January 17, 2023
Welcome back to Axios China. We start today with a look at how Chinese activists abroad are faring after the end of zero-COVID. We're also looking at Janet Yellen's China challenge, 2022's economic slump, and lots more.
- Happy Lunar New Year! Wishing safe journeys to everyone who is traveling to be with family for the holiday.
Today's newsletter is 2,001 words, a 7½-minute read.
1 big thing: After zero-COVID ends, Chinese activists abroad dig in for long haul
The newfound political fervor that sent protesters to the streets in China over Beijing's zero-COVID policy is helping Chinese activists worldwide grow their bases and forge stronger ties with other pro-democracy protesters, Axios fellow Han Chen and I report.
The big picture: The COVID protests in China last November achieved their primary goal — the end of mass lockdowns, quarantines and daily testing — even though police quashed the demonstrations within days.
- While the end of zero-COVID slowed momentum for Chinese protesters abroad who are calling for democracy in China and the resignation of President Xi Jinping, it also proved protests can influence policy decisions in Beijing.
- "Chinese people have definitely become more politically minded over the last few years, and the COVID-19 pandemic hastened that process," said Miho, 19, a student at the University of California, Irvine.
Background: Late last year, dozens of Chinese cities saw the country's largest political demonstrations in decades, as protesters demanded an end to zero-COVID policies.
- Organizers abroad soon followed suit, with some solidarity rallies openly calling for Xi to step down. One of the largest rallies was held near the Chinese Consulate in New York City, where about 1,000 people gathered on Nov. 29. Many held blank sheets of paper, just like protesters in China.
- Axios spoke with eight overseas organizers across the U.S. and in Canada, including one who coordinated the New York rally. Most of them asked that only their English names be used, fearing retaliation from the Chinese government against them and their families.
What they're saying: "I think it’s a short-term victory for the Chinese people, but it’s not enough," said Wang Han, a 25-year-old student at the University of Southern California who went on a hunger strike outside of Apple's headquarters last month to protest the company's human rights records in China.
- "If you don’t have the right to choose your own destiny, if you do not have the freedom to express disagreement with your government, then another tragedy will happen in the future," he added.
Yes, but: "[F]or a lot of people, their basic interest has been fulfilled by the relieving of the zero-COVID policy," a Chinese activist based in California told Axios, noting this has decreased the momentum among Chinese people abroad who were most incensed by the travel barriers, quarantines and economic damage caused by zero-COVID policies.
- And not everyone wants "democratization," said Jules, a 23-year-old student organizer from northern China who coordinated several solidarity rallies in Chicago late last year.
How it works: Young Chinese organizers overseas have sought support from other vulnerable groups targeted by the Chinese Communist Party, such as Uyghurs, Tibetans and Hong Kongers. They've also contacted longtime dissidents to learn hard lessons about confronting an authoritarian regime.
- Miho, who uses they/them pronouns, said they formed a small group tentatively called "Freedom Solidarity" at UCI last October. They forged an informal alliance with Iranian students critical of their own government's repressive policies and started co-hosting events.
- "Our goal is to fight against ethnic oppression everywhere, but China is a key area of focus," Miho said.
- Jason, 29, a recent graduate who organized the NYC rally, said he's also seeking a global coalition by contacting similar groups in Canada and Europe. On the most recent Human Rights Day, they coordinated many local rallies together, he said.
The intrigue: Organizers who spoke with Axios stressed the importance of keeping some degree of anonymity in public to reduce the risk of being identified and threatened by Chinese government minders abroad.
- "Protecting members' identity is our top priority. We know that some people might be recruited to spy on us, other people might be coerced because their parents were in jeopardy," said Yang Ruohui, president of the Assembly of Citizens, a grassroots organization of Chinese youth in Canada.
- "We limit information collection to a certain extent. We also have specific rules and procedures to shield our identity, such as compartmentalizing and clarifying our organizational structure," Yang explained.
2. China's economic growth in 2022 lowest in decades
China's latest economic data, released today, shows that growth in 2022 slowed to its lowest rate in decades amid pandemic restrictions and a real estate crisis.
Why it matters: Sluggish economic growth has caused widespread anxiety in China, and lower consumption has also reduced demand for imported goods, negatively impacting China's trade partners around the world.
By the numbers: China's economy grew by 3% in 2022, compared to 8.1% in 2021.
- Investment in real estate fell 10%, while retail sales dropped by 0.2%.
The impact: Low growth in China strained middle-income households and hit young workers especially hard, with youth unemployment hitting almost 20% last year.
- Rolling lockdowns also disrupted global supply chains across numerous sectors, including cars, electronics, and commodities like oil and copper.
The good news: The lifting of zero-COVID restrictions means there's lots of optimism for a brighter 2023, per the Wall Street Journal.
- “The reopening itself is equivalent to a big stimulus,” Robin Xing, Morgan Stanley's chief China economist in Hong Kong, told the Journal.
3. Catch up quick
1. China's population declined for the first time in more than 60 years, marking the start of a slow-motion demographic crisis as the population ages. Go deeper.
- India is expected to surpass China and become the world's most populous country sometime this year.
2. Chinese health authorities said nearly 60,000 people have died due to COVID. It's the first time this year China has released COVID death toll numbers. Go deeper.
- These official numbers — which are likely smaller than the actual tally — double China's official COVID death toll since the disease was first discovered there in 2019.
