China’s role in the war in Ukraine once again dominated debates. At the Shangri La Security Forum in Singapore on Sunday, Ukrainian President Volodymyr Zelenskiy criticized China’s handling of the attack against his country in an unusually open manner. Among other things, he accused Beijing of undermining a planned peace conference in Switzerland on Russia’s behalf. He said that Moscow was using Chinese diplomats to dissuade other countries from attending the conference in mid-June.
These harsh words show Zelenskiy’s frustration, who has repeatedly attempted to reach out to China since Russia’s invasion – and apparently no longer has much hope of a constructive stance from Beijing. Zelenskiy also pointed to the deliveries of weapons-grade goods from Chinese companies to Russia.
These accusations were the focus of US Deputy Secretary of the Treasury Wally Adeyemo’s visit to Berlin. Adeyemo announced that the US would soon take action against exports of military goods from China to Russia. He urged Europe and Germany to back up their words with action, as Michael Radunski reports.
The Covid pandemic seems almost forgotten in comparison. However, it has had serious consequences in China. Fabian Peltsch spoke with sociologist Bin Xu about how China’s strict zero Covid policy has affected the middle class in particular – and why the government refuses to reappraise the pandemic years.
Ukrainian President Volodymyr Zelenskiy has accused China of “working hard” to prevent countries from attending the Ukraine peace conference in Switzerland in mid-June. According to the AP news agency, Zelenskiy told reporters at Sunday’s Shangri-La Dialogue in Singapore that Beijing was helping the Kremlin to undermine the top-level meeting in Switzerland. “Russia, using Chinese influence on the region, using Chinese diplomats, does everything to disrupt the peace summit.” He said it was regrettable that “such a big, independent, powerful country as China is an instrument in [the] hands of [Russian President Vladimir] Putin.”
It is an unusual tone that shows Zelenskiy’s frustration with Beijing. Since the Russian invasion, his government has repeatedly attempted to reach out to China behind the scenes, but this has been in vain. He once spoke to President Xi Jinping on the phone during the war. “He promised me China would stand aside, would not support Russia with weapons,” Zelenskiy said, according to the US news platform Politico. “Today, there is intelligence that somehow, some way, some things come to Russia’s markets via China … elements of Russia’s weaponry come from China.” This also includes parts for the construction of weapons. Zelenskiy said that he had not met with any members of the Chinese delegation.
The Shangri-La Dialogue is the most important security conference in Asia. At the conference, China’s Defense Minister Dong Jun also met bilaterally with US Defense Secretary Lloyd Austin. This is a step forward, as Dong’s predecessor, Li Shangfu, had rejected such a meeting in 2023. Austin emphasized the importance of remaining in dialogue. “Every conversation is not going to be a happy conversation, but it is important that we continue to talk to each other,” Austin said in his speech on Saturday. He emphasized that despite obvious disagreements, he saw no immediate danger of escalation.
Nevertheless, the simmering conflict between the United States and China overshadowed the conference. Austin spoke of a “new convergence around nearly all aspects of security” in the Indo-Pacific and praised the growing cooperation with regional allies. According to Bloomberg, the Chinese delegation, in turn, showed an unusually strong public presence in Singapore through a series of press conferences, speeches and interjections. Chinese representatives criticized US support for Taiwan, warned against the establishment of an Asian NATO and accused Washington of a “technology blockade” against Beijing.
“They keep testing China’s red lines,” said Dong in his speech, describing the USA’s Taiwan policy as a “salami slicing strategy” with which they are constantly expanding the boundaries of support. Conversely, the West accuses China of salami-slicing in the South China Sea, for example, by creating artificial islands.
Amid this heated atmosphere, Zelenskiy expressed his “disappointment” in his speech that some heads of state and government had not yet confirmed their participation in the peace summit planned for his country in Switzerland in mid-June – including US President Joe Biden.
Although over 100 countries have confirmed their participation, it depends on who will attend. German Chancellor Olaf Scholz will be there, as will EU Commission President Ursula von der Leyen. In his speech, Zelenskiy appealed for as many Asian countries as possible to attend.
The fact that the Ukrainian president came to Singapore despite the difficult situation on the front shows how vital the support of as many countries worldwide as possible is to him. However, according to reports, China will only participate in a peace conference if Russia is invited. “China always maintains that the international peace conference needs to meet the three important elements of recognition from both Russia and Ukraine, equal participation of all parties, and fair discussion of all peace plans,” Foreign Ministry spokeswoman Mao Ning said on Friday.
Security expert and former US ambassador to NATO Kurt Volker believes China might send someone from the working level to Switzerland. “That would at least be a small success for Ukraine.” And the presence of a high-ranking politician from Beijing would be a major success, Volker told Table.Briefings. In general, the West must convince China that it is in its own interest to act constructively, says Volker. There are some approaches. For example, China wants to be involved in rebuilding Ukraine after the war. “China is only looking out for Chinese interests,” Volker said, adding that Beijing would always help Russia if it benefited China.
