COVID-19 is a turning point for China and its relations with the world. The pandemic's geographic spread, its ever-increasing occurrence, enormous fatality count, and the economic recession that inevitably follows will have enduring impact on the rising power and its global aspirations. At home, a widescale lockdown disrupted internal mobility and pulled the world's second largest economy to a stop. No GDP growth forecast was announced this year, the first in decades, suggesting the severity of the situation and the difficult journey to recovery. New outbreaks are challenging the narrative of victory over the unseen enemy. More importantly, the contagion may forestall the attainment of a “moderately prosperous society,” one of China's two centenary goals. All these show the potential transformative effect of COVID-19. Going forward, the country may take one or a blend of three possible futures. Whichever direction it chooses will have implications beyond its borders.
The first is a more insular China. The world's second largest economy might shelter-in-place from growing international backlash over its initial mishandling of the outbreak. While its medical outreach was appreciated by recipient countries it may not be enough to stifle demands for transparency and accountability over the global pandemic. Its reputation tainted, its initiatives are likely to come under greater scrutiny in an amplification of early criticisms. Its health diplomacy and assertiveness in disputed territories (e.g. border disputes with India) and maritime spaces (e.g. South China Sea) may be seen as “disaster opportunism.” In a post-pandemic credit crunch, worries about its Belt and Road ensnaring more countries into “debt traps” will almost certainly heighten. While China will not necessarily cut ties with the world, it might limit interaction with countries that constantly criticize it or where it feels unwelcomed. Engagement will be confined where its interests are directly affected and the country will deal on a transactional basis.
One potential effect of such a decoupling is the acceleration of the country's drive for technological autonomy. The country already has a lead should it join the growing chorus for more self-reliant supply chains post-pandemic. China may reduce its footprint in the West where its capital perennially raises suspicions, and instead look more to emerging and developing economies for markets and places to invest. Greater emphasis at home can ride on efforts to stimulate domestic recovery. The three critical battles against poverty, pollution, and financial risks may obtain more attention; state-owned enterprise reform and support for private and cutting-edge industries might follow.
We have seen China deploy this insular strategy before: during the late Ming and early Qing dynasties, China turned more inward. Its reopening to the world, in fact, was forced upon it and ushered in a century of humiliation when the country became too weak to fend off European and Japanese depredations. A revival of that form of isolationism may be pushed by some nationalists. Rising anti-foreign sentiment and revulsion against what is seen as ungratefulness and contempt of Chinese aid and investments may help propel such domestic refocus. The Middle Kingdom of yore showed that it can survive and flourish on its own – perhaps the China of the twenty-first century might do so too.
The second direction is a return to Deng Xiaoping's “hide your strength, bide your time, never seek leadership” position of the early reform years. Backlash from exporting the Beijing Consensus may have convinced some at home that it remains ill-timed and that overt efforts to foster China's narrative only inspired rivals to resent the nation. China's step away from Deng's dictum made it a marked man, with many taking it as a challenge against established power structures. Thus, this future would revisit China's strengths – its strategic culture, political continuity and the ability to play the long game. It would restore caution, restraint, and guard against overreach even when opportunities to display leadership seem tempting. A China following this path would continue to support calls for reforming global governance, but shy away from endorsing its own model. Notwithstanding the relative strengths of some aspects of its own developmental model, China's active sharing of its experience and solutions at a time when conventional models are showing signs of stress has stirred the hornet's nest. It may have engendered fears that Beijing is out to reshape the world into its image. Allaying these concerns becomes imperative. As such, while supporting more spaces for the global South, China would no longer project itself as its champion. That position in itself is becoming more tenuous given its economic wherewithal and accusations that it is using this card for its own geopolitical gain. This future is a middle ground between a narrow and transactional interaction with the world and an active leading role in reforming global governance.
The third is a more assertive China ready to take on the spotlight. The success of the nation's model – transitioning from a backward agrarian country to the world's second largest economy without adopting Western-style democracy – has shown that there is no single road to development. Beijing may focus on this to buttress its own legitimacy at home, as well as to relieve stress on similar regimes abroad facing domestic and foreign pressures. Debt relief and possible project renegotiations would show the flexibility of the Belt and Road in extraordinary times. This third direction may also signal a greater readiness to respond to external challenges. This could be in the form of retaliatory tariffs in a trade war, punitive tariffs for injuring China's image or economic statecraft against neighbors or other countries harming China's interests broadly defined. Such a path would also show less tolerance to criticisms and would no longer allow China to be the scapegoat or punching bag especially of a rival – whether during an election or not. The amped up 'wolf-warrior' rhetoric and posturing of some of its top diplomats of late may support this. This direction may pounce on “Westlessness,” – the theme of this year's Munich Security Conference, where the failure of the West to lead in climate change, sustaining globalization, reforming security regimes and global governance and, later on, in pandemic response was highlighted. A Beijing that followed this direction might strongly resist demands for compensation as it tries to fulfill its commitment outlined by President Xi Jinping in his address before the World Health Assembly last month. That included a pledge to make the Chinese COVID-19 vaccine a global public good, a move that may help redeem itself from its initial bungled response to an outbreak that had engulfed the world.
This pandemic could be a crossroads for China. The fallout will subsist for some time despite Beijing's effort to extend much-needed medical aid to hard-hit countries. The arduous road to economic recovery makes a domestic focus convenient. But as China's interests become more global so too its stakes in reforming rules of the road for trade, technology and security. Having a seat in that table will give it a stronger hand in securing those interests. Besides, openings created by American retreats in global governance do not come by easily and may close when a new leadership assumes office in the White House next year. This makes the third future appealing.
However, while China may want to seize the moment, the pandemic will cast a long shadow to its desires. None of the major powers will come out from this tragedy unscathed. Hence, a post-pandemic world may not necessarily be leaderless, but one where there are more heads than one or two. In that configuration, China's interests may be served by ensconcing its third future zeal to a second future form.
