to systematically control complex situations, something that has become a source of pride and confidence for Beijing during the pandemic. This stands in stark contrast to the performance of most Western governments, where a lack of effective top-down controls has resulted in a consistently high level of infection and death over nearly two years.
Nevertheless, what China may see as impressive and effective, outsiders may view with discomfort. A journalist’s account of life inside the Olympic bubble – where robots have served up meals and mask rules have been strictly enforced – reads like a piece of dystopian fiction. Despite its merits in ensuring a low COVID case count, I suspect that more foreign visitors will be happy to leave the Olympic bubble, rather than become converts to Chinese stabilitarianism.
This bubble set-up at the Olympics – known as a “closed loop” system in Chinese officialspeak – showcases Beijing’s watertight system for controlling infections but also highlight China’s lonesome pursuit of a zero-COVID strategy. Beijing seems unlikely to abandon its approach this year, but the Olympics might offer a chance for at least some adjustments.
One reason for this possibility is that Chinese officials are seeing and hearing first-hand how other countries are learning to live with COVID and seeing diminishing health risks for most people. Also, the Chinese are hosting foreign visitors and rediscovering the importance of in-person international engagement after two years of border closures, albeit with many restrictions in place. I believe that this can only be a positive step towards China’s eventual re-opening and relaxation of controls.
Nevertheless, there are currently no official signals that Beijing intends to change tact, nor any concrete signs of a pandemic exit strategy. Recent outbreaks in China have raised doubts over the efficacy of Chinese vaccines, while importing or imitating foreign mRNA vaccines remains politically awkward, since it would tacitly concede the inadequacy of homegrown jabs. mRNA vaccines are understood to be in development, but the timeline of any rollout is uncertain.
This makes it hard to see any meaningful easing of COVID controls and border restrictions in the near future. As a result, we can expect sustained disruption to supply chains and consumer activity, as well as China’s continued decoupling and distancing from the international community. China-based companies have largely been unable to import foreign talent or fly in key personnel during the pandemic, and these impracticalities will likely continue if not worsen this year.
But the increasing costs of zero COVID are arguably being felt most acutely by ordinary people living on the Chinese mainland and in Hong Kong. While zero COVID has enabled most Chinese people to live a largely normal life for the past two years, recent outbreaks have led to increasingly strange and intolerable situations, from restrictions on accepting foreign packages, to mass testing of garlic crops, the tragic cull of over 2,000 hamsters, and elderly patients lying on beds outside overwhelmed hospitals in Hong Kong.
Over the recent Lunar New Year holiday, many people were again unable to travel home to be with their families, for the second or even third time in as many years. Differing policies across local areas led to a sense of confusion and inconsistency. In some areas, people were coerced into staying away by local authorities, even if they came from a low-risk area and could show a negative test result.
The worst example of this administrative overreach came from a county-level official in Zhoukou, Henan Province, who threatened centralised quarantine and even arrest for anyone who came home. Dong Hong’s statement that such individuals would be deemed to have “maliciously returned home” was met with widespread criticism. It demonstrated how COVID, which Beijing once seemed to have defeated, still poses a significant problem for its mode of stabilitarian governance.
Beijing’s persistence of strict COVID controls represents just one of numerous drags on the Chinese economy at the start of the Tiger year. China’s GDP growth during the Ox year was indeed bullish but largely the result of a pandemic-induced low base in the twelve months prior. The reality is that China’s economy in recent years has trended towards decelerating growth and mounting risks.
While China may still see real GDP expansion in the region of 5% during the year ahead, economies of scale mean that even this small drop in the rate of growth will be consequential for the domestic and global economies. Alongside this slower growth trajectory are growing structural risks, most notably a slowly unfolding crisis of liquidity and instability in the Chinese property sector, as well as continued concerns over excessive leverage in the state-led economy.
To add even more uncertainty to this troubling macro picture, China’s economy is going through a process of structural reform not seen for decades. By this I am referring to the ongoing initiative of the Xi administration to redraw the role of capital in the Chinese economy, to be led more by the state than the market.
The storm of regulatory activity in recent years has upended (or simply ended) sectors from afterschool tutoring to cryptocurrency. Behind this onslaught is a message of “common prosperity”, a realisation by Beijing that rising inequality threatens its stabilitarian ideal. But while Chinese regulators have sought to end the “disorderly expansion of capital”, the unpredictability of regulation has itself been disorderly, leading to devastating losses of capital and livelihoods.
Recent reports show that Beijing is acutely aware of this, cautioning against the “blind” destruction of industries. So, as China’s regulatory environment continues to develop this year, we may expect a slightly more orderly and predictable rollout. And whereas last year’s growth rebound presented a window in which Beijing could afford to be strong handed, less favourable macro conditions this year may make regulatory moves more subdued.
In China, it is this need to carefully balance social and economic priorities that ultimately drives its stabilitarian approach to governance and shapes the macro political environment. The need to maintain stability is especially important this year with the Communist Party set to hold its 20th national congress and seek to further consolidate its power.
Under the precedent established over recent decades, this event should mark Xi’s last in office and the handover to a new administration. But the constitutional changes enacted in 2018 enable Xi to remain president, as is widely expected to be formalised at the October congress.
In the preceding months, Beijing will do everything it takes to ensure stability. An already miniscule space for debate and dissent will be further constricted and politicised. We can expect a flurry of new slogans and displays of loyalty to Xi and the party to be performed at all levels of the bureaucracy.
The aim is for any perceived threats to political stability to be neutralised, limiting instability to the socio-economic environment. And while this will most probably be realised, it does not come without costs for Beijing. Above all, a third term for Xi makes China look more backward and autocratic than it did ten years ago, not just in the eyes of international observers but also many Chinese people. An image of backwardness ultimately does not serve China’s interests.
On a brighter note, once the political theatrics have concluded in November, the months that follow may allow for a gradual relaxation of the social and political environment. I am not saying to expect a sudden sea change in politics and policymaking post congress – in fact, the authorities will seek to avoid any destabilising moves in the immediate aftermath of the event.
But I do expect that the narrative will have moved on by the time we reach the start of the next lunar cycle. Stability will still remain a key concern, as it always is in China. But with Xi’s third term secured, another window for more aggressive policymaking will open up. As to what exactly the Year of Rabbit will entail remains to be seen. But the bunny is arguably the cutest and bounciest of all the zodiac creatures, so that must surely bode well?