Welcome to Foreign Policy’s China Brief.
The highlights this week: After failed attempts to control COVID-19, food runs short in Shanghai as the city enters full lockdown, the Bucha atrocities leave China’s pro-Russian stance unchanged, and chip substitution plans fall short again.
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Hunger Grows in Locked-Down Shanghai
The entirety of Shanghai is now under lockdown after a previous experiment to shut the city down one half at a time failed to contain a growing COVID-19 outbreak. Some residents have now been under lockdown for over three weeks, with a succession of smaller lockdowns limited to particular districts or compounds. In China, lockdowns are stricter than in many other countries: It can entail a complete ban on leaving one’s home or being limited to one excursion every few days for food.
National coronavirus cases continue to climb steadily, with numbers doubling roughly every five days. Shanghai remains the epicenter of the outbreak, with over 83 percent of cases, although numbers are also growing in neighboring provinces. Mass testing in the city is uncovering a very high number of asymptomatic cases, suggesting that other regions with lower rates of testing probably have large numbers of undetected cases. (China also uses a very particular definition of “asymptomatic” cases, excluding many that would be considered symptomatic in other countries.) The number of deaths remains officially very low, though deaths in old age facilities are likely being underreported.
But the main concern for most Shanghai residents isn’t COVID-19—it’s food. While supply chains and food deliveries, either through commercial services or government-provided packages, held up reasonably well during previous lockdowns, the Shanghai situation has been a disaster. Supermarket shelves are empty, government deliveries inadequate, and commercial services completely overwhelmed; ordering online requires getting up in the early hours of the morning and hoping you’re one of the lucky few who gets through before orders are suspended.
The food scarcity is severe enough that some people are foraging, resulting in cases of food poisoning. Residents are swapping tips online for making vegetables last longer or preparing food that’s past its sell-by date. Unofficial shops have sprung up run by those who stockpiled over the winter, while there have been breakouts from locked-down compounds to buy supplies. Chinese water is not drinkable from the tap, and households usually rely on regular deliveries of bottled water; only a small percentage of upper-middle-class homes have filters as an alternative. Boiling water tackles bacteria but doesn’t remove other pollutants.
It’s unclear why the logistics of this lockdown have failed. One reason may be inconsistency, with delivery services and shops uncertain about what the measures would be from one day to the next. A desire to keep the city isolated has also affected trucking, with some drivers forced to undergo two-week quarantines, and freight prices soaring. Drivers are demanding extra pay of up to 2,000 yuan—over $300, a substantial amount in a poorly paid industry—or refusing trips to Shanghai altogether. Shanghai is also the most important port in China, and the delays there are causing supply chain issues downstream.
Conditions in Shanghai’s isolation wards are worsening, with reports of food and water shortages and fighting among residents. The authorities have just reversed policy on one of the worst decisions, the separation of children from uninfected parents, after a wave of online anger. The sporadic killing of dogs in coronavirus-hit households—not official policy, except briefly in one city—has also prompted rage. Lockdowns of hospitals and prioritization of COVID-19 testing have also caused serious health care problems, while an angry call from an official at the Chinese Center for Disease Control and Prevention complaining about government policies went viral before being censored.
The latest round of lockdowns and coverage seems to have prompted a change in public attitudes toward COVID-19 policy. Over the last two years—with the usual caveats that Chinese opinion is hard to gauge—there’s been broad support for the zero-COVID-19 policy as the pandemic claimed millions of lives in other countries. Nationalists pointed to the policy as a sign of the supposed superiority of Chinese governance. Today, complaints about the policy and discussions of the openness of other countries seriously outnumber expression of support—even from people who are generally strong supporters of the government.
But despite all this, it seems unlikely that the government will abandon zero-case targets any time soon. An editorial by one of China’s vice premiers, Sun Chunlan, emphasized “unswerving adherence” to zero-COVID-19. This is a politically tricky year for Xi Jinping, as the Chinese president secures his third term in power—an important break with previous norms that effectively sets him up as a permanent dictator. Other officials are on edge as a result. That means that stability is top of the agenda—and that nobody can take the risk of veering away from established policy.
What We’re Following
Bucha denials. The revelations of war crimes by Russian forces in Bucha and elsewhere in Ukraine have done nothing to shift Beijing’s pro-Russian standpoint, with Chinese media acknowledging (though not highlighting) the crimes but claiming that the perpetuators are unknown. Online Chinese nationalists, who support Russian President Vladimir Putin, were quick to claim Ukrainians had killed their own civilians, although a significant—and rapidly censored—number of people expressed feelings of anger and shame over China’s position on online forums.
