Analysis: Russia’s war and surging Covid are disrupting Xi Jinping’s big year

After years of careful preparation, the Chinese leader is expected to step into an almost unprecedented third term at the helm of the country and its Communist Party this fall. But instead of a smooth ride, dual crises are threatening to upend the status-quo, with China’s “Now this (situation) is impossible for China — China will either have to be in support of global institutions or it will be against them. That’s it,” said Victor Shih, a professor at University of California San Diego’s School of Global Policy and Strategy. “(For China, it’s turned) into a diplomatic and potentially economic headache.”That risk for China, and by extension Xi, is two-fold: on the one hand, if it violates a raft of On Tuesday, Qin Gang, China’s ambassador to the US, pushed back on “assertions that China knew about, acquiesced to or tacitly supported this war” in an op-ed in the Washington Post, saying instead “had China known about the imminent crisis, we would have tried our best to prevent it” and that Beijing was committed to working for peace.All this may be making some people in Xi’s China uncomfortable.”There are certainly differences of opinion (among) Communist Party members and the business community, who are concerned with China being tied to a pariah state and concerned about falling foul of very dramatic sanctions,” Kassam said.”China’s trade relationship with the world’s democracies is many magnitudes larger than it is with Russia,” she said. Trade between the European Union and China topped $800 billion last year and US-China trade was over $750 billion, according to China’s At least one major company, Apple supplier Foxconn, suspended operations in Shenzhen, before moving into a “closed loop” system where employees who live on campus can work, as the tech hub went under a soft lockdown after recording 66 Covid-19 cases on Saturday.A research note from analysts at financial services group Nomura on Friday said the costs of China’s zero-Covid strategy “will rise significantly as its benefits decline,” making it “much harder for Beijing to achieve its “around 5.5%” GDP growth target for 2022″ — a figure that was already the country’s lowest official growth target in three decades. But China’s leaders, and Xi, may be worrying about more than the macro-economic outlook ahead of the Party Congress, according to Lowy Institute’s Kassam. If sustained, widespread lockdowns could strike at the welfare and livelihoods of the more economically vulnerable in the country — groups whose economic security has been part of Xi’s well publicized signature focus through his first two terms as President.That could see the government more willing to roll out tools to prop up the economy this year than in the past if Covid-19 is not brought under control swiftly, Kassam said.”Because this one will impact ‘everyman’ first …and if we come back to this idea that we are in ‘campaign season’ — so to speak — that becomes really important.” While headwinds from these events may have an impact on “everyman,” in China there is one man who is carefully surveying the landscape and pulling the strings. As these dual crises evolve during a highly sensitive year, experts will be watching closely to see to what extent Xi moves to recalibrate China’s positions both overseas and at home to ensure there are no threats posed to his historic transition into a third term. Because, as China’s latest government work report — often seen as the Chinese equivalent of the State of the Union address in the US — repeatedly made clear: Xi Jinping is the “core” of the Communist Party leadership. And it is of the highest priority to “maintain overall social stability to welcome the victory of the 20th Party Congress.”