The Policy Agenda for the Xi Jinping Administration
- COVID-19 Countermeasures and China's International Relations -

Shin Kawashima
Professor, The University of Tokyo

1. Xi Jinping Tackling the Issues of Maintaining His Administration and Extending His Terms of Office

The spread of the novel coronavirus disease (COVID-19) poses a serious question to the world. Some say that the corona pandemic marks a turning point in time. Others say that it is a problem that we encountered before and are meeting again, or that it has just reappeared on a larger scale. The present author agrees with the latter thinking.

When looking at the transformation and continuity of international relations before and after the outbreak of COVID-19 infection, the topics we should discuss may include the differences in regimes between liberal democracy and authoritarianism, the future of the Bretton-Woods system in a broad sense, and the consequences of the US-China confrontation, or the so-called decoupling between the United States and China.

Viewed from the Chinese perspective, however, none of the following issues may be recognized as its ultimate policy agenda --- the inter-regime competition, the expansion of Chinese models in the world, the competition for hegemony with the United States, and the decoupling. It is of overriding importance for the Xi Jinping administration to stabilize and advance the rule of the CPC, as is seen from the fact that it emphasizes the deepening of the CPC's rule while engaging the prevention of COVID-19 infection and the economic recovery, at the time of recovery from the corona crisis. For the Xi Jinping administration, the 2022 issue of "the change or continuation of the administration" is also crucial. The constitutional amendment in spring 2018 made it possible to extend Xi's term as President of the PRC. Will Xi Jinping extend it? Will he also prolong his term of office as General Secretary of the CPC? 1 Another issue is how to celebrate the 100th anniversary of the establishment of the CPC in July 2021.

The corona pandemic resulted in damage to the current CPC administration. It is the primary task of the Xi Jinping administration to stabilize and strengthen the administration while recovering from the corona damage. Staving off criticism against the status quo and its response to COVID-19, the Xi administration has worked on the recovery of the Chinese economy that underpins the legitimacy of the CPC. However, given the damage that public investment following the Lehman shock caused to the Chinese economy, it is not easy not to follow this bad precedent. 2 Under such circumstances, the top political agenda of the Xi administration will probably be stability and progress in domestic governance and the continuation of the present administration rather than China's hegemony in the world or the proper management of the US-China relations. Consequently, the US-China relationship and other international relations will depend more on China's domestic politics. The Xi administration will eliminate obstacles to the implementation of its top priority agenda and will use whatever means can be used to that end. Xi Jinping visited Jilin Province in July 2020 and inspected agricultural farms. China's food self-sufficiency may be one of his chief concerns in light of the possible prolongation of the US-China confrontation. 3

There is a logical possibility that Xi Jinping does not want to extend his term of office. The Xi administration, however, does not change its policies and political approaches it adopted before the corona pandemic, but rather strengthens them. Xi Jinping has not yet designated his successor. There is an argument that he will not nominate a successor because he fears becoming a lame duck. It is unlikely that he is making preparations for a transfer of power in 2022. Even if a transfer of power is considered as an option, the Xi administration seems to attach primary importance to demonstrating the possibility of its continuation both at home and to the rest of the world. Despite its efforts to promote economic development and technological innovation, it may be far from easy for the Xi administration to strengthen its base and achieve its continuation while maintaining the CPC's one-party dictatorship.

2. Political Damage and Recovery

The initial response of the governments of Hubei Province and Wuhan City to the spread of the COVID-19 infection from the end of 2019 and the subsequent response of the central government were all apparent political blunders. As a massive public backlash spread through social media against the Wuhan government's punishment of Dr. Li Wenliang for whistleblowing, the central government finally posthumously acknowledged the contribution made by Dr. Li. The social media in China has proved that it has a function of "formal objection." However, after a group of medical experts were dispatched to Wuhan from Beijing in mid-January and the central government began to launch a full-fledged response, information control was further tightened, and intellectuals who criticized the central and local governments on the net were detained.

