It’s been only a month since China’s Xi Jinping strode forth as a master of the universe. He had vanquished his enemies and secured a third term as Chinese Communist Party (CCP) secretary general. The 69-year-old likely was set to rule for life.
He packed the Politburo with lackeys and the Central Committee with supporters. An impressive propaganda apparatus sang his praises. He had clearly eclipsed immediate successors Hu Jintao, who was tossed from the meeting, supposedly for ill health, and Jiang Zemin, who obviously was unhealthy and died last week. Xi collected the party and government titles eschewed by famous “paramount leader” Deng Xiaoping. Only Mao Zedong, who made both the CCP and the People’s Republic of China (PRC) his own, stands above Xi. And who knows? Perhaps Xi will gain that final summit by the time he leaves office.
Or not.
As November was ending, protesters hit the streets in a dozen cities, including Beijing and Shanghai, the country’s political and commercial hearts. Students also turned out at some 80 universities to demonstrate, reviving a long history of activism that had largely disappeared after the 1989 Tiananmen Square crackdown.
The regime quickly dispersed the protesters, offering conciliatory words on COVID, sending students home early from school, and threatening or detaining people who could be identified. However, the regime cannot rest easy. Xi and his enforcers have lost the young, who are frustrated with declining economic liberties, intrusive personal restrictions, lack of public accountability, and destructive zero-COVID policies. Having challenged the regime once, they are likely to return more vocal and active.
And that’s only the latest problem faced by Xi and the CCP. Beijing poses a significant challenge to free peoples around the world, but Americans should feel confident. Despite the obvious problems at home, the U.S. retains important strengths, and the PRC suffers from important weaknesses. Policymakers should bear this balance in mind and avoid mimicking Chinese policies in response.
For instance, despite spending more on internal security than on external defense, establishing a formidable surveillance system, and steadily shrinking the space available for independent expression, the regime just saw its streets fill with discontented protesters. Although initially animated by COVID authoritarianism, people began denouncing Xi, the CCP, and dictatorship. They also called for human rights, democracy, and freedom of expression. So much for Xi’s recent demand that the population shut up and follow him.
China remains a poor nation, despite years of economic growth. Mao and the early revolutionaries imposed totalitarian economic controls, hobbling an otherwise productive people. After Mao’s death, the new leadership, led by Deng, opened up the economy, but Xi is moving in reverse. Even if the PRC ultimately matches the U.S. economy in size, with four times as many people China’s per capita wealth will remain far behind.
This year, the PRC population is beginning to shrink, and it likely will fall behind India next year. China has a rapidly aging population and diminishing workforce. To that is added the social problem of too many men. Although the government is desperately pushing to increase fertility rates, many of the nation’s young are disdaining marriage and childbearing. Ominously, the PRC is growing old before it grows rich.
Beijing is essentially friendless in the world. Who else on earth is committed to Han ethnic superiority, a Leninist state, and Maoist revival? Russia’s Vladimir Putin clings to Xi out of desperation. Even the North Koreans don’t get along with the PRC. Antagonism toward the U.S. has driven them together, but it is easier for them to explain what they are against than what they are for.
China does have clients, customers, suppliers, agents, factotums, and others involved in transactions, big and small. However, even many of them have been insulted and sullied by Beijing’s confrontational “wolf warrior diplomacy.” Once friendly populations in Australia and South Korea, for instance, have turned sharply hostile.
Chinese economic policy is wretched and getting worse. Economic growth exploded after Mao’s death not because the PRC did so much right but because it stopped doing so much wrong. Relaxing agricultural controls freed up rural labor to staff factories. Allowing creation of private businesses reduced the role of inefficient, overly indebted state enterprises. However, state interference remained significant, only less destructive.
Today, economic productivity remains low. Xi is enhancing state control over even nominally private enterprises. The real estate market, which traditionally has accounted for nearly a third of Chinese economic activity, is overbuilt and in crisis. There no longer are surplus workers to employ; instead, the number is shrinking along with the population. Younger Chinese are dropping out, promoting such memes as “lying flat” and “let it rot.”
To move forward, real reform is necessary. Observed Zeng Xiangquan of the China Institute for Employment Research, “The structural adjustment faced by China’s economy right now actually needs more people to become entrepreneurs and strive.” However, Xi is going in the wrong direction. Indeed, his concerted attack on Chinese industry and entrepreneurs is driving the most productive producers abroad: For instance, Alibaba’s Jack Ma, whose public rebuke and disappearance from view caused some analysts to fear his arrest, now lives in Tokyo.
Beijing’s effort to seize the commanding technological heights is an expensive muddle. China spends more than any other nation on industrial policy — and more than on its military defense — but remains a couple generations behind the U.S. on semiconductor chips. Many subsidized enterprises have gone under. And despite the Xi government’s celebrated campaign against corruption, the tsunami of government cash has had its predictable effect. Some industry leaders face corruption investigations.
Internationally, the PRC has driven its neighbors together and toward Washington. Give former Foreign Minister Yang Jiechi credit for honesty. He bluntly explained to those who resisted Beijing’s demands that “China is a big country and you are small countries, and that is a fact.” The destruction of Hong Kong’s liberal system, which the PRC had agreed to respect for 50 years, undermined belief in Chinese government promises. Any lingering support in Taiwan for unification has dissipated. Japan is talking about doubling military outlays; South Koreans elected a government determined to take a tougher stance toward the PRC; and even the Philippines, after the bizarre presidency of Rodrigo Duterte, is snuggling closer to the U.S., negotiating expanded military access to Filipino bases.
China’s military has grown dramatically but remains well behind the U.S. The PRC does not threaten the American homeland or neighborhood. Rather, the contested grounds and waters are near China. If war comes, the battleground will be there. Although there is doubt that the U.S. could still impose its will on Beijing from thousands of miles away, the PRC would be fighting to prevent that rather than to dominate America. And the future is not over.
What might be the most ominous aspect of China’s political transformation, Xi’s reincarnation as Mao II, will weaken the PRC. As we discovered with the spread of demonstrations across China, Xi’s consolidation of power does not mean political stability. Dictatorships typically isolate the leader and leave him perilously ill-informed about anything he might not want to hear. There is little accountability for failure. And brutal autocracy is no friend of dynamic economic growth. The Soviet Union ranged from the terrifying brutality of Joseph Stalin to the enervating stasis of Leonid Brezhnev. Mao Zedong produced the terrifying brutality in China. Now Xi Jinping risks delivering the enervating stasis.
None of these factors mean that Americans should underestimate China. It’s an ancient civilization whose people have proved enormously productive around the world. Even the young are nationalistic, proud of and loyal to their nation. A Leninist state capable of conscripting private people and resources poses a unique challenge to America. Even good free marketeers must consider possible compromises to confront potentially malign Chinese ambitions.
Nevertheless, Americans should proceed with confidence, not fear. Despite some talk suggesting that Beijing already has won the bilateral struggle, nations that bet against the U.S. tend to lose. And the PRC’s very nature as a communist state undermines its efforts to dominate its neighbors, let alone the rest of the globe.
“Do not be afraid,” intoned Pope John Paul II long ago to people living in the shadow of what President Ronald Reagan called the Evil Empire. Soon thereafter that system ended up in history’s trash bin. Similarly, today Americans should not be afraid when dealing with China.
Doug Bandow is a Senior Fellow at the Cato Institute. A former special assistant to President Ronald Reagan, he is author of Foreign Follies: America’s New Global Empire.
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