Dong Jun was not present during Zelenskiy’s speech. Although he mentioned the peace conference in his speech, he emphasized China’s commitment to peace talks with “a responsible attitude.” Dong also stressed that his country had never supplied weapons to either side in the conflict. He did not comment on the accusations that Chinese dual-use products had found their way to Russia.
Wally Adeyemo chose friendly words in Berlin, but his message is a severe warning to China: “We must make the choice stark for China: Chinese firms can either do business in our economies or they can equip Russia’s war machine with dual-use goods.” And the US Deputy Secretary of the Treasury immediately followed up by giving Beijing a little help in deciding: “They cannot do both.”
Adeyemo traveled to Ukraine last week specifically to gain a first-hand overview of the situation. On his way back to the US, he stopped in Berlin and gave a firm speech in the German capital. The reason: The USA wants to increase the pressure, preferably together with its European partners. Adeyemo announced that Washington would take action in the coming weeks.
Although the Deputy Secretary did not go into details, he said he coordinated closely with the German government. Adeyemo’s message is clear. The US must do two things: Strengthen Ukraine’s troops and cut off supplies to the Russian fighters.
For the first part, Western countries have now permitted Ukraine to direct their weapons at Russian territory. After the US, Germany also gave Ukraine the green light on Friday to use supplied weapons against targets in the Russian border area with the Kharkiv region. Now, action must also be taken on the second part, Adeyemo said: halting supplies for Russia’s war machine. And the United States is certain that China has a pivotal role to play here.
He said no other country has the necessary capacities, such as processing machines, microelectronics, and other products Russia needs for weapons production. But without China, Russia would not be able to continue its weapons production, let alone the war against Ukraine on this scale.
Adeyemo spoke frankly in Berlin. Last year, Russia imported sensitive dual-use goods worth 5.2 billion US dollars from Chinese manufacturers. That is an increase of over 40 percent – in just one year. “The Kremlin knows it can only meet its military goals with China’s assistance.”
A few weeks ago, US officials identified several Chinese companies as responsible for these exports. Among them:
“These supplies really help Russia rebuild and improve its war machine to destroy Ukraine,” Alexander Gabuev told Table.Briefings. The director of the Carnegie Russia Eurasia Centre says: “This is not normal trade for civilian purposes, like buying Russian oil, which is grudgingly tolerated. This is support that is crucial to the military.” China has so far vehemently denied providing direct military aid to Russia. However, there is increasing evidence of Chinese involvement on the battlefields in Ukraine.
Adeyemo made it clear in Berlin that now is the time for action, not just words. “If China does not put a stop to the trade of dual-use goods to Russia, we will have to take action to hold them accountable.” In Berlin, the US Deputy Secretary of the Treasury made it very clear who he meant: The EU is China’s largest export market, and China is still the largest exporter to the EU in key sectors such as chemicals and machinery.
“We recognize the EU’s economic relationship with China is mutually significant, and we must make the choice stark for China.” But: “We must make clear to Chinese companies that we are all prepared to use our sanctions and export controls to hold them accountable.” Adeyemo emphasized the word “all.” Following the trilateral summit with French President Emmanuel Macron and Chinese President Xi Jinping in May, the EU Commission President also underlined that China must make more efforts to restrict the supply of dual-use goods to Russia. Macron explained that Xi had promised him that he would monitor these deliveries more closely. Whether this will be followed by action is uncertain.
Meanwhile, Adeyemo’s determined stance in Berlin matches the events of recent weeks. Most recently, US Deputy Secretary of State Kurt Campbell accused China’s leadership of supporting Russia’s war in Ukraine. Campbell also warned that Beijing must reckon with further sanctions as a result.
Shortly before Adeyemo left for the Berlin airport, he had some friendly words. Under President Joe Biden’s administration, he had never visited a country as often as Germany. This could be interpreted as an expression of closeness and friendship. However, it could also be a sign of how difficult it is to get their German partner to agree on a common line regarding China.
Beijing abruptly abandoned its “zero COVID” policy at the end of 2022. Many in the West perceived this step as surprising and contradictory. Was the government more successful within China in communicating the logic of suddenly abandoning the draconian policies?
No. The government did not give any clear explanations for the abrupt policy change. Rather, since December 2022, the “zero COVID” policy (清零政策), once a sacred concept, has been systematically removed from official representations.
What is the situation today – what narrative does the Party want to go down in history books, when it comes to the pandemic? Are there still media reports and exhibitions celebrating China’s heroic acts?
In general, there are very few official narratives of the COVID response. The only existing exhibit, to the best of my knowledge, is the one in the Wuhan Archives, which expectedly focuses on the state and the people’s heroic effort to combat the virus.
