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At a Communist Party congress starting in Beijing on Oct. 16, Xi Jinping is expected to be named to a third five-year term as the country’s top leader, paving the way for him to consolidate power to an extent not seen in decades.
Under Mr. Xi, China has become the world’s dominant manufacturer of everything from cement to solar panels, as well as the main trading partner and dominant lender for most of the developing world. It has built the world’s largest navy, developed some of the world’s most advanced ballistic missiles and constructed air bases on artificial islands strewn across the South China Sea.
in a tailspin. Its property market, which over the last ten years contributed about a quarter of the country’s economic output, is melting down. Foreign investment has faltered. And widespread lockdowns and mass quarantines, part of China’s zero-tolerance approach to Covid-19, have hurt consumer demand and stalled businesses.
At the same time, Mr. Xi has worked to turn China into a more state-led society that often puts national security and ideology before economic growth. He has cracked down on Chinese companies and limited their executives’ power. Some of China’s best-known entrepreneurs have left the country and others, such as Alibaba co-founder Jack Ma, have largely disappeared from public view.
All of this has hurt China’s economy, which was just 0.4 percent larger from April through June than during the same period last year. The growth was far below the government’s initial target for growth of about 5.5 percent this year. For the first year since the 1990s, China’s economic growth is expected to fall below the rest of Asia’s.
at the start of the last party congress, in 2017, lasted more than three hours. But buried in that jargon are likely to be some important messages. Here’s what finance leaders and corporate executives around the world want to know.
Domestic Ideology: ‘Common Prosperity’
One of Mr. Xi’s favorite economic policy initiatives in recent months has a simple, innocuous-sounding name: “common prosperity.” The big question lies in what it means.
Common prosperity, a longtime goal of the Communist Party, has been defined by Mr. Xi as reining in private capital and narrowing China’s huge disparities in wealth. Regulators and tax investigators cracked down last year on tech giants and wealthy celebrities. Beijing demanded that tycoons give back to society. And Mr. Xi has strongly discouraged speculation in housing, pushing instead for government subsidies for the construction of more rental apartments.
A regulatory crackdown on tech companies and after-school education companies contributed to a wave of layoffs that left one in five young Chinese city dwellers unemployed by August. Lending limits on China’s highly inflated housing sector have triggered a nosedive in the number of fresh construction projects being started and a wave of insolvencies among real estate developers. Many Western hedge funds that bet heavily on the real estate developers’ overseas bond issues incurred considerable losses.
The term “common prosperity” was seldom used by top officialslast spring during those setbacks. But Mr. Xi conspicuously revived it during a tour of northeastern China in mid-August. The Politburo subsequently mentioned common prosperity when it announced on Aug. 30 the starting date and agenda for the party congress.
first put forward in May 2020, is a theory of what he calls “dual circulation.” The concept involves relying primarily on domestic demand and innovation to propel the Chinese economy, while maintaining foreign markets and investors as a backup engine for growth.
Mr. Xi has pushed ahead with lavish subsidies to develop Chinese manufacturers, especially of semiconductors. But the slogan has attracted considerable skepticism from foreign investors in China and from foreign governments. They worry that the policy is a recipe for replacing imports with Chinese-made goods.
China’s imports have indeed stagnated this year while its exports have soared, producing the largest trade surpluses the world has ever seen. Those surpluses, not domestic demand, have sustained China’s economic growth this year.
Chinese officials deny that they are trying to discourage imports, and contend that China remains eager to welcome foreign companies and products. When the Politburo scheduled the party congress for Oct. 16, it did not mention dual circulation, so the term might be left aside. If it goes unmentioned, that could be a conciliatory gesture as foreign investment in China is already weakening, mainly because of the country’s draconian pandemic policies.
Pandemic: ‘Covid Zero’
China’s zero-tolerance approach to Covid-19 has prevented a lot of deaths and long-term infections, but at a high and growing cost to the economy. The question now lies in when Mr. Xi will shift to a less restrictive stance toward controlling the virus.
in Tiananmen Square, on the 100th anniversary of the founding of the Chinese Communist Party, when he reiterated China’s claim to Taiwan, a self-ruled island democracy. President Biden has mentioned four times that the United States is prepared to help Taiwan resist aggression. Each time his aides have walked back his comments somewhat, however, emphasizing that the United States retains a policy of “strategic ambiguity” regarding its support for the island.
Even a vague mention by Mr. Xi at the party congress of a timeline for trying to bring Taiwan under the mainland’s political control could damage financial confidence in both Taiwan and the mainland.
New Leaders
The most important task of the ruling elite at the congress is to confirm the party’s leadership.
Particularly important to business is who in the lineup will become the new premier. The premier leads the cabinet but not the military, which is directly under Mr. Xi. The position oversees the finance ministry, commerce ministry and other government agencies that make many crucial decisions affecting banks, insurers and other businesses. Whoever is chosen will not be announced until a separate session of the National People’s Congress next March, but the day after the congress formally ends, members of the new Politburo Standing Committee — the highest body of political power in China — will walk on a stage in order of rank. The order in which the new leadership team walks may make clear who will become premier next year.
a leading hub of entrepreneurship and foreign investment in China. Neither has given many clues about their economic thinking since taking posts in Beijing. Mr. Wang had more of a reputation for pursuing free-market policies while in Guangdong.
Mr. Hu is seen as having a stronger political base than Mr. Wang because he is still young enough, 59, to be a potential successor to Mr. Xi. That political strength could give him the clout to push back a little against Mr. Xi’s recent tendency to lean in favor of greater government and Communist Party control of the private sector.
