From the unwinding of zero-Covid to economic recovery: What to watch in China in 2023 – CNN

by | Jan 2, 2023 | Financial

Editor’s Note: A version of this story appeared in CNN’s Meanwhile in China newsletter, a three-times-a-week update exploring what you need to know about the country’s rise and how it impacts the world. Sign up here.

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After a tumultuous end to a momentous and challenging year, China heads into 2023 with a great deal of uncertainty – and potentially a glimpse 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 swathes of the country face an unprecedented Covid wave.

But the haphazard reopening also offers a glimmer of hope for many: after three years of stifling 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 the virus.

“We have now entered a new phase of Covid response where tough challenges remain,” Xi said in a nationally televised New Year’s Eve speech. “Everyone is holding on with great fortitude, and the light of hope is right in front of us. Let’s make an extra effort to pull through, as perseverance and solidarity mean victory.”

Xi had previously staked his political legitimacy on zero-Covid. Now, as his costly strategy gets dismantled in an abrupt U-turn following nationwide protests against it, many are left questioning his wisdom. The protests, which in some places saw rare demands for Xi and the Communist Party to “step down,” may have ended, but the overriding sense of frustration has yet to dissipate.

His New Year speech comes as China’s lockdown-battered 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.

Its tightly-sealed borders are gradually opening up, and Chinese tourists are eager to explore the world again, but some countries appear cautious to receive them, imposing new requirements for a negative Covid test before travel. And just how quickly – or keenly – global visitors will return to China is another question.

Xi, who recently reemerged on the world stage after securing a third term in power, has signaled he hopes to mend frayed relations with the West, but his nationalist agenda and “no-limits friendship” with Russia is likely to complicate matters.

As 2023 begins, CNN takes a look at what to watch in China in the year ahead.

Covid spread and the New Year travel rush

The most urgent and daunting task facing China in the new year is how to handle the fallout from its botched exit from zero-Covid, amid an outbreak that 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 surging numbers of patients and deaths.

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