The lockdown of Wuhan City lasted 75 days. During this period, the CPC monitored the behavior of citizens by using social grassroot residents' committees or former work units. At a residents' committee, under the leadership of the "cadres" or CPC members, instructions from Beijing were strictly obeyed by the committee members, and a mutual vigilance system was established. Similar measures were taken by universities as "units" under the leadership of the unit party committee. Furthermore, the militia was also mobilized to block the city. Li Keqiang's work report of the central government mentioned such "activities" of the grassroots cadres and the militia. These suggest that the CPC's "traditional" way of mobilization and management worked well. However, such a situation is capable of giving rise to possibility of various "transactions" between the grassroots cadres and the CPC or central government organizations. It has not been fully verified whether such "rewards" were actually offered and were received or what those "rewards" were. The same is true for the militia.

Needless to say, besides these "traditional" methods, the central government extensively utilized digital communication technologies to collect big data from mobile devices to monitor the movement of people, and to undertake logistics management and the collection of personal information. Together with the above "traditional" methods, these innovative technologies helped to visualize the governing and mobilizing capabilities of the communist government. On the other hand, these efforts by the central government in social management and control may have made visible the domains that are beyond government control. In particular, rural areas distant from cities as well as poverty-stricken areas may have come to be acknowledged to have problems of not only economic development but also of governance. The necessity of strengthening governance in rural areas came to the government's attention earlier than the spread of COVID-19. The significance of the problem is now all the more recognized. 4

With these series of measures, the CPC administration succeeded in preventing the outbreak of COVID-19 infection sooner than expected. Some believe that this is what is only possible under an authoritarian regime. Others are concerned that China may try to propagate in the world a Chinese model of controlling COVID-19. Some developing countries or other countries that have an affinity with authoritarian regimes may want to study the Chinese model, but China cannot afford to publicize and spread it.

The Xi Jinping administration announced the termination of the lockdown in Wuhan and projected the image of "recovery," promoting propaganda that the measures taken by the CPC were appropriate and that the Chinese people should unite to fight COVID-19. It was in April that China declared that it would hold the National People's Congress in May, a "symbol of recovery." It is questionable if the Chinese people believed in this "recovery," but until April, China lifted lockdowns, and daily life gradually began returning to normalcy to some extent.

The PLA was engaged in border blockade operations and more aggressive action in the surrounding waters; it was also busy with natural disaster relief this summer. Amid the outbreak of COVID-19 infection, the automation or full-automation of society and the economy progressed. This trend was favorable to the PLA that emphasizes intelligent war and attempts to promote military-civil fusion. The Xi Jinping administration's commitment of science and technology to a national legitimacy will further enhance the PLA's efforts in intelligence warfare.

3. Hong Kong Problem

From the viewpoint of the Xi Jinping administration, the problems of Hong Kong and Taiwan belong to utterly different domains. Hong Kong is subject to governance under the "one country, two systems" framework. Taiwan is an area under the effective control of the ROC government. The status of Hong Kong has been defined externally by the Sino-British Joint Declaration and internally by the Basic Law of the Hong Kong Special Administrative Region. The right to interpret the Basic Law is stipulated to belong to the National People's Congress. In the elections for the Legislative Council of Hong Kong, it was quite hard for democratic groups to win a majority regardless of whatever efforts they made. Thus, the suppressed democratization movement in Hong Kong had no alternative but to ultimately resort to "violence."

At the time of the return of Hong Kong to Chinese sovereignty in 1997, its economy may have been attractive to mainland China, both in terms of its scale and its nature. But regarding its scale, the Hong Kong economy has now become less attractive to China that has now become the world's second-largest economy. Of course, Hong Kong's function as an international financial center cannot be fulfilled by Shanghai or other Chinese cities. The premise of such a function performed by Hong Kong is considered to have been freedom in Hong Kong society and its judicial system. For the mainlanders who attached great importance to economic development, it was necessary to maintain the status quo of Hong Kong, which constituted a transit point for foreign investment in China, as long as the Chinese economy continuously needs foreign direct investment. It was from the second half of the Hu Jintao administration era that in addition to economic development in China, sovereignty and safety came to be deemed to be significant. The Xi Jinping administration prioritizes "national security" over economic development. This attitude has something in common with its above-mentioned attitude of regarding the maintenance of the CPC dictatorship as an overriding concern. Also, during the spread of COVID-19 infection, China is attempting to promote "economic nationalization." China still emphasizes direct investment from foreign countries, but "economic nationalization" is given a higher priority.