Precisely because Mr. Hu is young enough to be a possible successor, however, many businesspeople and experts think Mr. Xi is more likely to choose Mr. Wang or a dark horse candidate who poses no potential political threat to him.
In any case, the power of the premier has diminished as Mr. Xi has created a series of Communist Party commissions to draft policies for ministries, including a commission that dictates many financial policies.
What do you think? Let us know: dealbook@nytimes.com.
Chinese artists have staged performances to highlight the ubiquity of surveillance cameras. Privacy activists have filed lawsuits against the collection of facial recognition data. Ordinary citizens and establishment intellectuals alike have pushed back against the abuse of Covid tracking apps by the authorities to curb protests. Internet users have shared tips on how to evade digital monitoring.
As China builds up its vast surveillance and security apparatus, it is running up against growing public unease about the lack of safeguards to prevent the theft or misuse of personal data. The ruling Communist Party is keenly aware of the cost to its credibility of any major security lapses: Last week, it moved systematically to squelch news about what was probably the largest known breach of a Chinese government computer system, involving the personal information of as many as one billion citizens.
The breach dealt a blow to Beijing, exposing the risks of its expansive efforts to vacuum up enormous amounts of digital and biological information on the daily activities and social connections of its people from social media posts, biometric data, phone records and surveillance videos. The government says these efforts are necessary for public safety: to limit the spread of Covid, for instance, or to catch criminals. But its failure to protect the data exposes citizens to problems like fraud and extortion, and threatens to erode people’s willingness to comply with surveillance.
for mishandling data. But the authorities rarely point fingers at the country’s other top collector of personal information: the government itself.
Security researchers say the leaked database, apparently used by the police in Shanghai, had been left online and unsecured for months. It was exposed after an anonymous user posted in an online forum offering to sell the vast trove of data for 10 Bitcoin, or about $200,000. The New York Times confirmed parts of a sample of the database released by the anonymous user, who posted under the name ChinaDan.
In addition to basic information like names, addresses and ID numbers, the sample featured details that appeared to be drawn from external databases, like instructions for couriers on where to drop off deliveries, raising questions about how much information private companies share with the authorities. Of particular concern for many, it also contained intensely personal information, such as police reports that included the names of people accused of rape and domestic violence, as well as private information about political dissidents.
leaked databases used by the police in China that were left online with little to no protection; some contained facial recognition records and ID scans of people in a Muslim ethnic minority region.
Now, there are signs that people are growing wary of the government and public institutions, too, as they see how their own data is being used against them. Last month, a nationwide outcry erupted over the apparent abuse of Covid-19 tracking technology by local authorities.
The Latest on China: Key Things to Know
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China’s economy stumbles. Hurt by lockdowns imposed to curb the spread of Covid, China’s economic engine has shuddered in recent months, as housing sales sagged, shops and restaurants shuttered and youth unemployment climbed. The slowdown has kindled doubts about the viability of the country’s stringent strategy of eliminating virtually all Covid-19 infections.
A financial scandal. Depositors from across the country descended on the city of Zhengzhou for a rare mass demonstration after the money they placed in rural banks using online, third-party platforms was frozen as investigators examined allegations of widespread fraud. The authorities responded with violence.
Forced labor. Mining companies in China’s western Xinjiang region are assuming a larger role in the supply chain behind the batteries that power electric vehicles and store renewable energy. But their ties to forced labor practices could portend trouble for industries that depend on materials from China.
Protesters fighting to recover their savings from four rural banks in the central Chinese city of Zhengzhou found that the mobile apps used to identify and isolate people who might be spreading Covid had turned from green — meaning safe — to red, a designation that would prevent them from moving freely.
“There is no privacy in China,” said Silvia Si, 30, a protester whose health code had turned red. The authorities in Zhengzhou, under pressure to account for the episode, later punished five officials for changing the codes of more than 1,300 customers.
posted on Weibo that he was refusing to wear an electronic bracelet to track his movements while in isolation, saying the device was an “electronic shackle” and an infringement on his privacy. The post was liked around 60,000 times, and users flooded it with responses. Many said the bracelet reminded them of the treatment of criminals; others called it a ploy to surreptitiously collect personal information. The post was later taken down by censors, the blogger said.
researcher on technology policy at Yale Law School and New America. “People are far more trusting overall in how government entities handle their personal information and far more suspicious about the corporate sector.”
Legal analysts said any disciplinary actions resulting from the Shanghai police database breach were unlikely to be publicized. There are few mechanisms in place to hold Chinese government agencies responsible for their own data leaks. For many citizens, that lack of recourse has contributed to a sense of resignation.
Occasionally, though, they notch small victories, as Xu Peilin did when she took on her neighborhood committee last year. She had returned to her apartment building in Beijing one day to find that the compound wanted residents to submit to a facial recognition scanner to enter.
“It was insane,” said Ms. Xu, 37, a project manager at a start-up company. She said it reminded her of one of her favorite television shows, the British science fiction series “Black Mirror.”
Ms. Xu badgered her neighborhood committee by telephone and text message until it relented. For now, Ms. Xu said, she can still enter her compound using her key card, though she believed it was only a matter of time until the facial recognition devices became mandatory again.
“All I can do for now,” she said, “is continue to resist on a small scale.”
“NO ES SUFICIENTE” — It’s not enough. That was the message protest leaders in Ecuador delivered to the country’s president this past week after he said he would lower the price of both regular gas and diesel by 10 cents in response to riotous demonstrations over soaring fuel and food prices.
The fury and fear over energy prices that have exploded in Ecuador are playing out the world over. In the United States, average gasoline prices, which have jumped to $5 per gallon, are burdening consumers and forcing an excruciating political calculus on President Biden ahead of the midterm congressional elections this fall.
