President Xi facing difficulties

ByUzair Ali

He is in the finance sector


June 4, 2022

President Xi Facing Difficulties

Uzair Ali describes a tough situation faced by a powerful politician

Though President Xi Facing Difficulties & holds enormous power and his authority is widely recognised yet President Xi has experienced discomfiture recently. He has faced opposition about his policy to keep mum about Russian aggression against Ukraine. His agreement with Russia is now considered partially instrumental in prolonging the war in Europe that has led to increasing tensions between the West and China and the suspicions between them have grown manifold. Xi’s support to Putin has also resulted in limiting deliveries of important finished goods and components from China to the West leading to more tension and a wish to reduce western dependence on Chinese supply. It is more than clear that China is not ready yet to challenge the democracies head on as it needs more trade and export earnings from the West to finance its continuing rise from poverty and to pay for its large modernised armed forces.

It is notable that President XI tries to avoid all mention of Ukraine yet it is the biggest preoccupation of his main ally, Russia. China has made limited low profile statements about the desirability of peace and a negotiated settlement, whilst staying neutral in UN votes. China is offering some economic help to Russia as an alternative trading partner to the West but it is careful not to infringe western sanctions. It is, however, also obvious that China does not seem ready to back Russia at the cost of economic damage to herself and in this respect China is clearly more watchful of the West that has taken very strong exception to the Russian aggression.

Many observes opine that China views Ukraine through the prism of Taiwan and does not welcome the Russian attempt to seize all or parts of Ukraine being handled so badly that it sensitises the democracies more to a possible future threat to Taiwan. China is also conscious that Russian action has also persuaded the West to improve its responses to a live situation and to consider how to re-arm. In this context, the language Chinese officially uses about the Russian aggression is sparse and careful about respecting sovereignty but leaving open how a sovereign area is defined. The Chinese approach to Russia is to help it quietly and privately where it can but to avoid much collateral diplomatic and trade damage from the crisis and expect that the crisis passes away soon.

President Xi is also cornered about his zero-Covid strategy though this brutal action proved successful in 2020 but its repeated use has annoyed his compatriots. It is reported that in recent weeks large cities have been in lockdown disrupting trade and economic output considerably. Shanghai has been in lockdown for seven weeks and the authorities have just tightened the rules further, denying people access to food deliveries from anyone other than the state. Many people contracting Covid are taken away from their homes and put into inadequate accommodation to recover as best they can. Simultaneously, the Covid-free majority faces very strict controls and this policy is considered a kind of house arrest, with the state experiencing difficulties in keeping them supplied with food and other necessities.

To add to woes is that social media is heavily censored though some foreign journalists confirm the rising levels of criticism about what is happening from people growing tired of more Covid lockdowns. It is therefore noted that China is not taking up the western way out that consists of achieving 100 per cent and then allowing milder versions of the disease to circulate whilst people resume a more normal life. Until Xi changes policy China might face more months of sporadic and unpredictable disruption in economic activity. The current situation points out that the zero-Covid strategy is showing China as an unreliable trading partner compelling its trading partners to search for alternative sources of supply.

Despite the difficulties faced by him, it seems likely President Xi will hold things together long enough to secure a near unanimous vote to his continuing in office this autumn. If he does this by not admitting the need for policy change on Covid he will do more economic damage and add to the numbers of those in China who quietly disagree with him. The Covid experience reinforces the damage being done to the economy by more reliance on nationalised industries, price controls and government interventions, as a complement to more aggressive regulation and taxation of entrepreneurs. China is experiencing difficulties in carrying on the economic dialogue which will mean slower growth and more internal tensions to come.

It must be quite worrying for President Xi that he his critics in the Communist Party and that too in the top echelons of the party. Once his critics start to point out that mistakes are proving costly then it would be difficult for him to keep his position secure. The time is short for him as he has to rectify matters before the 20th party Congress. It is generally assumed that he will overcome his difficulties but in a secretive governance system of China it cannot be said with assurance. TW

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