The PRC leadership may look upon Hong Kong as a vulnerable point in the "national security" of China as a whole. If the US Congress adopts the Hong Kong-related bills, China may think that the United States is about to interfere in Hong Kong. The assessment that Hong Kong is not as economically attractive as it used to be may have helped the PRC leadership to deliberate and to adopt the "Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region." Needless to say, there may have been many doubts and debates about the law, but they reached a political decision to formulate and adopt it.

Despite the enactment of the recent law, however, Hong Kong's economic and financial roles will not vanish and are not anticipated to do so. Hong Kongers cannot welcome or accept this kind of change at all. Nevertheless, Hong Kong, which once functioned as a base or a valve for the flow of funds from developed countries to China and its surrounding areas, may continue serving as a base or a valve to help China money and Chinese corporations to enter into the surrounding areas and overseas. At present, Hong Kong stocks are rising, and money is flowing in. This may be the result of the Chinese government's "artifices." But the flow of new China money to Hong Kong is discernible. Many foreign corporations are worried about the current situation, but few have left.

For the Chinese government, the US reaction against the Hong Kong problem seems to have been greater than expected, and the reaction of Hong Kong society was also unexpected. The postponement of the legislative elections scheduled for September may illustrate the Chinese government's sense of crisis.

4. Economic Damage and Recovery

The Chinese economy was severely damaged by the spread of COVID-19 infection, and the Chinese government is making efforts to expedite recovery. Meanwhile, the World Bank estimates China's economic growth rate for fiscal 2020 at one percent, 5 predicting its time of recovery to be faster than any other economy. However, the downturn in China's macro consumption was seen as early as in 2018 and 2019, which was followed by the US-China trade friction and the corona crisis. The spread of COVID-19 infection has, in a sense, promoted automation and gave rise to such new developments as the activation of new industrial fields, the prevalence of online business, and its expansion into rural areas. However, if the economy recovers, the overall downward trend of economic growth seems to continue.

Chinese trade with developed countries invites more concern. There is also apprehension about the progress of so-called decoupling in specific fields such as leading-edge industries. There are apparent moves in various areas to decrease relations with China. Many countries are advancing the domestic production of medical products including masks; simultaneously, corporations of those countries are considering withdrawal from China. Although China emphasizes that her trade with ASEAN and Russia is strong despite the outbreak of COVID-19 infection, this means on the other hand that her trade with other regions is decreasing. Hereafter, China must recover the movement of people and goods with, among others, developed countries. As will be explained later, China is trying to promote the nationalization of leading-edge industries such as semiconductor manufacturing. China has so far been promoting the nationalization of major industries, but in the face of the US's decoupling policy, China is working on the nationalization of leading-edge industries in response to this. However, the Chinese economy is still in need of foreign direct investment, and it is difficult to consume domestic products by domestic demand alone. Currently, China is in the process of "normalizing" traffic with countries and areas where the coronavirus infection has subsided. In doing so, China is coercing consent from those countries for the "Law on Safeguarding National Security in Hong Kong" and on other Chinese policy measures associated with the US-China confrontation. 6

Meanwhile, along with the trade war with the United States over tariffs and intellectual property, the US-China decoupling in the semiconductor industry is also a heavy burden for China. In particular, Chinese corporations, including Huawei, may have great concern about the possible suspension of their transactions with the Taiwan Semiconductor Manufacturing Company, Ltd. (TSMC), whose US-bound investment will go hand in hand with its split with Chinese companies. Although it may not be impossible for some Chinese companies or for Samsung to manufacture substitutes for TSMC products, the quality of the former will be definitely inferior, which is likely to place a handicap on Chinese corporations. Currently, Huawei is purchasing from TSMC a tremendous volume of semiconductor chips and is increasing its stockpiles, but, in the long term, the company will have to manufacture the chips by itself or procure them from other sources.

China's decoupling from the United States in terms of the hardware side of the information and communication infrastructure (submarine cables, GPS service by the BeiDou Navigation Satellite System, etc.) continues regardless of COVID-19 infection. It is the same with the social implementation of 5G. While promoting decoupling from the United States in information and communication technology, China maintains an advantage in leading-edge industries and is trying to overcome economic and social problems at home associated with population growth. It is still unclear how these issues can be overcome. It is a huge stumbling block for the Xi Jinping administration.

5. "Restoration" of China's International Fame?

