Understanding China's Global Ambitions Part 2A: New Problems atop Old Ones

China faces extraordinary challenges that affect its calculus on the world stage. This is a long one, so it's split into two sections: click the link for Part 2B.

The Shanghai lockdown was one of many signs that things were not going well. Image source

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For other parts of this series, please see:

Part 1 / Audio Version

Part 3/ Audio Version

Part 4 - Coming soon!

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Shanghai… I can't even remember what day it was… May something, 2022. All the days were the same; the balmy spring weather and blossoming trees outside added to my despair inside. It was my second month locked in my apartment because a milder variant of the COVID strain called omicron had swept the city. It was over two years since the country-wide lockdowns that lasted a couple of weeks. Life had gone back to normal. Then, with just a few days' notice, authorities from the central government locked down all of Shanghai – a city of over 26 million people. President Xi Jinping's commitment to 'zero COVID' ensured that various factions of authorities competed with one another to show their zealous adherence to his will, regardless of the public consequences. 

This lockdown was nothing like the 2020 lockdown when our building management allowed us to walk around the property freely, even giving us vouchers to leave and buy groceries. This time, when I tried to step outside to get a breath of fresh air after several days, a bao'an (security guard) greeted me with a megaphone in a full hazmat suit, yelling within inches of my face to go back inside. Once-bustling streets now only gave way to occasional convoys of government officials and da bai (big white), volunteers in white hazmat suits. Teams of da bai came frequently and at random times, often as early as 6 am. They also brought megaphones, "Building seven! Building eight! Assemble outside!" they screamed in Mandarin, announcing mandatory COVID testing. 

Sometimes, the authorities sent people to each door, often banging violently. I shuddered with each knock. Sometimes, they dropped off COVID self-tests, which I was to take and show to the test takers outside so that I could take an 'official test.' Sometimes, they left basic necessities such as vegetables, eggs, and rice. Later, we could purchase food through 'group buying' from local merchants, often at inflated prices. On social media, some scammers boasted about never wanting the lockdown to end; they were making too much money. Water was harder to come by, and I resorted to drinking tin-flavored boiled water for weeks before I could restock. 

The steady stream of information on my phone informed me that each knock could be the da bai ready to take me away. If just one person in my gated community tested positive, even a false positive, authorities would take our entire block to one of several camps indefinitely. Online posts of these camps struck terror across the city: many were squalid with leaky roofs, no hot water, and tight quarters that guaranteed you'd catch COVID if you didn't have it already. Other online posts were even more distressing. In one, a da bai beat a corgi in the street with a shovel, killing it with three horrible blows to the head as its owner looked on helplessly from the back of a van as it took her to a camp. 

The lockdown gave me time to think. At the time, I worked in commodities research and analysis, focusing on the steel industry. For years, I had a front-row seat to much of the Chinese economy, including the construction, manufacturing, and financial sectors, as well as its fiscal and monetary policymaking – all of which impact the market for steel and iron ore, the world's second most liquid commodity after oil. The downturn in consumer retail was palpable, with a growing number of empty storefronts found throughout second and third-tier cities I visited, such as Xiamen and Sanya. Dormant construction sites and empty buildings were everywhere. Still, Shanghai was a comparative bubble of luxury and decadence – just as it had been during the surrounding chaos of the 1920s and 1930s – until it wasn't. 

Spring is like nowhere else in Shanghai, where global cosmopolitans have flocked for generations, but not in 2022. No rooftop parties under pink sunset skies amid glistening skyscrapers. No stylish cafes and boozy brunches along the tree-lined boulevards of the old French Concession. No evening strolls along the Huangpu River, with the historic bund to its west contrasted with the futuristic rainbow lights of the Pudong skyline to its east: just COVID tests, megaphones, and images of brutality on my screen. Although few, if any, perished due to COVID, stories of locals dying from lack of medical care or starvation were common. In some less affluent neighborhoods, authorities welded residents' doors shut to prevent their escape.  

When the lockdown ended, I knew I needed to leave Shanghai. Although COVID fears dissipated, I knew China's worsening economic fundamentals and ever-expanding police state meant that foreigners like me would be increasingly less safe, especially if the government was willing to endanger public safety to that degree. Since I left in July 2022, China has adopted vague new 'anti-espionage' laws that punish things such as accessing government data or talking to officials while encouraging citizens to report 'suspicious foreigners' in exchange for substantial cash rewards. Police in Shanghai raided the offices of major foreign firms such as Bain & Company, questioning workers there and eventually prompting other major legal and auditing firms to exit the country. Foreign passport holders have been slapped with exit bans, forcing them to stay indefinitely at their own expense. People criticizing China online may be taken into police custody, even while transferring at the Hong Kong airport. Writing this series ensures I'll probably never return. 

Why am I telling you all of this? Because I witnessed first-hand the process by which China is increasingly closing itself off to the world, profoundly affecting its behavior on the world stage. I'm not going as far as Peter Zeihan – who says that China will effectively cease to exist in ten years – but China has real and severe problems it must address. I believe that its increased self-isolation and aggressive actions internationally are no accident. These problems, the product of historic factors explored in Part 1 and new ones from recent decades, shape China's foreign policy and ambitions on the world stage.