Xi Jinping will soon be confirmed for a third term as General Secretary of the Communist Party and chief of the armed forces. Is your conquest of such undisputed power good for China or the world? Not. It’s dangerous for both of them. It would be dangerous even if he had proved himself a ruler of unparalleled competence. But it didn’t. The risks are currently ossification in Germany and increased friction abroad.
Ten years is always enough. Even a first class leader decays after such a long tenure. One with undeniable power tends to decay faster. Surrounded by the people he has chosen and protective of the legacy he has created, the Despot becomes increasingly isolated and defensive, even paranoid.
reform stands. Decision making is slower. Unwise decisions are not contested and therefore remain unchanged. The Covid zero policy is an example. If we look outside of China, we can see the madness fueled by Putin’s continued power in Russia. In Mao Zedong, China has its own example. In fact, Deng Xiaoping, a genius of common sense, adopted the termlimit system because of Mao, which Xi is now overturning.
The advantage of democracies is not that they necessarily choose wise and wellmeaning leaders. They often choose the opposite. But these can be fought safely and deposed without bloodshed. In personal despotism none of this is possible. In the case of institutionalized despotism, dismissal is conceivable, as Khrushchev noted. But it’s dangerous, and the more dominant the leader, the more dangerous it becomes. It’s just unrealistic to expect Xi’s next decade to be any worse than the previous ones.
How bad was your first decade?
In a recent article in China Leadership Monitor, Claremont McKenna College’s Minxin Pei believes Xi has three main goals: personal mastery; revival of the Leninist party state; and the expansion of China’s global influence. He triumphed in the former; formally successful in the second; and had mixed success in the latter. While China is now a recognized superpower, it has also mobilized a powerful coalition of eager opponents.
Pei does not count economic reform among Xi’s main goals. The evidence suggests that this is quite true. Is not. In particular, reforms that could undermine stateowned enterprises have been avoided. Stricter controls were also imposed on famous Chinese businessmen like Jack Ma.
Above all, the deep macroeconomic, microeconomic and ecological difficulties remain largely unresolved.
All three were lumped together as “unstable, unbalanced, uncoordinated and unsustainable” in former Premier Wen Jiabao’s description of the economy.
The fundamental macroeconomic problems are the excess savings, the associated excess investment and the resulting mounting mountains of unproductive debt. These three things go together: One cannot be solved without solving the other two. Contrary to the widespread thesis, oversaving is only partly due to the lack of a social safety net and the resulting high level of household savings. It is so high because household disposable income makes up such a small proportion of national income, while profits make up much of the rest.
The result is that national savings and investment exceed 40% of gross domestic product. If investments were not so high, the economy would collapse permanently. However, as growth potential has waned, much of this investment has been in unproductive, debtfinanced construction. This is a shortterm remedy with the longterm negative side effects of bad debt and reduced return on investment. The solution is not just to reduce household savings, but to increase households’ share of disposable income. Both threaten powerful selfinterest and have not materialized.
The basic microeconomic problems were widespread corruption, indiscriminate interference in the private sector, and waste in the public sector. In addition, environmental policy, in particular the country’s massive carbon dioxide emissions, remains an immense challenge. To his credit, Xi has acknowledged this issue.
More recently, Xi instituted policies to keep out a virus that is circulating freely in the rest of the world. China should have imported the best global vaccines and reopened the country after administration. That would have made sense and would also signal further confidence in openness and cooperation.
Xi’s renewed central control program is not surprising. It was a natural response to the erosive effect of greater freedoms on a political structure based on power that is inexplicable except from the bottom up. Widespread corruption was the inevitable consequence. But the price of trying to suppress it is risk aversion and ossification. It is hard to believe that a topdown organization under one man’s absolute control could reasonably, let alone effectively, govern an increasingly sophisticated society of 1.4 billion people.
Not surprisingly, China has become increasingly selfassured. Western reluctance to adapt to China’s rise is clearly part of the problem. But it was also China’s open hostility to the core values that the West (and many others) hold dear. Many of us cannot take seriously China’s adherence to Marxist political ideals that have proven unsuccessful in the long run.
Yes, Deng’s brilliant eclecticism worked, at least as long as China was a developing country. But reintroducing old Leninist orthodoxies into today’s highly complex China has to be a dead end at best. At worst, with Xi remaining in office indefinitely, it could become something even more dangerous for China itself and the rest of the world.
Translated by Luiz Roberto M. Gonçalves
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