Editor’s note: A version of this story appeared in CNN’s Meanwhile in China newsletter, a three-times-weekly update that explores what you need to know about the country’s progress and how it affects the world. Sign up here.
After a tumultuous end to a significant and challenging year, China enters 2023 with much uncertainty – and potentially a glimmer of light at the end of the pandemic tunnel.
The chaos unleashed by leader Xi Jinping’s abrupt and ill-prepared exit from zero-Covid is spilling over into the new year, as large parts of the country face an unprecedented Covid wave.
But the fortuitous reopening also offers a glimmer of hope for many: after three years of suffocating Covid restrictions and self-imposed global isolation, life in China may finally return to normal as the nation joins the rest of the world in learning to live with virus.
“We have now entered a new phase of the Covid response where tough challenges remain,” Xi said in a nationally televised New Year’s Eve address. “Everyone is going on with great strength, and the light of hope is right in front of us. Let’s make an extra effort to get through, as perseverance and solidarity mean victory.”
Xi had previously staked his political legitimacy on zero Covid. Now, as his costly strategy is dismantled in an abrupt U-turn following nationwide protests against it, many are questioning his wisdom. The protests, which in some places saw rare calls for Xi and the Communist Party to “step down,” may have ended, but the overall sense of frustration has not yet dissipated.
His New Year speech comes as China’s shutdown-stricken economy faces more immediate strain from a spiraling outbreak that has hit factories and businesses, ahead of what is likely to be a long and complicated road to economic recovery.
The tightly sealed borders are gradually opening, and Chinese tourists are eager to explore the world again, but some countries appear wary of receiving them, imposing new requirements for a negative Covid test before they travel. And how quickly – or intensely – global visitors return to China is another question.
Xi, who recently re-emerged on the world stage after securing a third term in power, has signaled that he hopes to mend strained relations with the West, but his nationalist agenda and “friendship without borders” with Russia are likely to complicate matters.
As 2023 begins, CNN takes a look at what you can see in China in the coming year.
The most pressing and daunting task facing China in the new year is how to deal with the fallout from its failed exit from zero-Covid amid an outbreak which threatens to claim hundreds of thousands of lives and undermine the credibility of Xi and his Communist Party.
The sudden lifting of restrictions last month led to an explosion of cases, with little preparation in place to deal with the growing number of patients and deaths.
The country’s fragile elevator system is struggling: fever and cold medicine is hard to come by, hospitals are overwhelmed, doctors and nurses are stretched to the limit, while crematoria struggle to keep up with the influx of bodies.
And experts warn that the worst is yet to come. While some major metropolises such as Beijing may have seen the peak of the outbreak, less developed cities and the vast rural hinterland are still bracing for more infections.
As the travel rush for the Lunar New Year – China’s main family reunification festival – begins this week, hundreds of millions of people are expected to return to their hometowns from the big cities, bringing the virus to the vulnerable landscape where vaccination rates are lower and medical resources even scarcer.
The outlook is bleak. Some studies estimate that the death toll could exceed a million if China fails to roll out booster shots and antiviral drugs quickly enough.
The government has launched a booster campaign for the elderly, but many are still reluctant to take it due to concerns about side effects. Combating vaccination hesitancy will require considerable time and effort, when the country’s medical workforce is already stretched thin.
Beijing’s Covid restrictions have put China out of sync with the rest of the world. Three years of shutdowns and border restrictions have disrupted supply chains, harmed international businesses and harmed trade and investment flows between China and other countries.
As China joins the rest of the world in living with Covid, the implications for the global economy are potentially huge.
Some a pick-up in China’s growth will give an important boost to economies that depend on Chinese demand. There will be more international travel and production. But increasing demand will also drive up the prices of energy and raw materials, putting upward pressure on global inflation.
“In the short term, I think China’s economy is likely to experience chaos rather than progress for one simple reason: China is ill-prepared to deal with Covid,” said Bo Zhuang, senior sovereign analyst at Loomis, Sayles & Company, an investment firm. based in Boston.
Capital Economics analysts expect China’s economy to contract by 0.8% in the first quarter of 2023, before picking up again in the second quarter.
Other experts also expect the economy to recover after March. In a recent research report, HSBC economists forecast a 0.5% contraction in the first quarter but 5% growth for 2023.
Despite all this uncertainty, Chinese citizens are celebrating the partial reopening of the border after the end of the quarantine for international arrivals and resumption of departure.
Although some residents expressed concern online about the rapid loosening of restrictions during the outbreak, many more are eagerly planning trips abroad — travel websites recorded massive spikes in traffic within minutes of the Dec. 26 announcement.
Several Chinese nationals abroad told CNN they had been unable or unwilling to return home in recent years while the long quarantine was still in place. That stretch meant big life moments that were missed and spent apart: confirmations, weddings, births, deaths.
Some countries have offered a warm welcome back, with foreign embassies and tourism departments invitations to Chinese travelers on Chinese social media. But others are more cautious, with many countries imposing new testing requirements for travelers arriving from China and its territories.
Officials from those countries have pointed to the risk of new strains emerging from China’s outbreak – although many health experts have criticized the targeted travel restrictions as scientifically ineffective and alarmist, risking inciting further racism and xenophobia.
As China emerges from its self-imposed isolation, all eyes will be on whether it will be able to repair its reputation and conditions that deteriorated during the pandemic.
China’s ties with the West and many of its neighbors plunged significantly over the origins of the coronavirus, trade, territorial claims, Beijing’s human rights record and its close partnership with Russia despite the devastating war in Ukraine.
The lack of top-level face-to-face diplomacy certainly didn’t help, nor did the freezing of personal exchanges between political advisers, business groups and the wider public.
At the G20 and APEC summits, Xi signaled his willingness to mend relations with the US and its allies in a flurry of bilateral meetings.
The lines of communication are open again and more high-level exchanges are in the pipeline – with US Secretary of State Antony Blinken, French President Emmanuel Macron, Dutch Prime Minister Mark Rutte and newly elected Italian Prime Minister Giorgia Meloni all expected to visit Beijing this year.
But Xi also made clear his ambition to push back on US influence in the region, and there is no illusion that the world’s two superpowers will be able to work out their fundamental differences and put aside their growing rivalry.
In the new year, tensions could again flare over Taiwan, technological containment, as well as China’s support for Russia – something Xi emphasized during a virtual meeting with Russian President Vladimir Putin on December 30.
Both leaders expressed a message of unity, with Xi saying the two countries should “strengthen strategic coordination” and “inject more stability into the world,” according to Chinese state media Xinhua.
China is “ready to work” with Russia to “resist hegemonism and power politics,” and to oppose unilateralism, protectionism and “bullying,” Xi said. Putin, meanwhile, invited Xi to visit Moscow in the spring of 2023.
Beijing has long refused to condemn Russia’s invasion of Ukraine, or even refer to it as such. It has instead condemned Western sanctions and reinforced Kremlin rhetoric blaming the US and NATO for the conflict.
As Russia suffered humiliating military setbacks in Ukraine in recent months, Chinese state media appeared to scale back its pro-Russian rhetoric, while Xi has agreed to oppose the use of nuclear weapons in Ukraine in meetings with Western leaders.
But few experts believe China will distance itself from Russia, and several tell CNN that the two countries’ mutual trust and geopolitical alignment remain strong — including their shared vision for a “new world order.”
“(The war) has been a nuisance for China over the past year and has affected China’s interest in Europe,” said Yun Sun, director of the China program at the Washington-based think tank Stimson Center. “But the damage is not significant enough for China to leave Russia.”