Isn’t that a contradiction to the aforementioned open departure?
The subtlety here is that the official narratives mostly highlight the perceived success in Wuhan but are silent about the 2022 outbreak, let alone the massive infection and deaths after the end of the policy. Even the self-complimentary narratives are very few because any mention of the pandemic response would lead to people’s natural tendency to recall the tragedies in 2022. The state seemed to decide not to talk about the pandemic.
You mention in your research that the Chinese state pursued “performative intentions” in the fight against the pandemic. Can you elaborate on what those intentions are and what they were aiming for?
The Chinese state clearly wanted to demonstrate its strong state image, that is, an image of a competent state that is able to manage large crises successfully, eliminate social problems, and even control natural forces. Such a strong state image is best presented in the number “zero” – a perfect way to show that the state can eliminate – rather than alleviate – problems. This elimination goal could also be found in many other public policies, such as the poverty program that aimed at eliminating absolute poverty by the end of 2020 – an ambitious goal with a clear deadline.
Beijing considered the fight against the pandemic a kind of global competition between nations.
The strong state image also means China has so-called “institutional advantages” in the competition for global leadership. During the pandemic, the competition meant a competition of numbers – cases of infection and deaths. Thus, there were quite a lot of political stakes in the number “zero,” and the state tried everything to maintain the strong image even if the reality, especially the evolution of the virus, made the zero goal difficult or impossible to attain. Local governments doubled down on the goal and used even more draconian measures, which led to disastrous outcomes.
Many people found the lockdown in Shanghai particularly traumatic, partly because it affected the relatively wealthy classes in China’s financial hub. Has this period changed the city and its citizens?
Shanghai’s dramatic lockdown impacted the middle- to upper-middle class residents and younger generations. The urban middle-class residents used to be fairly content with their material life conditions despite their complaints about the state. It was like a deal between the state and them that they refrained from publicly challenging the state and sometimes even formed a complicit relationship with the state in exchange for stability and wealth.
And it was the first time this deal suffered serious damage?
The pandemic made them aware that their wealth and even basic rights might be endangered if the state was determined to take them away. In the past two years, there has been a trend of wealthy middle-class and even super-rich people attempting to migrate or move their assets outside of China, sometimes illegally. The younger generations became disillusioned about the party-state and had already demonstrated their defiance. That being said, I want to emphasize the internal diversity in China, even in places like Shanghai: Many others did not think that way, let alone take action to change their life trajectories.
Did the pandemic also have positive impacts on China? For example, a stronger will to act responsibly or higher political consciousness and will to act together as a civil society?
I don’t foresee any positive outcome except for many young people’s self-awakening in the white paper protests. Such a change in consciousness may or may not lead to immediate actions because, in the past decade, China’s civil society has been suffocating under tightened control. But in the long run, such changes in consciousness will have impacts on action. The questions are just when and how.
Would the Chinese government react differently if another pandemic were to hit now? Have precautionary measures and disaster management been improved?
This is hard to predict. History tells us that the Chinese state learns some lessons but not others. For example, the COVID pandemic happened in exactly the same way as the SARS crisis: a virus emerged but was covered up or downplayed by various fragments in the state until it evolved into a crisis, which the state attempted to solve through an all-out campaign.
Is the similarity because there has been no structural change in China since SARS?
The reason for this similarity is the fragmented nature of the state, which often leads to slow actions and conflicts among different sectors. Moreover, the state has to maintain the “strong state” image, and then local officials tend to conceal negative information in order not to damage the image. The civil society is not strong enough to reveal the truth. All these structural conditions are still there and will last in the future, but whether the pandemic will repeat itself depends on the feature of the natural agent (for example, whether the virus is as severe as COVID or SARS) and the specific agencies’ conscious actions. After the SARS, there were some improvements in China’s disaster management system, but we saw a bigger failure in the pandemic that happened in the same way in the very beginning.
Bin Xu, born in Hangzhou in 1974, is Associate Professor of Sociology in the Department of Sociology at Emory University, Atlanta. His work on the cultural sociology of disasters has received honors and grants from the American Sociological Association (ASA), the National Science Foundation (NSF) and the American Council of Learned Societies (ACLS). Xu is currently a fellow at the Berlin Institute for Advanced Study, researching the culture of remembrance of the Tiananmen massacre.
In March, Chinese Premier Li Qiang announced an ambitious economic growth target of 5 percent for 2024. In a subsequent commentary, former World Bank chief economist Justin Yifu Linendorsed the government’s target, predicting that China’s economy will grow at an average annual rate of 5-6 percent over the coming decade before slowing to 3-4 percent between 2036 and 2050. Lin also suggested that China could achieve high-income status in 2026, if not 2025. Given China’s bleak demographic outlook, this seems highly unlikely.