But in many places, the leap in fuel costs has been much more dramatic, and the ensuing misery much more acute.
Britain, it costs $125 to fill the tank of an average family-size car. Hungary is prohibiting motorists from buying more than 50 liters of gas a day at most service stations. Last Tuesday, police in Ghana fired tear gas and rubber bullets at demonstrators protesting against the economic hardship caused by gas price increases, inflation and a new tax on electronic payments.
largest exporter of oil and gas to global markets, and the retaliatory sanctions that followed have caused gas and oil prices to gallop with an astounding ferocity. The unfolding calamity comes on top of two years of upheaval caused by the Covid-19 pandemic, off-and-on shutdowns and supply chain snarls.
World Bank revised its economic forecast last month, estimating that global growth will slow even more than expected, to 2.9 percent this year, roughly half of what it was in 2021. The bank’s president, David Malpass, warned that “for many countries, recession will be hard to avoid.”
ratcheting down gas deliveries to several European countries.
Across the continent, countries are preparing blueprints for emergency rationing that involve caps on sales, reduced speed limits and lowered thermostats.
As is usually the case with crises, the poorest and most vulnerable will feel the harshest effects. The International Energy Agency warned last month that higher energy prices have meant an additional 90 million people in Asia and Africa do not have access to electricity.
Expensive energy radiates pain, contributing to high food prices, lowering standards of living and exposing millions to hunger. Steeper transportation costs increase the price of every item that is trucked, shipped or flown — whether it’s a shoe, cellphone, soccer ball or prescription drug.
Understand Inflation and How It Impacts You
“The simultaneous rise in energy and food prices is a double punch in the gut for the poor in practically every country,” said Eswar Prasad, an economist at Cornell University, “and could have devastating consequences in some corners of the world if it persists for an extended period.”
Group of 7 this past week discussed a price cap on exported Russian oil, a move that is intended to ease the burden of painful inflation on consumers and reduce the export revenue that President Vladimir V. Putin is using to wage war.
Price increases are everywhere. In Laos, gas is now more than $7 per gallon, according to GlobalPetrolPrices.com; in New Zealand, it’s more than $8; in Denmark, it’s more than $9; and in Hong Kong, it’s more than $10 for every gallon.
Leaders of three French energy companies have called for an “immediate, collective and massive” effort to reduce the country’s energy consumption, saying that the combination of shortages and spiking prices could threaten “social cohesion” next winter.
increased coal production to avoid power outages during a blistering heat wave in the northern and central parts of the country and a subsequent rise in demand for air conditioning.
Germany, coal plants that were slated for retirement are being refired to divert gas into storage supplies for the winter.
There is little relief in sight. “We will still see high and volatile energy prices in the years to come,” said Fatih Birol, the executive director of the International Energy Agency.
At this point, the only scenario in which fuel prices go down, Mr. Birol said, is a worldwide recession.
Reporting was contributed by José María León Cabrera from Ecuador, Lynsey Chutel from South Africa, Ben Ezeamalu from Nigeria, Jason Gutierrez from the Philippines, Oscar Lopez from Mexico and Ruth Maclean from Senegal.
China’s entrepreneur class is grappling with the worst economic slump in decades as the government’s zero Covid policy has shut down cities and kept would-be customers at home. Yet they can’t seem to agree on how loudly they should complain — or even whether they should at all.
A tech entrepreneur wrote in a big group chat in May that many members were too critical. “What people here do every day is criticizing the government and the system,” she wrote. “I can’t see any entrepreneurship in this.”
A top venture capitalist told his nearly nine million social media followers that as much as everyone had suffered from the pandemic, they should try to stay away from negative news and information.
zero Covid policy, which has put hundreds of millions of people under some kind of lockdowns in the past few months, costing jobs and revenues. He’s saying what many others are whispering in private but fear to say in public.
“The questions we should ask ourselves are,” he wrote in an article that was censored within an hour of posting but shared widely in other formats, “what caused such widespread negative sentiment across the society? Who should be responsible for this? And how can we change it?”
He said the lockdowns in Shanghai and other cities made it clear that wealth and social status meant little to a government determined to pursue its zero Covid policy. “We’re all nobodies who could be sent to the quarantine camps, and our homes could be broken into,” he wrote. “If we still choose to adapt to and put up with this, all of us will face the same destiny: trapped.”
staying out of politics is no longer an option for China’s business leaders. But some of his peers are reluctant, given the potential penalties.
steered away from the market economy and cracked down on some industries. It demonized entrepreneurs and went after some of the most prominent of them. Then when the mild, albeit contagious, Omicron variant of the coronavirus emerged in China this year, the government meddled with free enterprise as it hadn’t in decades.
The lockdowns and restrictions have done so much damage to the economy that Premier Li Keqiang summoned about 100,000 cadres to an emergency meeting in late May. He called the situation “severe” and “urgent,” citing sharp drops in employment, industrial production, electricity consumption and freight traffic.
Many business leaders believe that it will be hard to reverse the damage if the government doesn’t stop the zero Covid policy. Yet they feel that there’s nothing they can do to make Beijing change course.
The chairman of a big internet company told me that with all the pandemic restrictions, he and others were operating as if dancing with shackles on while expecting the sword of a lockdown to strike at any moment. With a big public company to run, he said, it would be too risky to be vocal. He hoped the economists could be more outspoken.
The chairman of a publicly listed conglomerate with many consumer-facing businesses said he had to shut down a few of his companies and let people go as revenues dropped off a cliff. He’s not a Christian, he said, but he has been praying to God every day to help him get through this tough period.
articles that compared the pros and cons of different pandemic policies. Then, in mid-May, his social media Weibo account was suspended.