3. The U.S. and Japan began discussions on Japan's plan to develop "counterstrike" capabilities — longer-range missiles like the American-made Tomahawk that could take out launch sites in China or North Korea in the event of war. Go deeper.
- The cooperation highlights the increasingly important U.S.-Japan security alliance, as well as new resolve in Japan to become a military power in Asia.
4. An Indiana University student was stabbed multiple times in the head while riding a bus in what officials are describing as a "racially motivated" attack. Go deeper.
- The person charged with the attack told police she targeted the woman "due to [her] being Chinese." Anti-Asian hate crimes in the U.S. have risen dramatically since the pandemic began.
4. Yellen to meet with China's vice premier on way to Africa
Treasury Secretary Janet Yellen will meet with Chinese Vice Premier Liu He in Davos, Switzerland, on Wednesday to discuss the world economy, a short stop on her way to Africa for some soft diplomacy — and a hard sell on America's commitment to the continent, Axios' Hans Nichols writes.
Why it matters: The first face-to-face meeting between Yellen and a key figure in China's ruling Communist Party is part of the Biden administration’s effort to reset — and stabilize — the U.S. and China relationship, according to a Treasury official.
- The meeting comes amid global economic uncertainty, with the World Bank sharply cutting its forecast for growth and financial markets on notice that the U.S. could default on its debt this spring.
- Yellen last week officially set the clock for the U.S. debt ceiling debate, warning Congress that the United States will be unable to pay its bills if Congress doesn't act by Jan. 19.
What he's saying: In his speech today at the World Economic Forum, Liu sought to assuage concerns about China's economy, particularly the huge but embattled real estate sector.
- Liu said that the government had taken measures to "maintain overall financial stability and prevented systemic risks."
Between the lines: While China holds roughly $910 billion in U.S. debt, second only to Japan in foreign treasury holding, Beijing has been lowering its exposure for the last decade, dipping below $1 trillion in July.
- Yellen will play a crucial role in working with Congress to raise the debt ceiling. Biden and Yellen agreed late last year that she would stay on as secretary of the Treasury.
What we're watching: The Biden administration continues to debate two big China issues that are being closely watched across the world, as well as in Beijing.
- At a National Security Council meeting last month, Yellen argued that the U.S. needs to consult more closely with allies before unveiling a new executive order that would restrict investments in Chinese companies and projects.
- After months of debate, officials still have yet to resolve whether to provide some exceptions on the tariffs imposed by former President Trump, or whether to announce a new trade investigation that would lead to additional sanctions.
Zoom in: In November, Yellen used a trip to a Microsoft facility in New Delhi to outline a vision for the U.S.-India relationship that included explicit talk of moving supply chains away from China.
- In July, she delivered stern words for Beijing from Seoul, South Korea.
- "We cannot allow countries like China to use their market position in key raw materials, technologies, or products to disrupt our economy or exercise unwanted geopolitical leverage," she said.
5. What I'm reading
Another one bites the dust: The last of the reformers? (The Wire China)
- "In the West, where Wang [Qishan] is revered for his candor and competence in pushing market reforms, concern over his political standing has been slowly building. Multiple people in his orbit have been imprisoned or investigated in recent years, suggesting to some observers that Xi Jinping might be tightening the noose around him."
- Wang "earned a reputation as the best China has to offer: a powerful advocate of market reforms and foreign investment ... the current perception that Wang has been benched is especially distressing for the American business community."
6. Axios celebrates Lunar New Year
This Sunday marks the first day of the Lunar New Year — in the Chinese zodiac, the Year of the Rabbit. Below, Axios reporters and Axios China readers share some of their favorite lunar new year traditions:
"My parents would put a red envelope with cash under my pillow so I would wake up on the New Year with 压岁钱 — which was always way more than whatever the tooth fairy was giving me."— Axios business reporter Hope King
"This is a special year for us. I am from Hong Kong and moved [to the U.K.] over 13 years ago to marry my English husband. My mother and brother came to the UK under the BNO visa over the past 12 months and in two weeks’ time the Hong Kong family will be celebrating Lunar New Year with all of the English family for the first time ever! I am throwing a big New Year party at mine – home cooked Cantonese food all day."— Axios China reader
"Since I cannot find any cherry blossom trees here, I bought a fake one. I am planning to hang red packets with home-made Lunar New Year cards in them for each family who are coming to the party. They will be picking their red packets from the tree themselves! I’m trying to merge the east with the west."— Axios China reader
"When I lived in Shanghai as a child, my family would tune in to one of the national celebration broadcasts every Lunar New Year. The best part would come during the countdown. My sisters and I would scurry outside and each grab a sparkler, writing our names in the air and watching excitedly as our dad lit the fuse of a firecracker. He’d try to time it just right. And we’d usher in the new year under a glittering shower of light."— Axios breaking news reporter Shawna Chen
"I love singing. When I was growing up, the Lunar New Year not only meant seeing relatives, but also extra fun time at my youngest aunt’s small karaoke bar in my hometown. I remember having the entire place to myself and my aunt shouting 'encore!'"— Axios World fellow Han Chen
"We celebrate New Year by making pineapple tarts (my wife is Singaporean) and are looking to celebrating in person with dear friends from Hong Kong for the first time since 2020!"— Axios China reader Ben Brandt