The impressive growth of China’s economy since the Chinese Communist Party (CCP), under former Chinese leader Deng Xiaoping (鄧小平), lifted millions of Chinese out of poverty has petered out. Overseas, the country’s image as a “good international citizen” has all but been obliterated. This leaves China at risk of losing its international friends and the party of breaking its unwritten contract with its citizens: Stay out of politics, and we will take care of you.
The cracks in the CCP’s facade of competence at home and trustworthiness abroad have become increasingly manifest since the start of the COVID-19 pandemic. That, geopolitically speaking, is set to go down in history as a watershed moment for China. While the pandemic brought the cracks to the fore, their roots lie in the direction Chinese President Xi Jinping (習近平) has taken the country since his ascension to CCP general secretary in 2012.
It remains to be seen how disastrous Xi’s “zero COVID-19” policy will turn out to be, although we are already seeing the beginnings of a human catastrophe — as the virus runs amok in a largely unprepared healthcare system — to add to the economic devastation that the disease has already caused. After Chinese took to the streets to call for an end to the policy, the government quickly started lifting restrictions. The abruptness of the policy shift, coupled with the dubious timing, would surely result in hundreds of thousands of deaths.
Just weeks ago, the government had said that it would persist with the policy, and that Chinese were lucky to live in the country because the CCP would not sacrifice them in the name of reopening the economy. After the widespread protests, Xi had little choice but to compromise. Now he risks adding runaway deaths to the ravaged economy.
Xi had also planned to elevate the economy and China’s standing in the world by developing an independent, cutting-edge and self-sufficient semiconductor manufacturing industry. Chips are essential components in equipment necessary for almost all aspects of life, and the ability to produce them, or have access to purchase them, are economically crucial and a matter of national security.
That dream, too, lies in tatters.
Globalization of the semiconductor supply chain, necessitated from geographic specialization that promotes innovation and reduces costs, has meant that no one country can access all parts of the chip manufacturing process, be it the raw materials, technical know-how, essential equipment or production facilities. This means that chip production, certainly for the foreseeable future, is a collaborative effort between responsible partners that enjoy mutual trust.
Under Xi, the CCP has squandered that trust and isolated China, which has led to a US-spearheaded consortium of countries that are restricting exports of advanced chips and chipmaking machinery to China, despite objections from local businesses reluctant to see that market cut off. Japan and the Netherlands have agreed in principle to join the ranks of this consortium, and with their cooperation China would no longer be able to purchase equipment needed to produce leading-edge chips.
Perhaps Xi will now see the wisdom of being a “good international citizen” and cultivating the international goodwill, trust and access to soft power that would entail. Through his incompetence and hubris he has risked anger at home and isolation overseas. If the world needed to see further evidence that Taiwan and China were two distinct entities, it would not have to look any further than this.
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