Lin notes that 26 countries had less than half of the United States’ GDP per capita when their populations began to age. He argues that since these countries continued to improve their economies after this point, China can, too.
The WHO defines the start of an economy’s aging phase as the point where the share of those aged 65 and older exceeds 7 percent – a demographic milestone China reached in 1998. By 2023, the share of Chinese people over 65 increased to 15.4 percent. Historically, no country has managed to achieve 4 percent growth in the subsequent 12 years after the elderly made up 15 percent of the population. The average growth rate for high-income countries during this period is just 1.8 percent.
An aging population affects production, consumption, entrepreneurship, and innovation, eroding economic dynamism. As the median age and the share of people aged 65 and older increase, GDP growth slows. Consequently, Lin’s prediction that China will achieve an annual growth rate of 5-6 percent between 2024 and 2035 is as improbable as an 80-year-old winning a marathon.
Lin emphasizes China’s latecomer advantage, but this is offset by its rapidly aging population. Demographic problems and shrinking labor forces have caused GDP per capita in Spain, Greece, and Portugal, respectively, to fall from 73, 66, and 51 percent of the US level in 2008 to 39, 27, and 32 percent. Along with other aging societies such as South Korea and Taiwan, these countries are now at risk of falling back into the middle-income trap.
China’s aging crisis is reminiscent of what happened in Japan and Germany, whose labor forces began to shrink in the mid-1990s. By 2023, Japan and Germany’s GDP per capita had fallen to 41 percent and 64 percent of the US level, respectively, from 154 percent and 110 percent in 1995.
Similarly, China’s median age in 2023 was the same as Japan’s in 1995 and Germany’s in 2000, while the share of people aged 65 and older matched Japan’s in 1996 and Germany’s in 1995. Over the 12 years that followed these demographic milestones, Japan’s average annual growth rate was 0.8 percent, and Germany’s was 1.4-1.5 percent. Based on these historical trends, China’s growth rate is likely to slow to 3 percent by 2028 and fall below that of the US from 2031 to 2035.
China’s GDP per capita reached 12,681 US dollars in 2023, falling short of the World Bank’s high-income threshold of 13,845 US dollars. With an average annual increase of 2.1 percent over the past two decades, the threshold is projected to rise to 15,715 US dollars by 2028 and 18,219 US dollars by 2035. Assuming that China’s per capita GDP growth slows from 5 percent in 2024 to 3 percent in 2028 and 1.5 percent in 2035, its GDP per capita is expected to reach 17,893 US dollars over the next decade. The widening economic gap between China and the US will further impede China’s ability to cross the high-income threshold.
Moreover, several factors are expected to put downward pressure on the renminbi, complicating China’s efforts to escape the middle-income trap. First, China’s labor force is shrinking rapidly, and its industrial value chain is shifting to countries participating in the government’s Belt and Road Initiative. Western countries’ attempts to reduce their dependency on Chinese supply chains could further weaken China’s manufacturing sector, eroding the country’s trade surplus. Second, as economic growth slows and local governments grapple with an escalating debt crisis, Chinese interest rates are expected to fall.
Lastly, low fertility rates around the world could lead to low inflation and even outright deflation. China’s persistent low fertility rate, combined with insufficient domestic demand and excess capacity, is likely to intensify deflationary pressures, widening the interest-rate gap between the renminbi and the US dollar.
To be sure, if the high-income threshold were to remain unchanged, China might manage to reach it. But its aging population would likely prevent it from escaping the real middle-income trap. The country’s household disposable income accounts for only 42 percent of its GDP, well below the global average of 60-70 percent. The 2022 high-income threshold translates to per capita disposable income of 8,307-9,692 US dollars, typically indicative of a large middle class capable of exerting pressure on the government.
By contrast, China’s per capita disposable income was just 5,565 in 2023, and its middle class remains a minority. To cross the high-income threshold, China would need to boost its GDP per capita to 19,000-22,000 US dollars. But achieving this requires far-reaching reforms.
Above all, China must raise household disposable incomes and tackle its demographic crisis, both of which require a political and economic overhaul. Given that China today is even more averse to economic reforms than it was when Deng Xiaoping launched his market-oriented reforms in 1978, rapid change is highly unlikely. The required transformation may take several decades, if not longer.
Yi Fuxian, a senior scientist in obstetrics and gynecology at the University of Wisconsin-Madison, is the author of Big Country with an Empty Nest (China Development Press, 2013).
© Project Syndicate 1995-2024
Students in the city of Zhangye in Gansu province celebrate their 18th birthday. This isn’t actually a traditional holiday in China. But because the communist leadership abolished so many traditional holidays in the past decades, people simply created new ones. And one of them is the day on which students celebrate the day they turn 18 together, often with gifts.
