In 2022, as war returned to Europe; millions suffered due to costlier food and energy and ever more devastating natural disasters; and America’s vulnerable democracy deepened its confrontation against an array of authoritarian powers, China’s fate was further submitted to the will of one man.
China’s leaders, whose country’s rise had been facilitated by geopolitical stability and growing economic interdependence, saw both opportunity and threat in the year’s turbulence and fragmentation. While Russia’s invasion of Ukraine failed to break Western resolve, highlighted questions about the battle-readiness of China’s military, and hurt China’s standing in Europe for its rhetorical support of Putin, China nonetheless gained from Russia’s strategic subordination. Heightened tensions reinforced Xi Jinping’s calls for struggle against external threats and his vision of an expansive national security-driven domestic policy and greater self-reliance.
In the year to come, China’s evolution away from a Covid-zero posture may prompt yet more anger and disillusionment as its people confront an inadequately prepared healthcare system. The property sector will continue to be a drag on consumer confidence and economic growth. China may seek to facilitate a face-saving off-ramp for Vladimir Putin in Ukraine as part of an effort to reset its relations with Europe. America’s new, Republican-controlled House of Representatives may flirt with symbolically cheap, but strategically dubious provocations of Beijing. China’s continued intransigence on debt relief may sour relations with parts of the developing world.
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At the 20th Party Congress, Xi asserted his political dominance as loyalists filled the new Standing Committee. During his work report, Xi Jinping signaled policy continuity while warning the Party to “be ready to withstand high winds, choppy waters, and even dangerous storms.”
Li Qiang, previously the Shanghai party secretary, was tapped to replace premier Li Keqiang. Cai Qi, who first worked with Xi in Fujian; Ding Xuexiang, an aide to Xi; and Li Xi, Guangdong party secretary, also joined the Standing Committee. Li Zhanshu, Wang Yang, and Han Zheng stepped down, while Zhao Leji, who oversaw the Party’s internal control apparatus, and Wang Huning, the Party’s chief ideologue, remained. Outside the Standing Committee, Wang Yi appeared positioned to replace Yang Jiechi as the Party’s head of foreign affairs and the ambassador to America, Qin Gang, was signaled as a likely future foreign minister by his appointment to the Central Committee. No women were appointed to the Politburo for the first time in 25 years.
China maintained its Covid-zero policy until widespread year-end protests and accelerating economic fallout delivered a moderation in policy and a renewed focus on vaccination. Hard lockdowns of entire cities had caused untold hardship and disruption. Now, hundreds of millions are poised to be infected and as many as two million may die in the coming months.
China’s military, which launched its third aircraft carrier, Fujian, rehearsed a blockade of Taiwan in retaliation for its hosting of Nancy Pelosi, the highest ranking American politician to visit in two decades. President Biden reiterated that the United States would come to Taiwan’s defense were it to be attacked by China, despite the White House’s no less insistent denials that there was no change in official policy. The United States began formal trade negotiations and delivered additional defense support for the island. Other countries also rejected Taiwan’s isolation, continuing to send delegations. Tsai Ing-Wen resigned as head of the DPP party after rival party KMT won a majority of local elections.
Xi Jinping visited Hong Kong to mark the twenty-fifth anniversary of its transfer of sovereignty and the triumph of the Communist Party’s political suppression of the city. More than a hundred thousand have departed the city in the past year. John Lee replaced Carrie Lam as the city’s chief executive and eased the city’s Covid policies. Macau’s tourism economy remained pressured; all six of the current casino concessionaires had their licenses renewed for ten years.
The technological dimension of America’s competition with China hardened. The United States imposed additional controls intended to retard China’s ability to produce advanced semiconductors while investing billions in industrial subsidies of its own. DJI, a dronemaker, and BGI Genomics were among the companies subject to new investment bans; the FCC blocked sales of new telecommunications and surveillance equipment by Huawei and several other companies. Scrutiny of TikTok continued as the White House weighed an agreement intended to mitigate the risk of Beijing weaponizing the popular app. The two countries reached a rare understanding on greater US oversight of the audited financials of Chinese companies listed on American stock exchanges, avoiding the threat of delistings. The Department of Justice filed a series of charges related to Chinese espionage activity. At a year-end G20 summit, Biden and Xi met in person for the first time since the former’s inauguration, agreeing to resume climate negotiations and dialogues between their senior leaders.
Beijing refused to condemn Russia’s invasion of Ukraine, as did many major non-Western nations, and amplified Russian propaganda. After the countries declared a partnership with “no limits” just prior to the invasion, China’s foreign minister, Wang Yi, affirmed a desire to deepen the bilateral relationship “at all levels” during a year-end meeting with his Russian counterpart. Trade between the nations increased, although Chinese companies were mindful to avoid triggering Western secondary sanctions. The war increased resolve in the United States to prevent a similar move against Taiwan.
