Chinese leader Xi Jinping went from cementing his supremacy last fall to battling a public-health and economic crisis into the new year—fallout from an abrupt pivot from “zero Covid” that could cast a shadow over China for months to come.

Mr. Xi secured a norm-breaking third term as Communist Party chief in October, and stacked the leadership with allies who sang their leader’s praises and trumpeted his vision of a thriving China. That rosiness dissolved amid intensifying economic pain and a wave of public protests against Mr. Xi’s zero-tolerance Covid strategy of lockdowns and border controls, followed by a haphazard dismantling of pandemic protocols that threatens to further batter the world’s second-largest economy.

Some analysts describe China’s tumultuous exit from zero-Covid policies as largely self-inflicted pain, exacerbated by Mr. Xi’s domineering style. The repercussions could be profound for Mr. Xi, who had touted his pandemic strategy as an example of the Communist Party’s superior governance.

“This is likely to be a year of turbulence for Xi Jinping,” says Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy in Singapore.

The party’s energies are set to be consumed managing the economic and social impact from the end of zero Covid, as well as restoring public trust, Mr. Wu says, adding that the paramount leader’s prestige is at stake. “Xi claims all the credit but deserves all the blame, too.”

Seeking ‘reasonable’ growth

Chinese leaders have struck a stoic tone. They promised to deliver “reasonable” economic growth in 2023, calling on officials to stimulate domestic demand while signaling plans to further ease regulations that have triggered a downward spiral in the property market and hampered private business investments.

Mr. Xi also brooked no criticism of his top-down methods. At a Politburo meeting in December, Mr. Xi insisted on “absolute loyalty” to his leadership “under any circumstance,” while appearing to blame local officials for faulty implementation of his policies.

Travelers in Hong Kong going through border control on Jan. 8 as the border with mainland China reopened amid eased Covid restrictions.

Photo: Lam Yik/Bloomberg News

“We have now entered a new phase of pandemic controls, where tough challenges remain,” Mr. Xi said in a televised New Year message. “Let’s make extra efforts to pull through, for perseverance is triumph, unity is victory.”

Many economists expect a fraught year ahead for China, citing the risk of surging Covid-19 infections disrupting supply chains and overwhelming the healthcare system. Though some analysts forecast a rebound in commerce and consumption after fresh outbreaks subside, possibly in the spring, it remains to be seen how firm this recovery will be.

“The transition to living with Covid will be a bumpy one, not least because of the abrupt change in policy itself, which leaves many people unprepared (and unvaccinated) and the medical system inadequately geared for the surge in cases,” Bert Hofman, director of the East Asian Institute at the National University of Singapore, wrote in a recent newsletter.

Tentative consumers

Chinese consumers appeared tentative as 2022 drew to a close. Domestic trips edged up 0.4% over the New Year holiday weekend compared with the same period a year earlier, while tourist spending ticked up 4%. Movie box-office receipts fell more than 45% year-over-year.

Beijing also faces an uphill battle in rebuilding confidence among businesses, which increasingly regard Mr. Xi’s government as capricious in setting policy, says Jörg Wuttke, president of the European Union Chamber of Commerce in China.

In a 2022 survey of its members, the EU Chamber reported that 60% of respondents reported increased difficulties in doing business in China, compared with 47% in the previous year, in part due to the opaque regulatory environment and the increased politicization of business. “We associate China with a very well-planned, well-organized government, and all of a sudden we see it capitulate in the face of Omicron,” Mr. Wuttke says. “That takes away a lot of trust in the government’s abilities.”

The onus therefore falls upon the Xi administration to restore public confidence, economists and business groups say. “Chinese citizens know who is in charge,” says Andrew Collier, managing director of Orient Capital Research in Hong Kong. “The huge death toll, coupled with the collapsing property market, are going to test the people’s trust in Beijing in 2023.”

Russian President Vladimir Putin and President Xi. China’s support of Moscow during the war in Ukraine has strained relations with the West.

Photo: Alexei Druzhinin/Associated Press

International tensions

On the diplomatic front, Beijing’s transition to a postpandemic future has raised hopes that a revival of cross-border interactions could help mitigate geopolitical tensions with the West. Mr. Xi himself has already re-emerged from a self-imposed absence from the international stage by attending a number of multilateral summits in the latter months of 2022.

China’s ties with Western governments remain fraught over Beijing’s support for Moscow throughout the Russian invasion of Ukraine. Tensions with the U.S. still simmer even as Mr. Xi and President Biden, who met in November, pledged to restore dialogue and a measure of stability in a fractious relationship.

“Like Washington, Beijing seeks greater stability in the near term while investing in efforts to deter and counter perceived threats,” says Jessica Chen Weiss, a Cornell University professor who studies Chinese foreign policy. Tensions aren’t likely to subside, she says, “without reciprocal actions to lower the temperature,” while the campaigning ahead of the 2024 presidential elections in the U.S. and the island democracy of Taiwan could add complications.

Beijing, which claims Taiwan as its territory, continues to regard with deep suspicion U.S. efforts to strengthen cooperation with the island. Since then-House Speaker Nancy Pelosi’s August visit to Taipei, which China condemned, the People’s Liberation Army has conducted an array of combat drills that showcased capabilities to cut off Taiwan. Nonetheless, the Biden administration has pledged to continue providing arms and training to help Taipei defend itself.

Notwithstanding recent setbacks, Mr. Xi seems set to double down on his priorities, says Mr. Wu, the Singapore-based academic. “In difficult times like these, he often emphasizes the need for greater ‘fighting spirit,’ and insists that they must overcome any challenges.”

Mr. Wong is a reporter in the China bureau of The Wall Street Journal. He can be reached at chunhan.wong@wsj.com.