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In recent months and weeks, Chinese leader Xi Jinping has displayed a growing sense of urgency. He has launched an unprecedented crackdown on domestic technology giants, stepped up military activities in the Taiwan Strait, and bullied countries that have crossed Beijing’s shifting redlines. Some analysts and experts argue that this behavior marks an increasingly desperate leader trying to stave off the country’s all-but-inevitable decline, perhaps even the coming collapse of Communist Party rule.
Yet if Xi is feeling truly anxious about his grip on power, he’s doing a remarkably effective job of hiding it. Despite far-reaching domestic challenges, the Chinese leader exudes confidence about China’s political system, its position vis-à-vis the United States, and the long-term stability of the Chinese Communist Party (CCP). Xi has also eradicated all possible opposition within the regime, as evidenced at this month’s Sixth Plenum of the party’s Central Committee, where a bold “history resolution” enshrined his political position alongside Mao Zedong, all but guaranteeing him a third term in power at next year’s 20th Party Congress.
Rather than reflecting insecurity, Xi’s recent impatience is better understood as driven by the view that China has a temporary window to address domestic headwinds and bolster its position and power in the international order. It is not fear of the party’s collapse that motivates him but a determination to see China claim its rightful global position at a time when it increasingly has the economic and military resources to do so. If China is to become a “modern socialist nation” by 2035, Xi believes bold action must be taken now.
This is not to say that the path forward for Xi or the party will be smooth. Far from it. Just as collapse is unlikely in the near term, so too is a seamless path to superpower status. China faces significant legacy and emerging challenges, many of which will be exacerbated by Xi’s tightening grip on power and his overconfidence in his ability to shape the country’s future.
But understanding Xi as determined rather than desperate has enormous implications for the United States’ approach to the bilateral relationship. Beijing’s recent moves suggest genuine self-assurance and yes, in some measure, even self-delusion. Like it or not, though, the United States and its allies should expect to deal with a confident China led by Xi for the foreseeable future.
Since the death of Mao nearly 50 years ago, the track record of U.S. assessments of China’s capabilities and intentions has been poor. Following the Great Helmsman’s demise in 1976, many American observers expected the CCP regime to collapse. It did not. The June 4, 1989, Tiananmen Square crackdown, followed by the demise of the Soviet Union less than two years later, convinced some of the most eminent China specialists that the end was nigh for the CCP. Yet within just a few years, China’s economy was growing at double digits. After the global financial crisis in 2008, many analysts depicted the party as having perfected a new model of governance and economic management, one capable of impressive feats of long-term planning and strategic calculation. Yet these estimates also proved to be overstated, as the recent turmoil surrounding the Chinese technology and real estate sectors have shown.
Now, some have resurrected the view that the party’s days are numbered. According to the new doomsayers, a rapidly aging population combined with growing debt, a retreat from market reforms, and growing international pushback will soon cause China to stall. As Michael Beckley and Hal Brands argued recently in Foreign Affairs, “China is tracing an arc that often ends in tragedy: a dizzying rise followed by the specter of a hard fall.”
But this latest iteration of the “China decline” argument suffers from the same basic shortcoming as previous versions: Beijing’s perceived weaknesses are not weighed against its potential and actual strengths. In the same way that a company cannot be judged by looking at only one side of its balance sheet, so, too, are assessments of China’s vulnerabilities incomplete without factoring in the tools and resources the country can throw at them.
Beijing no longer sees low growth as a threat to stability.
When the well-known list of problems—from debt to demographics—are viewed more closely, they portend a slowing economy, not a collapsing one. For example, China’s efforts to rein in its real estate sector will be complicated and potentially disruptive, as the unraveling of the giant property developer Evergrande has shown. Yet it is already clear that this is not China’s “Lehman Brothers moment.” Although the country’s aggregate debt continues to rise in nominal terms, it is largely denominated in the local currency, and the balance sheets of the major banks remain strong. Debt certainly matters, and China’s economy appears to be increasingly under strain, but a more realistic assessment suggests deceleration, not disintegration.