Jack Ma, the founder of the e-commerce behemoth Alibaba, largely disappeared from public view after he criticized banking regulators in late 2019. The regulators quashed the initial public offering of Ant Group, the tech and financial company controlled by Mr. Ma, and fined Alibaba a record $2.8 billion last year.
Ren Zhiqiang, a retired real estate developer, was sentenced to 18 years in prison on charges of committing graft, taking bribes, misusing public funds and abusing his power. His real crime, his supporters say, was criticizing Mr. Xi’s handling of the coronavirus outbreak in early 2020.
Mr. Zhou, 49, is known as a maverick in Chinese business circles. He founded his first business in stereo systems with his brother in the mid-1990s when he was still in college. In 2010, he started Yongche, one of the first ride-hailing companies.
Unlike most Chinese bosses, he didn’t demand that his employees work overtime, and he didn’t like liquor-filled business meals. He turned down hundreds of millions of dollars in funding and refused to participate in subsidy wars because doing so didn’t make economic sense. He ended up losing out to his more aggressive competitor Didi.
He later wrote a best seller about his failure and became a partner at a venture capital firm in Beijing. In April, he was named chairman of the ride-sharing company Caocao, a subsidiary of auto manufacturing giant Geely Auto Group.
A Chinese citizen with his family in Canada, Mr. Zhou said in an interview that in the past many wealthy Chinese people like him would move their families and some of their assets abroad but work in China because there were more opportunities.
Now, some of the top talent are trying to move their businesses out of the country, too. It doesn’t bode well for China’s future, he said.
“Entrepreneurs have good survivor’s instinct,” he said. “Now they’re forced to look beyond China.” He coined a term — “passive globalization” — based on his discussions with other entrepreneurs. “Many of us are starting to take such actions,” he said.
The prospect depressed him. China used to be the best market in the world: big, vibrant, full of ambitious entrepreneurs and hungry workers, he said, but the senseless and destructive zero Covid policy and the business crackdowns have forced many of them to think twice.
“Even if your company is a so-called giant, we’re all nobodies in front of the bigger force,” he said. “A whiff of wind could crush us.”
All the business leaders I spoke to said they were reluctant to make long-term investment in China and fearful that they and their companies could become the next victim of the government’s iron fist. They’re focusing on their international operations if they have them or seeking opportunities abroad.
Mr. Zhou left for Vancouver, British Columbia, in a hurry in late April when Beijing was locking down many neighborhoods. Then he wrote the article, urging his peers to try to speak up and change their powerless status.
He said he understood the fear and the pressure they faced. “Honestly speaking, I’m scared, too.” But he would probably regret it more if he did nothing. “Our country can’t go on like this,” he said. “We can’t allow it to deteriorate like this.”
In recent years, a few of Mr. Zhou’s articles and social media accounts have been deleted. His outspokenness has caused uneasiness among his friends, he said. Some have told him to shut up because it didn’t change anything and was creating unnecessary risks for himself, his family, his companies and the stakeholders in his businesses.
But Mr. Zhou can’t help himself. He’s worried that China could become more like it was under Mao: impoverished and repressive. His generation of entrepreneurs owes much of their success to China’s reform and opening up policies, he said. They have the responsibilities to initiate change instead of waiting for a free ride.
Maybe they can start by speaking up, even if just a little bit.
“Any change starts with disagreement and disobedience,” he said.
As the rest of the world learns to live with Covid-19, China’s top leader, Xi Jinping, wants his country to keep striving to live without it — no matter the cost.
China won a battle against its first outbreak in Wuhan, Mr. Xi said last week, and “we will certainly be able to win the battle to defend Shanghai,” he added, referring to the epicenter of the current outbreak in China.
summarized it as “zero movement, zero G.D.P.” Multinational companies have grown wary of further investments in the country.
For more than two years, China kept its Covid numbers enviably low by doggedly reacting to signs of an outbreak with testing and snap lockdowns. The success allowed the Communist Party to boast that it had prioritized life over death in the pandemic, unlike Western democracies where deaths from the virus soared.
More transmissible variants like Omicron threaten to dent that success, posing a dilemma for Mr. Xi and the Chinese Communist Party. Harsher lockdowns have been imposed to keep infections from spreading, stifling economic activity and threatening millions of jobs. Chinese citizens have grown restless, pushing back against being forced to stay home or to move into grim, government-run isolation facilities.
politically important year for Mr. Xi, China’s censors have moved quickly to muffle calls for a change in course on Covid-19. The head of the World Health Organization, whose recommendations China once held up as a model, was silenced this week when he called on the country to rethink its strategy.
Photographs and references to Tedros Adhanom Ghebreyesus, the director general of the W.H.O., were promptly scrubbed from the Chinese internet after the statement. The foreign ministry responded by calling Mr. Tedros’s remarks “irresponsible,” and accusing the W.H.O. of not having a “proper understanding of the facts.”
China’s state-controlled media has also glossed over the draconian measures officials have deployed to deal with outbreaks. This week, as some authorities in Shanghai erected new fences around quarantine zones, boarded up more homes and asked residents not to leave their apartments, state media painted a picture of a city slowly returning to normal.
One article described the “hustle and bustle of city life” returning, while another focused on statistics for how many stores had reopened.
has not happened. Several Chinese companies are in the testing phase of a homegrown mRNA option, and China also recently approved for emergency use a Covid-19 antiviral pill made by Pfizer called Paxlovid.
Administering three vaccine shots, using antiviral therapies and offering more effective vaccines could help China find a path out of zero Covid, Mr. Ajelli said.
disappointing winter wheat harvest in June could drive food prices — already high because of the war in Ukraine and bad weather in Asia and the United States — further up, compounding hunger in the world’s poorest countries.
