China could be more dangerous than ever in 2022

Twenty twenty-two is the year that Xi Jinping plans to seize power for life, but it is not going according to script. He is retreating further into his bunker – a self-isolation that is amplifying the Communist party’s arrogance and insecurities. Challenges are mounting at home and abroad, which will make for a bumpy year in China’s growing rivalry with the West.

Xi’s most immediate problem is Covid-19, where he has backed himself into an increasingly untenable ‘zero tolerance’ cul-de-sac, just as most of the rest of the world is learning to live with the virus. Just before the new year, gun-toting police in the city of Jingxi paraded four people accused of breaching Covid control measures through the streets. It was a public shaming reminiscent of the Cultural Revolution. The suspects wore hazmat suits, face masks and goggles, and from their necks hung placards with their name and photo. They were accused of helping others cross China’s sealed border with Vietnam.

Xi’an, a city of 13 million, is under strict lockdown after the biggest outbreak in China since March 2020. The numbers are small by international standards, around 150 a day according to the latest official figures. But Xi’an, of terracotta warrior fame, is a major transport hub. Officials fear a nationwide outbreak could quickly spiral out of control, given the relatively low efficacy of Chinese vaccines and the highly infectious Omicron variant, which is already seeping into the country.

To Xi, this is far more than a health challenge. The party’s supposed triumph over Covid-19 has become a key plank of its propaganda, wheeled out to demonstrate China’s superiority over the stumbling West. It has also become part of the growing cult of Xi, which is reaching a crescendo ahead of a crucial party congress next year that will give him an unprecedented third term and open the way for him to stay leader for life.

Xi’s immediate aim is to salvage the Winter Olympics, which begins in Beijing on February 4 with Covid rules far stricter than at the Summer Olympics held in Tokyo. At the heart of China’s Covid rules is what is called a ‘closed loop management system’ – essentially a straitjacket of health ‘bubbles’ enveloping training, transport, competition and work.

If they were just a matter of sport, the games would probably have been cancelled by now. For the party though, they are essentially a propaganda exercise – arguably more important than the 2008 Summer Olympics in Beijing because the world today is far more wary of China than it was back then. In spite of diplomatic boycotts by the UK, US, Australia and others, Beijing wants to put on a good show. The Covid protocols will also help it quell any outbreaks of a more political nature – woe betide anybody, for instance, who tries to pay a courtesy call on Peng Shuai, the Chinese tennis star who accused a top CCP official of sexual assault, and whose wellbeing is the source of huge concern among her fellow athletes.

Assuming the games go ahead, the guest of honour at the opening ceremony will be Russian President Vladimir Putin. That was confirmed at a virtual summit between the two leaders earlier this month, during which the ‘dear friends’ waved awkwardly at each other and Xi declared, ‘We firmly support each other on issues concerning each other’s core interests and safeguarding the dignity of each country.’

More jittery policy types in Washington worry that Russia’s sabre rattling over Ukraine might in some way be coordinated with China’s intimidation of Taiwan. That’s unlikely, at least at a formal level. The relationship is best seen as opportunistic, given the strength of historic animosities, but opportunism can still be dangerous. At the very least, Xi will be watching the West’s reaction to any Russian aggression in Ukraine as he calibrates his own actions against Taiwan.

China continues to intimidate the self-governing democratic island in multiple ways that fall short (often just short) of armed conflict. Though with each wave of harassing runs by Chinese bombers, knowledge of the island internationally and respect for its defiance grows. Taiwan’s defence in the event of an invasion, or even a blockade, has become one of the key preoccupations of America’s foreign policy establishment.

Logic would suggest that Xi Jinping is unlikely to make an immediate lunge for Taiwan because he has too many other challenges. The country’s property bubble continues to deflate – a slow-motion implosion of what has been the economy’s most important driver. The tottering property sector is a microcosm of the broader economy, characterised by opacity, heavy debt and increasingly wasteful investment. The private sector, and tech firms in particular, are being hobbled as the party tightens its control of business. The trade and technology war with the US shows no sign of letting up. Even the most deluded of foreign investors are getting jittery. The days of heady double-digit growth are over. Stagnation beckons.

The year 2022 may well be the year of Peak China, with the Party facing the sort of decay and decline it wishes on the West. But Peak China may well be a more dangerous China, more willing to lash out overseas and generally burnish its nationalist credentials as it faces greater challenges at home – which is one reason why more aggression against Taiwan in 2022 cannot be ruled out.

Xi has not left China since January 2020. During almost two years of closed borders, the world has not only grown more wary, but China’s aggressive ‘wolf warrior’ diplomacy has become wearisome and counterproductive. Australia and Lithuania have demonstrated the value of principled defiance in the face of Chinese bullying. If China raises the stakes further with plucky Lithuania, an EU member which allowed Taiwan to open a de facto embassy in Vilnius, it is likely to provoke a more assertive reaction from Brussels, which hitherto has been more cautious in its dealing with Beijing.

Xi and the paranoid old men that surround him see every setback, every criticism, as part of a conspiracy to contain China’s rightful rise, masterminded by Washington. If only Joe Biden was so clever. Instead, the global pushback against China is a reaction to its own behaviour. The CCP has become its own worst enemy. Blame for its dwindling stock of soft power can be laid almost entirely at the door of Xi Jinping. Yet self-awareness is in short supply in Zhongnanhai, the party’s leadership compound in Beijing – and that is perhaps the biggest danger for the West in 2022.