Impending COVID Surge Expected to Tarnish Xi Jinping’s Image at Home

China’s COVID-19 crisis will worsen further as tens of millions travel from the country’s largest cities to their hometowns in the rural interior during this month’s Lunar New Year celebration. Chinese officials appear ill-prepared to handle a second surge of COVID cases, the effects of which will further harm Xi Jinping’s domestic standing and likely lead him to temporarily dampen tensions in the U.S.-China relationship.

China is currently facing the world’s largest pandemic surge, with Chinese health officials stating that 800 million could soon become infected. Several models predict the surge could result in 500,000 deaths, with some suggesting 1 million could perish.

Nevertheless, the Chinese government ceased reporting daily COVID data in late December, a move that coincided with Xi’s decision to scrap aspects of his zero-COVID policy, including mandatory testing and quarantining. Chinese social media censors have since been overwhelmed by online postings regarding crammed crematoria and citizens coping with medicine and hospital staffing shortages. To handle the surge, Beijing has accelerated efforts to convert sports stadiums previously used as quarantine facilities into temporary emergency wards. Chinese officials expressed fear that New Year-related travel could devastate rural medical systems, too.

In his annual New Year’s Eve speech, Xi tacitly acknowledged COVID’s toll, saying China faces a “time of struggle” as it enters a “new phase” in combating the pandemic. Hinting at protests that rocked China last month, Xi also called for “unity” and “consensus through communication” to achieve “victory.” Xi had not previously addressed skyrocketing COVID caseloads, although Chinese state-run media have released obituaries for top Chinese Communist Party officials and renowned academics who have died from COVID-related illnesses.

Xi’s haphazard handling of the pandemic has also wrought havoc on China’s slowing economy. China’s budget deficit for the first 11 months of 2022 hit a record high of $1.1 trillion, more than double the amount reported in 2021. China’s public finance problems stem from the massive costs associated with Xi’s zero-COVID policy, a 24.4 percent drop in land sale revenue, and tax cuts that failed to stimulate the economy.

While Xi claimed in his speech that China’s economy grew at a nominal rate of more than 4 percent in 2022, such claims conflict with Chinese government data suggesting the economy likely contracted last quarter due to COVID-related disruptions. Last month, for instance, China’s manufacturing and service sector activity fell to their lowest levels in three years.

The upshot: a near-term Chinese economic recovery appears increasingly unrealistic. All told, Beijing’s road to re-opening will face many fits and starts throughout 2023, particularly given China’s refusal to adopt Western-developed vaccines.

Facing myriad crises, Xi will seek to stabilize U.S.-China relations temporarily, albeit without altering China’s problematic behavior, including its tacit support for Russia’s invasion of Ukraine. Instead, Xi will moderate his rhetoric — with one major exception being his fierce, unfounded claims over Taiwan — and extend an olive branch to leaders in Washington, Europe, and the Indo-Pacific.

Xi’s charm offensive will center around securing a reprieve from Washington’s regulatory assault on Chinese companies, dividing the nascent coalition of Western countries working to contain China’s great power ambitions, and laying the groundwork to stimulate China’s economy after the current COVID wave subsides.

For their part, U.S. policymakers must remain clear-eyed about the multi-faceted threat posed by an illiberal and belligerent China. Washington must resist the temptation to enter into negotiations with Beijing on key issues for the sake of “predictability” in the bilateral relationship. For as long as China refuses to cease its broader hostility and its interference in the U.S. political system, “predictability” will be an illusion that spares Beijing the consequences of its actions.

Craig Singleton, a national security expert and former U.S. diplomat, is a senior fellow at the Foundation for Defense of Democracies (FDD), where he serves as the deputy director of FDD’s China Program. For more analysis from Craig and the China Program, please subscribe HERE. Follow Craig on Twitter @CraigMSingleton. Follow FDD on Twitter @FDD. FDD is a Washington, DC-based, nonpartisan research institute focused on national security and foreign policy.