A pause on wealth redistribution. For much of last year, China’s top leader, Xi Jinping, waged a fierce campaign to narrow social inequalities and usher in a new era of “common prosperity.” Now, as the economic outlook is increasingly clouded, the Communist Party is putting its campaign on the back burner.
By one estimate, nearly 400 million people in 45 cities have been under some form of lockdown in China in the past month, accounting for $7.2 trillion in annual gross domestic product. Economists are concerned that the lockdowns will have a major impact on growth; one economist has warned that if lockdown measures remain in place for another month, China could enter into a recession.
European and American multinational companies have said they are discussing ways to shift some of their operations out of China. Big companies that increasingly depend on China’s consumer market for growth are also sounding the alarm. Apple said it could see a $4 billion to $8 billion hit to its sales because of the lockdowns.
struggle to find and keep jobs during lockdowns.
Even as daily virus cases in Shanghai are steadily dropping, authorities have tightened measures in recent days following Mr. Xi’s call last week to double down. Officials also began to force entire residential buildings into government isolation if just one resident tested positive.
The new measures are harsher than those early on in the pandemic and have been met with pockets of unrest, previously rare in China where citizens have mostly supported the country’s pandemic policies.
In one video widely circulated online before it was taken down by censors, an exasperated woman shouts as officials in white hazmat suits smash her door down to take her away to an isolation facility. She protests and asks them to give her evidence that she has tested positive. Eventually she takes her phone to call the police.
“If you called the police,” one of the men replies, “I’d still be the one coming.”
Isabelle Qian contributed reporting, and Claire Fu contributed research.
Mongolia, a country of grassy hills, vast deserts and endless skies, has a population not much bigger than Chicago’s. The small democratic nation is used to living in the shadow of its powerful neighbors, Russia and China.
But during a pandemic, being a small nation sandwiched between two vaccine makers with global ambitions can have advantages.
At a time when most countries are scrambling for coronavirus vaccines, Mongolia now has enough to fully vaccinate its entire adult population, in large part thanks to deals with both China and Russia. Officials are so confident about the nation’s vaccine riches that they are promising citizens a “Covid-free summer.”
Mongolia’s success in procuring the vaccines in the span of a few months is a big victory for a low-income, developing nation. Many poor countries have been waiting in line for shots, hoping for the best. But Mongolia, using its status as a small geopolitical player between Russia and China, was able to snap up doses at a clip similar to that of much wealthier countries.
deep skepticism over their homegrown vaccines.
Mongolia is a buffer between eastern Russia, which is resource rich and mostly unpopulated, and China, which is crowded and hungry for resources. While Russia and China are often aligned on the global stage, they have a history of conflict and are wary of each others’ interests in Mongolia. Those suspicions can be seen in their vaccine diplomacy.
arrived this week. Mongolia’s most recent agreement with China’s Sinopharm Group, which is state-owned, was made days before the company received emergency authorization from the World Health Organization.
Mongolia was late to the global clamber for Covid-19 vaccines. For nearly a year officials boasted that there were no local cases. Then came an outbreak in November. Two months later, political crisis precipitated by the mishandling of the virus led to the sudden resignation of the prime minister. The prospect of continued coronavirus restrictions threatened to throw the country into further political turmoil.
The new prime minister, Oyun-Erdene Luvsannamsrai, pledged to restart the economy, which had suffered from lockdowns and border closures, particularly in the south, where Mongolian truck drivers ferry coal across the border to China’s steel mills. But these plans were complicated by surging cases, with the daily count going from hundreds a day to thousands.
“We were quite desperate,” said Bolormaa Enkhbat, an economic and development policy adviser to Mr. Luvsannamsrai.
Vero Cell vaccine. Soon after, China donated 300,000 doses of its Sinopharm vaccine to Mongolia, citing a “profound traditional friendship” as motivation.
Opening up more of the border between China and Mongolia was also a part of the vaccine discussions, Chinese and Mongolian officials said in Chinese state media. Mongolia needs China to buy its coal — exports to the country make up nearly a quarter of Mongolia’s annual economic growth. The revenues helped to pad Mongolia’s budget by a quarter last year.
After a month of back and forth, the Mongolian government struck a deal in March with Russia’s Gamaleya Research Institute, too, for one million doses of the Sputnik vaccine. Days later, Mongolia finalized an agreement to buy 330,000 additional doses of the Sinopharm vaccine.
Ulaanbaatar, Mongolia’s capital, 97 percent of the adult population has received a first dose and more than half are fully vaccinated, according to government statistics. Across the country, more than three quarters of Mongolians have already received one shot.
China has shut its border and stopped purchasing Mongolian coal.
Mongolians have also expressed a preference for Russia’s Sputnik vaccine. To get the population to take the Sinopharm shot, the government has offered each citizen 50,000 tugriks — about $18 — to get fully vaccinated. The average monthly salary in 2020 was $460.
The terms and pricing of the Sinopharm and Sputnik deals were not made public, and Mongolia’s foreign ministry declined to comment on pricing. Representatives for the Gamaleya Research Institute and Sinopharm did not respond to requests for comment.
While some global health experts have questioned whether Sinopharm will be able to continue to deliver on its commitments overseas, it has delivered all of the doses Mongolia ordered. China has said it can make as many as five billion doses by the end of the year, though officials have warned that the country is struggling to make enough shots for its citizens.
a third booster shot sooner than expected.
China, for its part, may be playing a long game, said Julian Dierkes, an associate professor at the University of British Columbia who specializes in Mongolian politics. Though many Mongolians may still not trust China, the Mongolian government will remember how it made its vaccines available at a critical moment.