China’s role in the war in Ukraine once again dominated debates. At the Shangri La Security Forum in Singapore on Sunday, Ukrainian President Volodymyr Zelenskiy criticized China’s handling of the attack against his country in an unusually open manner. Among other things, he accused Beijing of undermining a planned peace conference in Switzerland on Russia’s behalf. He said that Moscow was using Chinese diplomats to dissuade other countries from attending the conference in mid-June.
These harsh words show Zelenskiy’s frustration, who has repeatedly attempted to reach out to China since Russia’s invasion – and apparently no longer has much hope of a constructive stance from Beijing. Zelenskiy also pointed to the deliveries of weapons-grade goods from Chinese companies to Russia.
These accusations were the focus of US Deputy Secretary of the Treasury Wally Adeyemo’s visit to Berlin. Adeyemo announced that the US would soon take action against exports of military goods from China to Russia. He urged Europe and Germany to back up their words with action, as Michael Radunski reports.
The Covid pandemic seems almost forgotten in comparison. However, it has had serious consequences in China. Fabian Peltsch spoke with sociologist Bin Xu about how China’s strict zero Covid policy has affected the middle class in particular – and why the government refuses to reappraise the pandemic years.
Ukrainian President Volodymyr Zelenskiy has accused China of “working hard” to prevent countries from attending the Ukraine peace conference in Switzerland in mid-June. According to the AP news agency, Zelenskiy told reporters at Sunday’s Shangri-La Dialogue in Singapore that Beijing was helping the Kremlin to undermine the top-level meeting in Switzerland. “Russia, using Chinese influence on the region, using Chinese diplomats, does everything to disrupt the peace summit.” He said it was regrettable that “such a big, independent, powerful country as China is an instrument in [the] hands of [Russian President Vladimir] Putin.”
It is an unusual tone that shows Zelenskiy’s frustration with Beijing. Since the Russian invasion, his government has repeatedly attempted to reach out to China behind the scenes, but this has been in vain. He once spoke to President Xi Jinping on the phone during the war. “He promised me China would stand aside, would not support Russia with weapons,” Zelenskiy said, according to the US news platform Politico. “Today, there is intelligence that somehow, some way, some things come to Russia’s markets via China … elements of Russia’s weaponry come from China.” This also includes parts for the construction of weapons. Zelenskiy said that he had not met with any members of the Chinese delegation.
The Shangri-La Dialogue is the most important security conference in Asia. At the conference, China’s Defense Minister Dong Jun also met bilaterally with US Defense Secretary Lloyd Austin. This is a step forward, as Dong’s predecessor, Li Shangfu, had rejected such a meeting in 2023. Austin emphasized the importance of remaining in dialogue. “Every conversation is not going to be a happy conversation, but it is important that we continue to talk to each other,” Austin said in his speech on Saturday. He emphasized that despite obvious disagreements, he saw no immediate danger of escalation.
Nevertheless, the simmering conflict between the United States and China overshadowed the conference. Austin spoke of a “new convergence around nearly all aspects of security” in the Indo-Pacific and praised the growing cooperation with regional allies. According to Bloomberg, the Chinese delegation, in turn, showed an unusually strong public presence in Singapore through a series of press conferences, speeches and interjections. Chinese representatives criticized US support for Taiwan, warned against the establishment of an Asian NATO and accused Washington of a “technology blockade” against Beijing.
“They keep testing China’s red lines,” said Dong in his speech, describing the USA’s Taiwan policy as a “salami slicing strategy” with which they are constantly expanding the boundaries of support. Conversely, the West accuses China of salami-slicing in the South China Sea, for example, by creating artificial islands.
Amid this heated atmosphere, Zelenskiy expressed his “disappointment” in his speech that some heads of state and government had not yet confirmed their participation in the peace summit planned for his country in Switzerland in mid-June – including US President Joe Biden.
Although over 100 countries have confirmed their participation, it depends on who will attend. German Chancellor Olaf Scholz will be there, as will EU Commission President Ursula von der Leyen. In his speech, Zelenskiy appealed for as many Asian countries as possible to attend.
The fact that the Ukrainian president came to Singapore despite the difficult situation on the front shows how vital the support of as many countries worldwide as possible is to him. However, according to reports, China will only participate in a peace conference if Russia is invited. “China always maintains that the international peace conference needs to meet the three important elements of recognition from both Russia and Ukraine, equal participation of all parties, and fair discussion of all peace plans,” Foreign Ministry spokeswoman Mao Ning said on Friday.
Security expert and former US ambassador to NATO Kurt Volker believes China might send someone from the working level to Switzerland. “That would at least be a small success for Ukraine.” And the presence of a high-ranking politician from Beijing would be a major success, Volker told Table.Briefings. In general, the West must convince China that it is in its own interest to act constructively, says Volker. There are some approaches. For example, China wants to be involved in rebuilding Ukraine after the war. “China is only looking out for Chinese interests,” Volker said, adding that Beijing would always help Russia if it benefited China.
