“I wouldn’t mind seeing China,” Philip Larkin quipped, "if I could come back the same day.” One can only imagine how lukewarm he’d be about visiting this, the most joyless of sporting spectacles, Winter Olympiad XXIV, hosted, or rather policed, by the Chinese in Beijing during the time of COVID. 

For the western hemisphere audience, mostly not watching, not glued to the telly, the games have been bereft of dramatic narratives and the timing is all wrong. Who’s going to stay up past midnight to watch curling? Sport is war minus the shooting — plus the Russians cheating — and we have the prospect of the real thing rather than a metaphor in Ukraine right now, so why bother?

Curling: it’s a pastime but is it a sport?

Competitors hate the rules, the food, the temperatures, enforced isolation and the funereal atmosphere of sites bereft of crowds. The smiles of watching officials are as cold and artificial as the snow. If anyone were enjoying the show you wouldn’t know owing to the ubiquity of masks. Anyone unfortunate enough to fall foul of a COVID test is then treated like a Uighur (or Prince Andrew), shunted out of sight and shipped off to the gulag. 

Spying? There’s an app for that

Thought-police surveil athletes and marshal negative opinions via an app, the downloading of which is as obligatory as it is suicidal. Transgressions, warned the authorities sinisterly, would be ‘subject to certain punishments’.  (Your guess is as good as mine as to whether ‘certain’ serves as adjective or quantifier there.) A policy of zero tolerance applies to COVID and dissent. The British Olympic association felt compelled to provide athletes with burner phones to avoid compromising their security.

All that Xi wants

The Chinese like to insist the games are not politicised but this is the entire point of them: the sportwashing of a regime. If Beijing 2008 intended to announce the entrance of China into the new world order, then Beijing 2022 is designed to legitimise the subjugation of Hong Kong, distract from the treatment of the Uighurs, anaesthetise world opinion before the inevitable annexation of Taiwan and of course, move the conversation on from Wuhan bat soup, carpaccio of pangolin and a global pandemic. 

No one else is watching the Winter Olympics but the Chinese are. As far as the Chinese Communist Party is concerned, there’s no business like snow business. Some 600mn viewers have tuned in for panem et circenses and this is the target demographic because what President Xi is most concerned about is not gold in the women’s half-pipe so much as the Chinese Communist Party congress in November at which he, Xi, very much hopes to be re-appointed general secretary. Each to his own but I’d rather watch the curling.

NOlympics?

What are we doping, Freudian slip, I mean doing there in the first place? This is propaganda, not a festival of sport. Sandwiched in between the World Cups held in Russia in 2018 and Qatar later this year, Beijing 2022 forms one leg of the authoritarian trifecta validating governments that are contemptuous of human rights. I’m all for sports but these accommodations merely validate the impression dictators have: everything can be bought – and sold. 

The Sochi winter Olympiad of 2014 followed hard on the heels of the annexation of Crimea so one can hardly blame autocrats for calculating that an opening ceremony, a troop of dancing schoolchildren and the dissimulation of the Corinthian spirit can offset any kind of sovereign malefaction. Much play was made of the Uighur torchbearer in Beijing and the cynicism of the gesture. What next? Navalny carrying the ROC flag in Paris and lighting the Olympic flame? A Bangladeshi bricklayer leading out the Qatari XI on November 21?

The diplomatic boycott of the Beijing games was a pitifully empty gesture. The number of countries citing human rights violations and refusing to send representatives barely crept into double digits and none refused to send athletes. The top dozen or so multinationals have contracts associated with the games worth around $1bn and the IOC, like the WHO demonstrated in 2020, is clearly beholden to China. The moral high ground remains unoccupied and undervalued real estate.

And for our next trick…

Once the Olympics have been shamelessly traduced to burnish its reputation domestically, the CCP faces significant challenges before its congress this autumn. That jamboree of the apparatchiks, in turn, will pave the way for the ‘complete reunification of our motherland’ (Xi), ‘’the great rejuvenation of the Chinese nation’ (Xi) or ‘the military annexation of Taiwan’ (anyone in Taipei or not on the politburo). 

Xi will be scrutinising the American response to Putin’s putative occupation of Ukraine and taking notes. The warmth of his summit with Putin on February 4 was not just authoritarians of the world uniting but the camaraderie of fellow foreign policy adventurers. The showdown with Taiwan is inevitable and Xi knows Chinese pressure will ultimately prove irresistible. It’s simply a question of how much it costs China and what America exacts by way of revenge.

With friends like these…

Not so clever now?

The primary challenge before that is the coronavirus. Draconian lockdowns were successful in dealing with the pandemic initially and China emerged from the opening wave first among nations. Now though, while the rest of the world has antibodies, China must somehow reopen its economy even though its population doesn’t. The zero-COVID policy is unsustainable. If a scientific research station in Antartica was unable to prevent the spread of COVID, the planet’s most populous nation won’t be able to either. The best approach in 2020 is the worst now. I know 80% of the country is vaccinated and I’m no epidemiologist but that leaves what, 300mn exposed?

The potential for economic disruption from this experiment is immense and investors should remain wary of the Chinese equity market while it proceeds. Not that too many fund managers are gung-ho about Chinese stocks after 2021 anyway. $1.5 trillion of market cap was wiped out last year as the state sought to demonstrate its omnipotence to tech behemoths. The CCP will always prioritise political stability and control over economic expansion.

Bond’s the game

Chinese government bonds, offering real yields close to 2%, a gradually appreciating currency and a loosening bias make a more compelling investment case. Especially when contrasted with the inflationary shock besetting G7 central banks at present, all behind the curve, obliged to hike and laden with unrepayable debt.

Putting terribly unfashionable moral arguments to one side for a moment, China bulls can justifiably point to a long period of relative underperformance versus other emerging markets, increasing efforts by PBOC to stimulate growth and an easing trend in monetary policy. By the end of January, though, MSCI China -2.95% was still lagging MSCI EM -1.88%. Concerns surrounding the property market are perennial. It may be the lunar new year and the zodiac says tiger but it’s a paper tiger.

Size counts

Investors need to understand it’s not necessarily the sector that matters in terms of regulatory vulnerability; it’s the size. The regulatory crackdown is supposed over but totalitarian regimes place supreme value on control over growth and this will be a recurrent theme in the Chinese political economy for years to come. Tech tycoons may perform a National Service of sorts and pay the Xi tax as a form of political insurance but it’s a policy that may not always pay out. 

Easy, tiger.

Confucius reckoned a tyranny was more frightening than a tiger. You have been warned. The Chinese Communist Party: the clue is in the name.