“If the Russia-China statement was supposed to make the world safe for autocracy, it didn’t have a very long shelf-life. The autocrats overplayed their hand,” said George Magnus from Oxford University’s China Centre.

COVID cul-de-sac

Xi faces a parallel reverse over COVID, having manoeuvred his country into a disastrous cul-de-sac. Some 43 cities making up two fifths of Chinese GDP are in some form of lockdown at a time when the rest of the world is returning to normal.

Much of Xilin has been a prison for almost seven weeks. The financial capital Shanghai is in week four, and Beijing is again on a knife-edge. Communist Party cyber-censors are struggling to suppress netizen fury akin to the seditious rumblings two years ago over the treatment of Wuhan whistleblower Dr Li Wenliang.

“The great totalitarian lockdown is failing, but there is no sign that Xi intends to call it off. The loss of face would be too great. I don’t see any path to the exit,” said Roger Garside, a former British diplomat and author of China Coup: the Great Leap to Freedom.

To persist with “dynamic zero-COVID” against Omicron borders on insanity, but President Xi is trapped by his own triumphalism. The state media has gone beyond the point of no return in weaponising China’s low death toll for propaganda purposes, deeming it a dazzling vindication of his leadership.

Nor can he let go. The population has no antibodies beyond the modest protection of its defective vaccines, and Xi refuses to let in Western vaccines. Some 40 per cent of those aged over 60 have not been fully jabbed.

To relax would imply the sort of fatalities seen in Hong Kong, where deaths reached almost 300 a day in March. Multiply that by 200 for China and the figures become vertiginous. Xi is doomed to persist with zero-COVID at least until his coronation - no longer so certain - at the 20th Party Congress in October.

Perpetual nightmare

What looked like a Chinese triumph in mid-2020 has turned into a perpetual nightmare, with ever more malign consequences for the economy.

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Capital Economics says output contracted by 3.2 per cent in March under its proxy measure of GDP. The slump in services matches the Delta shock last year. Long-distance journeys are again nearing the nadir seen two years ago. New housing starts have fallen by a quarter, and sales of construction machinery have fallen by a third.

Under this proxy measure, China’s economic output is scarcely higher today than in late 2019, while the US has leap-frogged ahead. This reversal of fortunes looked unthinkable two years ago when many assumed that the pandemic would bring forward the Chinese sorpasso, the supposedly inevitable moment when China overtakes the US to become the world’s economic master.

China’s leaders drew a dubious conclusion from the COVID travails of the West. They thought it validated the organising principle of the Communist state as such. “It convinced them that their model was better, so they doubled down,” said Mark Williams, Asia chief at Capital Economics.

They launched a Maoist rectification purge of the tech sector and the unruly private companies that generate most of China’s economic growth, presenting these attacks as a form of trust-busting in the tradition of Teddy Roosevelt’s Square Deal. The real purpose was to bring all centres of rival power under Xi’s tight control.

‘On current trends, Beijing is now less likely to pull ahead in comprehensive power by the end of the decade. There is nothing inevitable about China’s rise in the world.’

Lowy Institute

Xi is alert to the danger of a fresh recession. He has ordered a blast of investment in infrastructure, telling the Central Committee that Chinese growth must surpass US growth this year.

Bill Bishop from Sinocism says this has echoes of Chairman Mao’s call to “exceed the UK, catch up America” in 1958, at the onset of the catastrophic Great Leap Forward and the starvation of some 35 million people - catalogued in Yang Jisheng’s harrowing book Tombstone.

The relaxation of debt controls and the return to stimulus as usual may engender another short-term boomlet and a better few months for distressed Chinese equities. But it does nothing to tackle the Leninist-capitalist model of top-down credit control at the root of China’s economic stagnation.

Premier Li Keqiang warned a decade ago that China had already picked the low-hanging fruit of catch-up growth and breakneck industrial expansion. It would remain stuck in the middle income trap if it clung too long to this obsolete development strategy.

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Xi picked up some of his points: chiefly the quest for hi-tech ascendancy. He ignored the deeper political point: that it requires a degree of pluralist free-thinking to compete at the technology frontier, where the air is thinner.

A recent study in China: An International Journal concluded that the growth rate of Chinese total factor productivity - the gold standard measure of true performance - collapsed from 3.1 per cent in the 2000s to 1.1 per cent over 2010-2019. China’s profile no longer resembles those of Japan and the Asian tigers as they broke out of the trap.

It has converged with Western levels of productivity before it is rich. In hindsight, we can see that China suffered the greatest damage from the global financial crisis of 2008, not the US as the Communist leadership supposed.

The window is closing on China’s bid for world mastery. Its workforce is shrinking by 3 million a year. It is running out of time before the ageing crisis hits in the late 2020s. Zero COVID has flattened the economic trajectory so much that China is no longer narrowing the economic gap with the US at all.

“On current trends, Beijing is now less likely to pull ahead in comprehensive power by the end of the decade. There is nothing inevitable about China’s rise in the world,” says Australia’s Lowy Institute.

China has hit an economic and diplomatic dead-end.

It can be the world’s superpower colossus, but not under this model and not in wolf warrior conflict with the West, shackled to Putin. And not as long as Xi has his way.

The Daily Telegraph, London