“We could coin a phrase here: ‘The opportunity of smallness,’” he said.
BEIJING — China approved on Thursday a drastic overhaul of election rules for Hong Kong that would most likely bar many pro-democracy politicians from competing in elections, cementing Beijing’s grip over the territory.
The National People’s Congress, China’s Communist Party-controlled legislature, voted almost unanimously to give pro-Beijing loyalists more power to choose Hong Kong’s local leader, as well as members of its legislature. The decision builds on a sweeping national security law for Hong Kong, imposed last year after months of protests, that the authorities have used to quash opposition in the former British colony.
Premier Li Keqiang said at his annual news conference that the new legislation was needed to ensure that “patriots” run the territory. But critics contend that the new election system will wipe out the already limited democracy that Hong Kong enjoyed after its return to Chinese sovereignty in 1997.
Here is what we know about the changes.
Beijing will have even more say over who leads Hong Kong.
Until now, Hong Kong’s chief executive has been selected by a 1,200-member Election Committee dominated by Beijing’s allies. This has allowed China to pick leaders it trusts.
But a groundswell of support for the territory’s democracy movement during massive protests in 2019 raised the possibility that the opposition could amass a majority of votes to stymie Beijing’s choice.
Beijing plans to add 300 more spots on the committee, which could allow more seats to go to its allies. The congress also imposed a new rule that would most likely prevent democrats from getting on the Election Committee’s ballot. To be nominated, a candidate will now require at least some support from each of the five main groups on the committee. Beijing will now have the chance to form one group entirely from its loyalists, which would block pro-democracy nominees.
Such moves are likely to deprive democracy supporters of much say when the committee votes early next year to select Hong Kong’s leader. The current chief executive, Carrie Lam, is eligible to run for re-election but has not yet said whether she will do so.
Candidates deemed ‘disloyal’ would be rooted out.
Beijing will also empower the Election Committee to directly appoint some members of Hong Kong’s legislature. To many, this is a regression, as the committee lost the authority to appoint lawmakers several years after Hong Kong returned to Chinese sovereignty from British rule.
“I think overall this is an effective, fast, hard-line kind of reverse democratization package,” said Sonny Lo, a political analyst based in Hong Kong. “The pro-democracy forces, even if they can win all the directly elected seats, they will be destined to be a permanent minority.”
Half the seats in the legislature are currently chosen by direct elections and half by so-called functional constituencies: various professions, business groups and other special interests. Until recently, the democrats had held around two dozen seats, and often used their presenceto protest China’s encroachment on the territory’s autonomy and filibuster some local government measures.
Mrs. Lam, Hong Kong’s chief executive, said the changes would prevent dissenting politicians from disrupting the legislature, known as LegCo.
“We will be able to resolve the problem of the LegCo making everything political in recent years and effectively deal with the reckless moves or internal rift that have torn Hong Kong apart,” she said.
Beijing ordered an expansion of the legislature, to 90 seats from 70. It did not say how many of those seats would be directly appointed by the election committee.
The congress also said the Hong Kong government would establish a separate committee to vet candidates seeking to run for the legislature or chief executive. This process is designed to weed out anyone who might be considered disloyal to Beijing.
It’s ‘a sad move,’ democrats say.
Even before the legislation takes force, the Beijing-backed government in Hong Kong has moved quickly to extinguish the opposition.
Many activists have been detained or arrested on charges tied to the national security law, including Joshua Wong; Martin Lee, known as the “father of democracy” in Hong Kong; and Benny Tai, a law scholar. Their voice has been significantly dimmed.
Pro-democracy activists warned that the election law changes would amount to a death knell for the territory’s limited voting rights.
Lo Kin-hei, the chairman of the Democratic Party and one of the few prominent opposition figures not in custody, called the electoral changes “a sad move for Hong Kong.”
“They should actually make the Legislative Council more responsive to the people’s voice, instead of suppressing the people’s voice, like what their proposal is now,” Mr. Lo said.
“I believe that in the future those legislative councilors will be less and less representative of the Hong Kong people and they will just be some loyalists who can do nothing and who cannot represent the Hong Kong people at all,” he said.
Last month, the authorities charged 47 people — many of them well-known democracy activists — with conspiracy to commit subversion.
Their crime in the eyes of the police was their role in holding a primary election intended to help identify pro-democracy candidates for legislative elections that were originally scheduled for last September. The government postponed those elections for a year, citing the pandemic, and has hinted that a further postponement might be needed while the new election law is drafted and implemented.
Keith Bradsher reported from Beijing, and Chris Buckley from Sydney, Australia. Austin Ramzy contributed reporting from Hong Kong. Liu Yi, Albee Zhang and Claire Fu contributed research.
China is freeing up tens of billions of dollars for its tech industry to borrow. It is cataloging the sectors where the United States or others could cut off access to crucial technologies. And when its leaders released their most important economic plans last week, they laid out their ambitions to become an innovation superpower beholden to none.
Anticipating efforts by the Biden administration to continue to challenge China’s technological rise, the country’s leaders are accelerating plans to go it alone, seeking to address vulnerabilities in the country’s economy that could thwart its ambitions in a wide range of industries, from smartphones to jet engines.
China has made audacious and ambitious plans before — in 2015 — but is falling short of its goals. With more countries becoming wary of China’s behavior and its growing economic might, Beijing’s drive for technological independence has taken on a new urgency. The country’s new five-year plan, made public on Friday, called tech development a matter of national security, not just economic development, a break from the previous plan.
The plan pledged to increase spending on research and development by 7 percent annually, including the public and private sectors. That figure was higher than budget increases for China’s military, which is slated to grow 6.8 percent next year, raising the prospect of an era of looming Cold War-like competition with the United States.
wrote on the eve of the legislative meetings now underway in Beijing.