A reset to China-Europe relations was hindered by the former’s stance on Ukraine. NATO for the first time cited China as a “challenge” to its interests, security, and values, while expressing continued openness to constructive engagement. Germany’s new government struggled to calibrate its stance on China as the twin pillars of its economic model, Russian gas and exports to China, faltered. Chancellor Olaf Schulz’s decision to allow COSCO to take a strategic stake in the Hamburg port signaled the country was not ready to break its dependence. The European Court of Human Rights effectively ended extraditions to China. The Netherlands and Ireland ordered the closure of Chinese “police service stations” in their countries, with others expected to follow. Further indications emerged of a far-reaching effort by China to interfere in Canada’s elections. Beijing named a new ambassador to the EU after a ten month delay.
Xi Jinping resumed international travel. His first international trip since the pandemic to Central Asia reinforced the shift in the balance of power away from Russia in that region while a later visit to Saudi Arabia highlighted the continued ascendancy of China’s influence in the Middle East relative to the United States. Xi also traveled to the G20 and APEC summits and received a steady stream of visitors to Beijing, including the Vietnamese General Secretary.
China reassessed lending via its Belt and Road program as the slowing global economy put the country’s debtors in a difficult position. An April study reported that 60% of China’s foreign loans were to countries experiencing debt crisis. The election of Luiz Inacio Lula da Silva as president of Brazil raised Beijing’s hopes that its “old friend” would elevate bilateral ties. The Philippines’ new president, Ferdinand Marcos, steered closer to the United States after his predecessor’s unsuccessful attempt to translate support for Beijing into economic benefits. The Solomon Islands and China reached a security agreement that alarmed American officials about the prospect of a Chinese military base in the strategically important island chain. The United States announced new embassies in Kiribati and Tonga to shore up its influence.
The United Nations’ human rights office released a long-delayed report that concluded China’s repression of its Uyghur population “may constitute international crimes, in particular crimes against humanity.” The European Union was poised to join the United States in blocking exports made with forced labor from the region.
Economy and business
Economic growth slowed. A weakening housing market felled homebuilders, banks, the finances of local governments, and the wealth of countless families, some of whom began refusing to pay their mortgages in semi-coordinated protest. Property sales were 30% lower through much of the year relative to the last. GDP growth for the year was estimated at around 3%. Youth unemployment increased to nearly one fifth. Stocks declined by nearly a fifth.
BYD reported a surge in sales of hybrid and electric vehicles, becoming one of the nation’s top-selling automotive brands. Tencent reported its first quarterly decline in revenue compared to the prior year. Ping An pressed HSBC to split its Asian and Western assets.
Prospects were little improved for Chinese tech giants following last year’s regulatory rout. Didi, the ride-hailing firm, was fined $1.2 billion for breaking data-security laws, the likely denoument of a series of punishments after its unapproved IPO in New York last year. Richard Liu resigned as CEO of JD.com, the retail giant he founded, and settled a civil suit by a woman who accused him of rape.
An anticorruption probe targeting the semiconductor industry was interpreted as evidence of frustration with the country’s progress towards technological self-reliance. Xiao Jianhua, a politically-connected banker abducted by Chinese agents from Hong Kong in 2017, was sentenced to 13 years in prison for corruption.
Chinese regulators approved the C919, an indigenously designed and manufactured passenger aircraft, albeit with extensive foreign components, for service. A China Eastern Airlines jet crashed in what was considered to be an intentional act.
Society and culture
Beijing hosted the Winter Olympics, with Chinese athletes securing fifteen medals, nine of them gold. The talent of Eileen Gu, an American-born freestyle skier and model, was at times overshadowed by her decision to compete for China.
An historic heatwave forced emergency measures, including rolling blackouts in some cities. A massive breach of a police database containing information on as many as 1 billion Chinese underscored the reach of China’s surveillance state.
Two videos heightened national dialogue on women’s rights. In January, footage of a woman chained in a doorless shed went viral on Douyin and cast a harsh spotlight on human trafficking; in June, a video of men attacking four women at a restaurant in Tangshan prompted further outrage about misogynistic violence. In October, the country revised its Women’s Rights and Interests Protection Law. China recorded the fewest births since 1950.
The Chinese box office languished under Covid restrictions. Return to Dust, a film about an arranged marriage set amid rural hardship, received prominent domestic and international attention. Notable books included a political history of China’s 1980s; surveys of China’s tech landscape and its implications for the world; and multiple titles mourning a lost Hong Kong. Meanwhile, the Wall Street Journal found the man behind “most famous face in China.”
Jiang Zemin, who led China’s transformation after Tiananmen, died at 96. Zhang Sizhi, a lawyer to dissidents, died at 94. Bao Tong, former aide to Zhao Ziyang and later liberal critic of the Communist Party, died at 90.
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In the days prior to the 20th Party Congress, a lone protester, a research scientist named Peng Lifa whose condition is unknown, hung banners from Sitong Bridge in Beijing which read, in part: “We want food, not PCR tests. We want freedom, not lockdowns. We want respect, not lies. We want reform, not a cultural revolution. We want a vote, not a leader. We want to be citizens, not slaves.”
Those words were a belated reply to a message from earlier in the year, amid Shanghai’s lockdown, in which a government drone flew among that city’s highrises and warned, “Please comply with Covid restrictions. Control your soul’s desire for freedom. Do not open the window or sing.”
In the days after the banner was hung from Sitong Bridge, its words would be reposted in and outside of China. The Party may have turned its back on the lessons of one-man rule; an increasingly visible number of China’s people have not.