Similarly, the social and economic effects of China’s aging population are more complicated than they appear. The demographic picture is indeed bleak: some recent predictions suggest that China’s population will peak as soon as 2025, and the Chinese government itself has predicted that the country will lose 35 million workers in the next five years. Aware of the implications, Beijing has belatedly initiated a panoply of reforms, from long-overdue liberalizations to its draconian population control policies to increased investments in technology that it hopes will blunt the impact of a shrinking workforce. Without a doubt, these actions have come far too late, and China’s demographic outlook is unlikely to change anytime soon. Unless Beijing is able to find new sources of productivity to compensate for a graying and shrinking workforce, growth will suffer. But this is largely a long-term dynamic rather than a short-term one.
What is more, Beijing no longer sees low growth as a threat to social and political stability, as was the case for most of the 1990s and the early years of this century. For one thing, at a time when the country had a surge of new workers entering the labor force, it was imperative to maintain rapid growth. With fewer workers, however, the country doesn’t need breakneck growth. This shift was reflected in the official rhetoric of the 19th Party Congress in 2017, which stressed that, henceforth, the quality of growth would matter more than its quantity. As the recent history resolution at the Sixth Plenum put it, GDP growth is no longer “the sole yardstick of success for development.”
Perhaps the most effective tool Beijing has in its management of the country is its ability to achieve rapid results via targeted political, ideological, and regulatory campaigns. By ruling by authoritarian fiat, the party can mobilize and channel resources with remarkable speed. Such an approach may disregard the rights and freedoms of Chinese citizens and almost always creates vast amounts of waste. Yet time and again, the CCP has been able to surmount a difficult challenge simply by unleashing the full force of the party-state. During the COVID-19 outbreak, for example, despite initial bungling, Xi ordered a “whole of society” effort that not only kept deaths to a minimum but also helped engineer a rapid economic recovery by the end of 2020, even as the rest of the global economy languished. Campaigns often come at the expense of structural reforms, but their frequent, if temporary, success should not be discounted when assessing the resiliency of the regime.
Even if one remains skeptical of the results of CCP rule, it is clear that Chinese policymaking circles view the country’s unique political system not as a source of weakness but rather with increasing pride when compared with the United States and other democracies. When senior officials declare “the East is rising, the West is declining,” this is both propaganda and their actual assessment. Yes, problems in China’s system abound, and Beijing is worryingly underestimating the resiliency of American democracy. But it is hard to deny that the CCP in 2021 has been stronger, more capable, and in command of more resources than at any other time in its 100-year history.
Many predictions of the CCP’s decline rest on the view that the party faces growing disaffection within China itself. Among the indications of this are the vast amount of resources Beijing expends on internal security, including its repressive policies in Xinjiang and Tibet and the sweeping system of state surveillance that now exists in almost every Chinese city and town. The party’s increasing sensitivity to any perceived slight has also led some to argue that were it not for its monopoly on violence, the party’s hold on power would crumble. Of course, any attempt to assess popular opinion in an authoritarian system is difficult and imperfect even when polling and survey data exist. But the limited evidence that does exist belies such claims.
After decades of unimpeded economic and military development, Beijing has reached an inflection point. To maintain stability and prosperity in the decade ahead, the party will have to make a significant shift in its growth model and learn to maneuver in an increasingly hostile global order. China will confront difficult, even painful, strategic tradeoffs—between, for example, increased social spending as a result of a demographic graying and its ongoing military modernization—that it has until now been able to avoid.
Obsessed with avoiding the fate of the Soviet Union, Xi likely sees the continuation of his own rule as critical for dealing with these challenges. Unlike his immediate predecessors, who were limited to two terms, Xi is preparing to extend his rule for years to come. At the recent party plenum, Xi’s status within the party was elevated yet again, with the official rewriting of China’s communist history to position him as the country’s modern savior, laying the foundation for a certain third term as party leader after next fall’s 20th Party Congress.
Xi’s accumulation of power is, of course, not without controversy. His totalitarian impulses have led to increased, if low-key, grumbling even within the party. His cultural policies, which include purifying entertainment content and enforcing traditional notions of masculinity, sit uneasily with a population that is increasingly exposed to and connected with the outside world. And his growing intervention in the economy has caused frustration and concern in the Chinese business community, as large companies such as Alibaba and Tencent have come under intense political scrutiny. Xi’s actions to crush political opposition and civil society in Hong Kong have induced significant anxiety in the region, including in Taiwan, where polls demonstrate almost no desire for unification under the “one country, two systems” framework that Xi has proposed.