The road to the “global peaks of technology,” as Mr. Xi has described China’s aspirations, is decidedly uphill. The government had previously set out to spend 2.5 percent of gross domestic product on research and development in the last five years, but actual expenditures failed to reach that target.
domestic chip production met only 15.9 percent of its chip demand in 2020, barely higher than the 15.1 percent share it accounted for in 2014, according to IC Insights, an American semiconductor research firm.
China’s premier, Li Keqiang, last week detailed proposals to accelerate the development of high-end semiconductors, operating systems, computer processors, cloud computing and artificial intelligence.
“I think they’re really worried,” said Rebecca Arcesati, a tech analyst with the Mercator Institute for China Studies in Berlin. “They know that without access to those technologies, they won’t be able to reach their targets.”
The new strategy, to a degree, rebrands the country’s previous Made in China 2025 campaign, which sought to propel it to the lead in a range of cutting-edge technologies. It broadly set out to produce 70 percent of the core components that Chinese manufacturers needed by 2025. The plan scared trade partners and contributed to a punishing trade war with the United States.
“China wants to reduce its dependency on the world — not to reduce its trade and interaction but to ensure that it is not vulnerable to the kind of strategic blackmail against China that it has historically used against others,” said Daniel Russel, a former American diplomat who is now a vice president at the Asia Society Policy Institute.
has in the past used corporate espionage to support economic interests, including in the high-tech fields that the government is now making a priority.
The latest intrusion against business and government agencies used Microsoft email systems and was discovered last weekend. Tentatively linked to Chinese hackers, it is likely to sharpen a divide that could split the tech world.
In recent weeks, Chinese officials have repeatedly emphasized the danger of “choke points” where the United States controls key foundational technologies. At a news conference in Beijing, Xiao Yaqing, who leads the Ministry of Industry and Information Technology, announced a review of 41 sectors for “empty spots” that could cause the tech supply chain to break “during crucial times.”
Beijing is backing this effort with money and rhetoric.
China Development Bank, the country’s policy lender, said last week that it was preparing over $60 billion in loans for more than 1,000 firms key to strategic innovation and had raised $30 billion for a new government-backed microchip investment fund.
Ni Guangnan, wrote recently that the country should create a “Chinese system” that could supplant the combined systems of Intel, Microsoft, Oracle and others that have historically dominated computing. China should also increase the world’s reliance on its telecom infrastructure technology to “form a powerful deterrent” against future embargoes, he added.
The tech supply chain remains hugely complex and resolutely global, and too much meddling in the markets can have unforeseen consequences, experts have warned. Top-down jockeying by the United States and China over microchips has in part triggered a chip shortage that recently hit the auto industry.
said it had extended a contract to provide equipment to China’s largest semiconductor maker, even though Washington put the firm, known as SMIC, on a blacklist last year. The extension did not break any restrictions, but showed how there are limits to the United States’ ability to cut off supplies.
Decisions like that could continue to frustrate President Biden, who has cast China as the country’s most significant foreign policy challenge. China hopes to undercut American efforts to isolate it by entwining itself with major economies, including those politically allied with the United States.
the $1.9 trillion economic stimulus plan.
The phrase echoed one he had made as a candidate only two years before — to dismiss the challenge posed by China. “China’s going to eat our lunch?” he said while stumping in Iowa in 2019. “C’mon, man!”
Chris Buckley contributed reporting. Claire Fu and Lin Qiqing contributed research.
China unveiled a road map for cementing its rise in a post-Covid world as it opened one of its biggest political events of the year on Friday, casting its success against the coronavirus as evidence of the superiority of its top-down leadership while warning of threats at home and abroad.
The tightly scripted political pageant that is the annual meeting of China’s rubber-stamp legislature, the National People’s Congress, is largely ceremonial. But the gathering offers a glimpse into the priorities of China’s leaders and their vision for the future.
The message on Friday was one of optimism about the strength of its economy and the solidarity of its people, and of struggle against an array of challenges: a hostile global environment, demographic crises at home and resistance to its rule of Hong Kong.
announced sweeping new security laws in Hong Kong aimed at quashing months of pro-democracy protests.
On Friday, Beijing moved to choke off any vestiges of that movement by unveiling an overhaul of the territory’s election laws to ensure a system of “patriots governing Hong Kong.” The changes would make it exceedingly difficult for democracy advocates to even run for office.
According to the plan, the Basic Law, Hong Kong’s mini-Constitution, will be amended to change the process of selecting the territory’s chief executive and the legislature. A revamped Election Committee will be given the task of helping to choose the candidates for the legislature.
The changes will amount to a new electoral process with “Hong Kong characteristics,” Wang Chen, a Politburo member who specializes in legal matters, said in a speech. The process will also be more firmly than ever under Beijing’s control.
Hong Kong, a former British colony, was returned to Chinese rule in 1997 on the promise that it would be accorded a high degree of autonomy for 50 years. But “Beijing’s full grip on power in Hong Kong may happen well before 2047,” said Diana Fu, an associate professor of political science at the University of Toronto.
growth of 2.3 percent in 2020, its lowest rate in years, but its stringent measures against the coronavirus allowed it to reopen its economy while competitors like the United States and the European Union remained hobbled.
“Our people worked hard and fought adversity in close solidarity and with the unyielding spirit of the Chinese nation, thus proving themselves true heroes,” Li Keqiang, China’s premier, said in announcing the target. “This is the well of strength that enables us to rise to every challenge and overcome every difficulty.”