Inside the party, a video compiled last year that describes Putin as a great leader who restored Russia’s fortunes is compulsory viewing for officials—though that ideological education campaign began before the war, and is part of the Communist Party’s consistent line on the Soviet collapse. Chinese firms seem to still be avoiding Russian deals, including commodities (such as oil) that do not face actual sanctions yet.
China’s European diplomacy, meanwhile, has dramatically flopped, with the European Union’s foreign-policy chief describing a “deaf dialogue” in which Beijing ignored European concerns. The Chinese side seems deeply unaware of how serious a crisis Ukraine is for Europe, and of the widespread revulsion against Russia. In part that’s because of a widespread belief that smaller states are puppets of the United States—an idea put forward in propaganda but also sincerely believed, in my experience, by many officials.
Fu’s fall. Prominent public security official Fu Zhenghua, once minister of justice, was expelled from the Communist Party last Thursday and denounced in vitriolic terms. The next stage will inevitably be a trial, a guilty verdict, and perhaps a moderately long prison sentence. Fu, who was originally removed from his position last October, had a long and profitable career keeping the party’s boot on the necks of groups ranging from Falun Gong to internet bloggers. His downfall came because of his close association with Sun Lijun, another high-flying public security official who was removed last year.
Every year under Xi has seen purges of high-level politicians, partially out of fear of possible rivals; tightening control over police and security forces is also important for Xi at a politically uncertain time. Advocates for the party system claim that this represents a cleanup of corrupt officials, but that also raises the question why these “despicable” men, as Fu was described, kept being promoted to high office in the first place.
Lam out. Hong Kong leader Carrie Lam has said she won’t run for a second term. Lam, a former colonial administrator widely seen as a puppet of Beijing, oversaw the destruction of the city’s traditions of free speech and legal independence after the introduction of the national security law, as well as the end of the vestigial democracy introduced in 1997. Her defenders claimed that she cracked down on protests to avoid intervention by Beijing; the symbolic defeat of her historically unpopular pro-Beijing side in the municipal elections of 2019 helped prompt Beijing’s draconian crackdown, however.
The final straw was perhaps the mishandling of the outbreak of the omicron variant of the coronavirus, which has resulted in Hong Kong’s deaths per capita from COVID-19 making world records and the city running short of coffins. Lam once talked of retiring to the United Kingdom. That now seems unlikely: She has been sanctioned by the U.K. and United States, and she claims to keep piles of cash at home as a result.
Tech and Business
Dubious drones in Ukraine. Chinese drone-maker DJI, one of the world’s largest, has found itself playing an uncomfortable role in the war in Ukraine. Ukrainian forces are making widespread use of DJI’s cheap and well-made drones for surveillance and targeting purposes, but they have also raised doubts about the security of the data sent to DJI.
DJI denies it even receives flight data unless users upload it themselves, and technical investigations have sided with the company, though there are also concerns over the company’s Aeroscope technology, which experienced difficulties in the early days of the war. Ukraine, which has already been promised a contingent of explosive-carrying suicide drones by the United States, is looking to change out its technology to U.S. suppliers—but in the meantime, soldiers are using technology some don’t trust.
Chip questions. An investigation by the Information has found that Chinese start-up Moore Threads, hailed as a “little Nvidia” and as a key step forward in the country’s plans to massively increase its domestic chip production, actually makes key use of foreign technology. The company’s supposedly homegrown chip licensed technology from British firm Imagination, making it dependent on foreign suppliers for at least four years.
China’s attempts to create a domestic chip industry had grand goals of making 40 percent of production domestic by 2020. It hit just 15 percent that year, it’s currently at 16 percent, and the chances of making the 70 percent goal originally set for 2025 look basically nonexistent.
But the Moore story also points to the dangers of attempting greater autarky in a country with a poor record of business transparency: As Russia has discovered during its own process of import substitution, corruption mixed with political incentives can lead to the short route of simply importing foreign goods and claiming you made them yourself. (Sending goods over the border, sticking an import label on them, and then selling them as higher-end foreign goods is also common practice in China.)
Audit transparency. Recent economic concerns are helping shape a rare bright spot in the U.S.-China relationship: a deal that would allow greater auditing of Chinese firms by U.S. authorities, thus potentially avoiding the threats of delisting on U.S. exchanges. Yet I’m ultimately skeptical that this will succeed: The concerns around data falling into foreign hands will probably exclude the very information that the United States wants to look at most.
U.S. auditors also have long-running problems understanding Chinese business practices—both legitimate ones and the hidden rules that actually guide most industries and their relationship with the political authorities.