Dong Jun was not present during Zelenskiy’s speech. Although he mentioned the peace conference in his speech, he emphasized China’s commitment to peace talks with “a responsible attitude.” Dong also stressed that his country had never supplied weapons to either side in the conflict. He did not comment on the accusations that Chinese dual-use products had found their way to Russia.
Wally Adeyemo chose friendly words in Berlin, but his message is a severe warning to China: “We must make the choice stark for China: Chinese firms can either do business in our economies or they can equip Russia’s war machine with dual-use goods.” And the US Deputy Secretary of the Treasury immediately followed up by giving Beijing a little help in deciding: “They cannot do both.”
Adeyemo traveled to Ukraine last week specifically to gain a first-hand overview of the situation. On his way back to the US, he stopped in Berlin and gave a firm speech in the German capital. The reason: The USA wants to increase the pressure, preferably together with its European partners. Adeyemo announced that Washington would take action in the coming weeks.
Although the Deputy Secretary did not go into details, he said he coordinated closely with the German government. Adeyemo’s message is clear. The US must do two things: Strengthen Ukraine’s troops and cut off supplies to the Russian fighters.
For the first part, Western countries have now permitted Ukraine to direct their weapons at Russian territory. After the US, Germany also gave Ukraine the green light on Friday to use supplied weapons against targets in the Russian border area with the Kharkiv region. Now, action must also be taken on the second part, Adeyemo said: halting supplies for Russia’s war machine. And the United States is certain that China has a pivotal role to play here.
He said no other country has the necessary capacities, such as processing machines, microelectronics, and other products Russia needs for weapons production. But without China, Russia would not be able to continue its weapons production, let alone the war against Ukraine on this scale.
Adeyemo spoke frankly in Berlin. Last year, Russia imported sensitive dual-use goods worth 5.2 billion US dollars from Chinese manufacturers. That is an increase of over 40 percent – in just one year. “The Kremlin knows it can only meet its military goals with China’s assistance.”
A few weeks ago, US officials identified several Chinese companies as responsible for these exports. Among them:
“These supplies really help Russia rebuild and improve its war machine to destroy Ukraine,” Alexander Gabuev told Table.Briefings. The director of the Carnegie Russia Eurasia Centre says: “This is not normal trade for civilian purposes, like buying Russian oil, which is grudgingly tolerated. This is support that is crucial to the military.” China has so far vehemently denied providing direct military aid to Russia. However, there is increasing evidence of Chinese involvement on the battlefields in Ukraine.
Adeyemo made it clear in Berlin that now is the time for action, not just words. “If China does not put a stop to the trade of dual-use goods to Russia, we will have to take action to hold them accountable.” In Berlin, the US Deputy Secretary of the Treasury made it very clear who he meant: The EU is China’s largest export market, and China is still the largest exporter to the EU in key sectors such as chemicals and machinery.
“We recognize the EU’s economic relationship with China is mutually significant, and we must make the choice stark for China.” But: “We must make clear to Chinese companies that we are all prepared to use our sanctions and export controls to hold them accountable.” Adeyemo emphasized the word “all.” Following the trilateral summit with French President Emmanuel Macron and Chinese President Xi Jinping in May, the EU Commission President also underlined that China must make more efforts to restrict the supply of dual-use goods to Russia. Macron explained that Xi had promised him that he would monitor these deliveries more closely. Whether this will be followed by action is uncertain.
Meanwhile, Adeyemo’s determined stance in Berlin matches the events of recent weeks. Most recently, US Deputy Secretary of State Kurt Campbell accused China’s leadership of supporting Russia’s war in Ukraine. Campbell also warned that Beijing must reckon with further sanctions as a result.
Shortly before Adeyemo left for the Berlin airport, he had some friendly words. Under President Joe Biden’s administration, he had never visited a country as often as Germany. This could be interpreted as an expression of closeness and friendship. However, it could also be a sign of how difficult it is to get their German partner to agree on a common line regarding China.
Beijing abruptly abandoned its “zero COVID” policy at the end of 2022. Many in the West perceived this step as surprising and contradictory. Was the government more successful within China in communicating the logic of suddenly abandoning the draconian policies?
No. The government did not give any clear explanations for the abrupt policy change. Rather, since December 2022, the “zero COVID” policy (清零政策), once a sacred concept, has been systematically removed from official representations.
What is the situation today – what narrative does the Party want to go down in history books, when it comes to the pandemic? Are there still media reports and exhibitions celebrating China’s heroic acts?
In general, there are very few official narratives of the COVID response. The only existing exhibit, to the best of my knowledge, is the one in the Wuhan Archives, which expectedly focuses on the state and the people’s heroic effort to combat the virus.