China will confront tradeoffs that it has avoided until now.
But Xi has built a power structure around him in which any challenge to his authority would be extremely difficult to mount. A lifelong student of elite party politics, Xi knows firsthand that China’s political system is a blood sport that demands constant displays of power and domination. It is thus no surprise that his anticorruption campaign continues to steam along, an omnipresent reminder to all party cadres that the feared investigation squads of the Central Commission for Discipline Inspection might well knock on their door if they don’t toe the official line.
But even if his own position remains unchallenged, Xi’s blueprint to transform China into a modern socialist nation by 2035 is far from assured. The domestic response to his policy agenda, the fundamental laws of economics, and the reaction of the global community will arguably shape China’s future as much if not more than Xi’s paper aspirations. Xi may be in power, but he’s not in control. This is a lesson all dictators learn at some point.
Perhaps more important, Xi’s unchecked determination and growing sense of urgency is leading Beijing to adopt actions and policies that are clearly working against China’s long-term interests. Pressure campaigns against Australia and Taiwan are not in fact cowing the local populations but rather instilling resolve. In reaction to Xi’s increasingly aggressive approach to other countries and his crackdown on Hong Kong, the United Kingdom has gone from a “golden era” of bilateral relations with China to a more hardened posture, as evidenced by the recent Australia–United Kingdom–United States (AUKUS) security pact. Similarly, relations with India have entered a new and more hostile period after violent skirmishes along the Chinese-Indian border. Indeed, there seems to be a direct correlation between the amount of authority Xi has over foreign policy and the number of international setbacks China faces.
If the United States wants to forge an effective and enduring approach to its China policy, analysts and policymakers must begin with an accurate, objective assessment of China’s national power. Underestimating the party’s resiliency will lead to unrealistic expectations of how much the United States can shape China’s domestic environment. Overestimating the CCP’s strength distorts priorities and leads to the misallocation of scarce strategic resources. Neither “collapsing China” nor the opposite, “indomitable China,” is a good starting position for developing a strategy. Over the next decade, even with a decelerating growth rate and in the face of rising international skepticism, China will likely continue to be a powerful actor on the global stage.
Given this reality, there are clear limits to what the United States can do to shape China’s trajectory. Pressure on Beijing to make domestic reforms will yield little. The party elite have concluded that their political system has been largely optimized to face the country’s growing challenges, and the events of the past several years have only confirmed for Xi that a rigorously party-guided economic system is the only path to achieve socialist modernization by 2035.
But the United States does have significant leverage in shaping the strategic environment in the Indo-Pacific. Xi will likely emerge supercharged from next year’s 20th Party Congress, and it is easy to predict that his multiyear pause from major state visits abroad will end with a diplomatic blitz around the region. Washington can blunt the effectiveness of this push by immediately applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the trade agreement that emerged after U.S. President Donald Trump walked away from an earlier iteration. Such a move would require real political guts, but it would also bring immediate and long-lasting strategic benefits.
The United States should also work to expand the Quad—its partnership with Australia, India, and Japan—to include a wider range of security and economic activities. A Quad leaders’ summit timed for just after the 20th Party Congress would deny Xi some of his post-congress glow. AUKUS should fulfill its stated mission by expanding to include additional partners, preferably non–Anglo Saxon nations, Japan being the most important, that represent the future leadership of the Indo-Pacific. Of course, no strategy on China can exist if the U.S. homeland is weak and divided. Any and all efforts to strengthen the fundamental resiliency of the United States are a blow to Xi’s view that China’s political system can bury liberal democracies.
Xi’s sense of urgency and focus, built on a perception of domestic strength and fleeting opportunity, have proven to be his most important assets. For now, the United States still possesses a sizeable aggregate advantage over China in military, diplomatic, and economic strength. But unless U.S. policymakers and analysts develop their own sense of urgency and focus based on an accurate assessment of China’s strengths and capabilities, that lead may not last.
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