The emphasis on triumph in the face of difficulty reflects a recent effort by Xi Jinping, China’s top leader, to strike a balance as he seeks to steer the country through what the ruling Communist Party sees as a time of great risk and opportunity.
As countries continue to grapple with the pandemic, the party has doubled down on the message that China’s political model of strong, centralized leadership is superior to the chaos of liberal democracies.
Strengthening that message will be a major focus for Mr. Xi as he looks ahead to two important political events. In July, the party will celebrate the centenary of its founding. Then, in 2023, Mr. Xi is widely expected to take up a third presidential term, following his push in 2018 to scrap constitutional term limits.
Carl Minzner, a professor of Chinese law and politics at Fordham University in New York. “It’s about raising him up to a position close to that of Mao.”
rivalry over science and technology with the United States and other countries remains at a boil, Beijing is digging deep into its pockets in a bid for victory.
To achieve “innovation-driven development” and “high quality” growth, the government announced that its spending on research and development would increase by more than 7 percent every year over the next five years. Spending on basic research will also increase by 10.6 percent in 2021, it said.
Just over a year after the coronavirus first emerged in the central Chinese city of Wuhan, Beijing also pledged to increase resources to guard against emerging infectious diseases and biosafety risks.
To reduce the country’s dependence on the outside world, the government said it would focus on a number of cutting-edge technologies, including next-generation artificial intelligence, quantum information, neuroscience, semiconductors, genetic research and biotechnology, advanced clinical medicine and health care, and deep-space, deep-sea and polar exploration.
The Communist Party’s latest five-year plan specifically calls for the construction of a “Polar Silk Road,” presumably aimed at helping China better capitalize on new energy sources and faster shipping routes in the Arctic.
aging population and shrinking labor force by announcing pension reforms and gradual changes to the official retirement age, which for four decades has mostly remained at around 60 for men and 55 for women.
Declining birth and marriage rates and rising divorce rates have stirred fears among policymakers about the decline of the traditional family unit, which is seen as crucial for promoting social stability and economic growth.
2016 anti-domestic violence law, improve child care services and eliminate gender discrimination in employment.
Beijing also made clear its intention to push ahead with efforts to assimilate, or “sinicize,” the country’s many ethnic and religious minorities, despite growing global pushback against its crackdown on Uighurs and other Muslim peoples in the western region of Xinjiang.
“Fully implement the party’s basic policy on religious work,” read a draft of the five-year plan. “Continue to pursue the sinicization of China’s religions and actively guide religions so that they can be compatible with socialist society.”
BEIJING — China sent a forceful message on Friday advancing the top leader Xi Jinping’s sweeping agenda for the country’s economic and political ascent while drawing a hard line against challenges to Communist Party rule.
China’s leaders used the opening of the annual legislative assembly, the National People’s Congress, to unveil proposals that would drastically weaken the pro-democratic opposition in Hong Kong. They set a goal of at least 6 percent economic growth for this year along with announcing a robust rise in military spending. And they released a long-term plan that promised to ease China’s dependence on foreign energy, technology and markets.
The volley of actions reflected Mr. Xi’s conviction that momentum is in China’s favor as much of the world struggles with the pandemic and its economic and political aftershocks. After initially failing to contain the coronavirus last year, China imposed strict controls that all but wiped out the virus within its borders. That success has allowed for a relatively quick economic rebound and has bolstered the Chinese Communist Party’s belief that its authoritarian system has worked while the United States’ democratic system has faltered.
In the months leading up to the legislative meeting, Mr. Xi has sought to emphasize confidence in China’s authoritarian path. “The East is rising and the West is declining,” he said at a closed-door meeting last year to discuss China’s next long-term development plan, which wasreleased at the Congress.
Lynette H. Ong, a political scientist at the University of Toronto.
By pushing through new rules for Hong Kong, Mr. Xi is taking aim at a thorn in his party’s side: opposition to Chinese rule that erupted in monthslong demonstrations in 2019.
The proposed election overhaul would effectively lock the beleaguered democratic camp out of election contests in the city. A Politburo member who introduced the draft rules said that they would help root out people who Beijing deemed not loyal to the country.
abandon setting an annual growth target for the first time in many years.China ended up recording growth of 2.3 percent in 2020, much slower than the usual pace of 6 percent or higher in recent years, but by far the best performance of any major economy.
But China’s growth last year was even more unbalanced than usual. The country lost ground on its goal of shifting from its addiction to exports and debt-fueled infrastructure investments, and toward a more sustainable reliance on domestic consumption. As in most countries during the pandemic, travel and leisure spending plummeted in China last year.
Mr. Li warned of risks ahead.
“As the coronavirus continues to spread around the world, instability and uncertainty are mounting on the international landscape, and the global economy continues to face grave challenges,” Mr. Li said as he delivered his annual report on the government’s work.
Mr. Li pledged to cut taxes for the smallest businesses, many of which are tiny shops in towns and villages. He promised to step up efforts to increase consumption but also indicated that infrastructure spending would continue at a very fast pace.
He forecast a slight narrowing of the central government’s budget deficit this year. That is to be achieved through limits on social spending, even as military spending continues to surge by nearly 7 percent a year. His government also released a draft plan for long-term development, setting out goals to transform the country into a technologically advanced and environmentally clean power over the next five years and beyond.
“Although remarkable achievements have been made in China’s economic and social development, we still have quite a way to go and a lot of hard work to do before we can achieve modernization in all respects,” Mr. Li said.
Keith Bradsher reported from Beijing, Chris Buckley from Sydney, Australia, and Vivian Wang from Hong Kong. Austin Ramzy contributed reporting from Hong Kong. Albee Zhang, Claire Fu and Liu Yi contributed research.