As evident from the above, the Chinese government places priorities asymmetrically on domestic affairs and on the economy rather than on diplomatic efforts. It may be understandable, therefore, that its foreign policy appears all the more "unskillful." Policies and propaganda are to further strengthen the rule of the CPC and the domestic advancement of the Xi Jinping regime. Officials from the Chinese Ministry of Foreign Affairs responsible for foreign policy are required to behave in line with the domestic rules. The remarks of spokespersons of the Ministry of Foreign Affairs and Chinese ambassadors stationed overseas should be understood from this viewpoint. 7 The supervision of the CPC has been strengthened toward MOFA officials and diplomats.

The so-called mask diplomacy also evolved under the strong supervision of the CPC leadership. At the time of the outbreak of COVID-19 infection, the Chinese public was informed that countries around the world were supporting China. When the spread of the infection slowed down, a narrative was fabricated and disseminated that China had extended a helping hand to many countries in the world, and that they were appreciating the support of China and were thanking China. This crude propaganda turned into an external policy. However, such a policy did not gain support from the international community. Not only in the United States and Australia but also in Northern Europe, people voiced criticism against, among other things, China's harsh power. In Africa as well, Nigerian doctors rejected the dispatch of a Chinese medical team to the country; in Zambia, a wave of criticism rose against Chinese companies. In addition, African countries criticized China for the inhuman nature of its COVID-19 quarantine measures adopted for African communities in Guangzhou. These events represent a global assessment of China's mask diplomacy and of its inflexible foreign policy. In the meantime, the policies of the United States and other developed countries are not necessarily working well; pro-Chinese countries like Serbia, Italy, Ethiopia, and Laos welcome and appreciate the support from China. For countries and regions where no support comes from international organizations or from developed countries except China, support from China is of vital importance.

At present, Chinese foreign policies do not fare well, because the Chinese government is overly prioritizing domestic issues. The US-China confrontation will likely continue for a long time. How will developing countries in the world perceive China in the future? How will developed countries other than the United States and China, regional powers, and emerging countries respond to changes in the world order? In accordance with the answers to be given to these questions, the positions of the United States and China will also change.

6. Japan's Position

Japan's position is becoming more and more difficult as the US-China confrontation becomes acute amid the outbreak of the COVID-19 infection. First, Japan and many neighboring countries are alike in facing China in a difficult situation. China's assertive behavior seen around the Senkaku Islands is one thing. Yet, the economic importance for Japan of the Chinese market and the supply chains with China is another issue. Japan faces a problem of how to strike a balance between territorial and security issues and economic activities. What is worrisome here is that since science and technology are concomitant with both security and the economy, the conventional simple division between politics and the economy is no longer valid. Some developed countries that were in the same position as Japan before the corona pandemic have intensified criticism of China during the outbreak of COVID-19 and have shifted to a decoupling with China. Countries in a position similar to Japan's have now decreased in number only to find Germany and some others.

Second, in terms of the world economic framework, the United States is adopting a relatively isolationist policy, while Japan supports a free and open trade order, and in this respect (at least at the language level), its policy is in tune with China's. Needless to reiterate, Japan depends on the United States for security; the Japan-US alliance is the core of its national defense, but the economy is another thing. Japan must make its own judgment whether it should work on China to serve as a guardian of the existing order through third-country cooperation by utilizing the consensus over free trade between Japan and China.

Third, in East Asia, the Taiwan issue will grow in importance along with the Korean Peninsula issue. How should Japan deal with it? The United States is reinforcing its engagement in Taiwan by the enactment of the National Defense Authorization Act and the Taiwan Travel Act. Currently, these Taiwan-related measures by the United States are within the frameworks of "one Taiwan policy" and the Taiwan-related acts. But the future Taiwan policy of the United States is unpredictable, as is the Chinese response. East Asia is a space where China is a major actor, and, therefore, it is influenced most strongly by China. How should we stabilize the region? --- This is also an issue hard to handle.

Fourth, how should Japan deal with Xi Jinping's postponed visit to the country? Although Japan and the international community's public opinion of China is becoming more negative, the Chinese economy and Chinese tourists will grow in significance for Japan, given the recovery of the Japanese economy to its pre-corona state. It is a difficult problem for the Abe administration to handle, whose approval ratings are declining.

It is not easy to "solve" these difficult problems while associating them with each other. To that end, it will be necessary to have a clear sense of national interests and to address these problems in accordance with priorities --- with desirable images of China, Japan-China relations, and Japan-US relations in mind.

current topics