Isn’t that a contradiction to the aforementioned open departure?
The subtlety here is that the official narratives mostly highlight the perceived success in Wuhan but are silent about the 2022 outbreak, let alone the massive infection and deaths after the end of the policy. Even the self-complimentary narratives are very few because any mention of the pandemic response would lead to people’s natural tendency to recall the tragedies in 2022. The state seemed to decide not to talk about the pandemic.
You mention in your research that the Chinese state pursued “performative intentions” in the fight against the pandemic. Can you elaborate on what those intentions are and what they were aiming for?
The Chinese state clearly wanted to demonstrate its strong state image, that is, an image of a competent state that is able to manage large crises successfully, eliminate social problems, and even control natural forces. Such a strong state image is best presented in the number “zero” – a perfect way to show that the state can eliminate – rather than alleviate – problems. This elimination goal could also be found in many other public policies, such as the poverty program that aimed at eliminating absolute poverty by the end of 2020 – an ambitious goal with a clear deadline.
Beijing considered the fight against the pandemic a kind of global competition between nations.
The strong state image also means China has so-called “institutional advantages” in the competition for global leadership. During the pandemic, the competition meant a competition of numbers – cases of infection and deaths. Thus, there were quite a lot of political stakes in the number “zero,” and the state tried everything to maintain the strong image even if the reality, especially the evolution of the virus, made the zero goal difficult or impossible to attain. Local governments doubled down on the goal and used even more draconian measures, which led to disastrous outcomes.
Many people found the lockdown in Shanghai particularly traumatic, partly because it affected the relatively wealthy classes in China’s financial hub. Has this period changed the city and its citizens?
Shanghai’s dramatic lockdown impacted the middle- to upper-middle class residents and younger generations. The urban middle-class residents used to be fairly content with their material life conditions despite their complaints about the state. It was like a deal between the state and them that they refrained from publicly challenging the state and sometimes even formed a complicit relationship with the state in exchange for stability and wealth.
And it was the first time this deal suffered serious damage?
The pandemic made them aware that their wealth and even basic rights might be endangered if the state was determined to take them away. In the past two years, there has been a trend of wealthy middle-class and even super-rich people attempting to migrate or move their assets outside of China, sometimes illegally. The younger generations became disillusioned about the party-state and had already demonstrated their defiance. That being said, I want to emphasize the internal diversity in China, even in places like Shanghai: Many others did not think that way, let alone take action to change their life trajectories.
Did the pandemic also have positive impacts on China? For example, a stronger will to act responsibly or higher political consciousness and will to act together as a civil society?
I don’t foresee any positive outcome except for many young people’s self-awakening in the white paper protests. Such a change in consciousness may or may not lead to immediate actions because, in the past decade, China’s civil society has been suffocating under tightened control. But in the long run, such changes in consciousness will have impacts on action. The questions are just when and how.
Would the Chinese government react differently if another pandemic were to hit now? Have precautionary measures and disaster management been improved?
This is hard to predict. History tells us that the Chinese state learns some lessons but not others. For example, the COVID pandemic happened in exactly the same way as the SARS crisis: a virus emerged but was covered up or downplayed by various fragments in the state until it evolved into a crisis, which the state attempted to solve through an all-out campaign.
Is the similarity because there has been no structural change in China since SARS?
The reason for this similarity is the fragmented nature of the state, which often leads to slow actions and conflicts among different sectors. Moreover, the state has to maintain the “strong state” image, and then local officials tend to conceal negative information in order not to damage the image. The civil society is not strong enough to reveal the truth. All these structural conditions are still there and will last in the future, but whether the pandemic will repeat itself depends on the feature of the natural agent (for example, whether the virus is as severe as COVID or SARS) and the specific agencies’ conscious actions. After the SARS, there were some improvements in China’s disaster management system, but we saw a bigger failure in the pandemic that happened in the same way in the very beginning.
Bin Xu, born in Hangzhou in 1974, is Associate Professor of Sociology in the Department of Sociology at Emory University, Atlanta. His work on the cultural sociology of disasters has received honors and grants from the American Sociological Association (ASA), the National Science Foundation (NSF) and the American Council of Learned Societies (ACLS). Xu is currently a fellow at the Berlin Institute for Advanced Study, researching the culture of remembrance of the Tiananmen massacre.
In March, Chinese Premier Li Qiang announced an ambitious economic growth target of 5 percent for 2024. In a subsequent commentary, former World Bank chief economist Justin Yifu Linendorsed the government’s target, predicting that China’s economy will grow at an average annual rate of 5-6 percent over the coming decade before slowing to 3-4 percent between 2036 and 2050. Lin also suggested that China could achieve high-income status in 2026, if not 2025. Given China’s bleak demographic outlook, this seems highly unlikely.
