Beyond the human tragedy, the immediate impact of the virus is mostly economic. The only question is how much it slows China’s economy and for how long. Estimates suggest the disruption could eliminate much if not all of China’s projected growth for the first quarter or longer, an outcome that would also slow growth globally given how large and integrated China’s economy has become. Few supply chains do not have at least some Chinese components. In this interconnected world, little stays local for long.
The most lasting impact, though, will likely be the effects this virus has on China’s politics. Political legitimacy in contemporary China is predicated largely on economic performance. Citizens have been willing to accept constraints on personal and political freedom in exchange for a system that provides an improved standard of living. Chinese economic growth was already slowing before the coronavirus outbreak, which means a less-than-ideal situation is fast getting worse.
China’s leaders mostly have themselves to blame. The response to the initial outbreak in early December is revealing. China suffers from a “shoot the messenger” mentality: Criticism, regardless of its merits, is taken as a rebuke of the political leadership, and the Communist Party seeks to silence dissent. As a result, Li Wenliang, one of the doctors who first went public with their concerns, was punished.
Precious weeks were lost as local officials would not assume responsibility lest central authorities subsequently blame them. This paralysis is a consequence of President Xi Jinping’s consolidation of power, which has left provincial officials unable or unwilling to exercise their authority without the central leadership’s blessing. Xi’s signature anti-corruption campaign, arguably more of a political purge, has in many instances replaced capable technocrats with party loyalists. A hallmark of authoritarian systems is the difficulty of admitting error and then self-correcting, and China is a textbook case.
The coronavirus puts the contradictions at the heart of modern China in plain sight. There is the need to get word out to the population so that people can take preventive steps and react appropriately if they fall ill, but the government is afraid to allow information to be shared widely, as doing so could feed unrest along with the narrative that the leadership has failed the people. Policies designed to stem the spread of the virus — quarantine and house arrest — reflect the same dilemma.
It is always a mistake to underestimate China’s ability to rise to challenges, and after its initial stumble, it has shown its unique ability to mobilize resources. But the coronavirus has already emerged as Xi’s biggest challenge. He has concentrated power in his own hands to a degree not seen since Mao Zedong; it is difficult to blame others when you have made yourself first among unequals. It is also the biggest challenge to the Communist Party since the Tiananmen Square protests of 1989. Unless authorities get the situation under control and restore economic growth soon, it has the potential to become much more significant than Tiananmen, as what is at issue is not thousands of students calling for reform but millions of citizens demanding basic competence. Desperate people can do desperate things.
This chapter should also change the way outsiders think about China. Virtually everything written and said about China is premised on the notion of its continued rise. But to assume China’s growth will continue in a steady fashion ignores Chinese history. China’s economic ascent now in its fifth decade, began only after Deng Xiaoping reversed many of Mao’s policies. The potential for political instability exists, as China is a brittle system. The comparison with India is instructive. India has not mobilized or organized itself nearly as well as China, and its growth over the past few decades has averaged only half that of China’s, but India’s democracy and civil society give it a cushion that China lacks.
The U.S. government needs to plan for possible futures in which China’s rise is interrupted. We could see a Xi-led China that turns to nationalism as a distraction in a “wag the dog” scenario in which China would put pressure on Taiwan or Hong Kong. Or we could see a China that turns inward amid political convulsion as Xi is challenged. How long this would take and what would result are unknown. The only thing that is certain is that we cannot assume China’s future will resemble its recent past.