Lin notes that 26 countries had less than half of the United States’ GDP per capita when their populations began to age. He argues that since these countries continued to improve their economies after this point, China can, too.
The WHO defines the start of an economy’s aging phase as the point where the share of those aged 65 and older exceeds 7 percent – a demographic milestone China reached in 1998. By 2023, the share of Chinese people over 65 increased to 15.4 percent. Historically, no country has managed to achieve 4 percent growth in the subsequent 12 years after the elderly made up 15 percent of the population. The average growth rate for high-income countries during this period is just 1.8 percent.
An aging population affects production, consumption, entrepreneurship, and innovation, eroding economic dynamism. As the median age and the share of people aged 65 and older increase, GDP growth slows. Consequently, Lin’s prediction that China will achieve an annual growth rate of 5-6 percent between 2024 and 2035 is as improbable as an 80-year-old winning a marathon.
Lin emphasizes China’s latecomer advantage, but this is offset by its rapidly aging population. Demographic problems and shrinking labor forces have caused GDP per capita in Spain, Greece, and Portugal, respectively, to fall from 73, 66, and 51 percent of the US level in 2008 to 39, 27, and 32 percent. Along with other aging societies such as South Korea and Taiwan, these countries are now at risk of falling back into the middle-income trap.
China’s aging crisis is reminiscent of what happened in Japan and Germany, whose labor forces began to shrink in the mid-1990s. By 2023, Japan and Germany’s GDP per capita had fallen to 41 percent and 64 percent of the US level, respectively, from 154 percent and 110 percent in 1995.
Similarly, China’s median age in 2023 was the same as Japan’s in 1995 and Germany’s in 2000, while the share of people aged 65 and older matched Japan’s in 1996 and Germany’s in 1995. Over the 12 years that followed these demographic milestones, Japan’s average annual growth rate was 0.8 percent, and Germany’s was 1.4-1.5 percent. Based on these historical trends, China’s growth rate is likely to slow to 3 percent by 2028 and fall below that of the US from 2031 to 2035.
China’s GDP per capita reached 12,681 US dollars in 2023, falling short of the World Bank’s high-income threshold of 13,845 US dollars. With an average annual increase of 2.1 percent over the past two decades, the threshold is projected to rise to 15,715 US dollars by 2028 and 18,219 US dollars by 2035. Assuming that China’s per capita GDP growth slows from 5 percent in 2024 to 3 percent in 2028 and 1.5 percent in 2035, its GDP per capita is expected to reach 17,893 US dollars over the next decade. The widening economic gap between China and the US will further impede China’s ability to cross the high-income threshold.
Moreover, several factors are expected to put downward pressure on the renminbi, complicating China’s efforts to escape the middle-income trap. First, China’s labor force is shrinking rapidly, and its industrial value chain is shifting to countries participating in the government’s Belt and Road Initiative. Western countries’ attempts to reduce their dependency on Chinese supply chains could further weaken China’s manufacturing sector, eroding the country’s trade surplus. Second, as economic growth slows and local governments grapple with an escalating debt crisis, Chinese interest rates are expected to fall.
Lastly, low fertility rates around the world could lead to low inflation and even outright deflation. China’s persistent low fertility rate, combined with insufficient domestic demand and excess capacity, is likely to intensify deflationary pressures, widening the interest-rate gap between the renminbi and the US dollar.
To be sure, if the high-income threshold were to remain unchanged, China might manage to reach it. But its aging population would likely prevent it from escaping the real middle-income trap. The country’s household disposable income accounts for only 42 percent of its GDP, well below the global average of 60-70 percent. The 2022 high-income threshold translates to per capita disposable income of 8,307-9,692 US dollars, typically indicative of a large middle class capable of exerting pressure on the government.
By contrast, China’s per capita disposable income was just 5,565 in 2023, and its middle class remains a minority. To cross the high-income threshold, China would need to boost its GDP per capita to 19,000-22,000 US dollars. But achieving this requires far-reaching reforms.
Above all, China must raise household disposable incomes and tackle its demographic crisis, both of which require a political and economic overhaul. Given that China today is even more averse to economic reforms than it was when Deng Xiaoping launched his market-oriented reforms in 1978, rapid change is highly unlikely. The required transformation may take several decades, if not longer.
Yi Fuxian, a senior scientist in obstetrics and gynecology at the University of Wisconsin-Madison, is the author of Big Country with an Empty Nest (China Development Press, 2013).
© Project Syndicate 1995-2024
Students in the city of Zhangye in Gansu province celebrate their 18th birthday. This isn’t actually a traditional holiday in China. But because the communist leadership abolished so many traditional holidays in the past decades, people simply created new ones. And one of them is the day on which students celebrate the day they turn 18 together, often with gifts.
