China has been driven into a “war mentality” but without a commensurate “war economy” to support Chinese communist leader Xi Jinping’s ambitions.
This is a profound indicator of the reality that, although Mr. Xi may push for a war against Taiwan, he hasn’t prepared the country to conduct it.
Mr. Xi’s fundamental lack of a coherent strategy has resulted in him instituting a disjointed array of reactive, short-term—and often conflicting—remedies to the collapse of mainland China’s economy and social cohesion and China’s creation of hostile neighbors.
His compounding failures have resulted in a growing air of desperation, notably a series of natural disasters in recent years—particularly in July and August—that has come to be seen as an augury of public rejection of his leadership.
Mr. Xi and his colleagues have implemented stopgap initiatives to stop the economic decline. Still, these are Western-style stimuli in a framework that’s neither a free market nor truly consumer driven. They are too little and too late to address the reality that the growth infrastructure was built on “tofu dregs” foundations: that is, foundations using poor materials and practices. But neither do the “Band-Aid” measures get to the core of China’s economic, infrastructural, or military realities.
Indeed, in an effort to portray the Chinese economic marketplace as similar in structure to Western market economies, the Chinese Communist Party (CCP) undertakes efforts to promote speculation in the stock market and consumer markets, which seem to be designed by Wall Street norms rather than Chinese ones.
The result is a daily deepening of the economic implosion of the country and commensurate public despair and unrest. Mr. Xi can’t devise deep and meaningful responses in an attempt to prevent the extent of political failures and natural disasters from becoming known to domestic audiences and foreigners.
The Chinese historical belief in the withdrawal of the “mandate of Heaven” from the leadership parallels Mr. Xi’s loss of international prestige and strategic credibility.
Henry Kissinger’s maxim—“If you don’t know where you are going, every road will get you nowhere”—was updated by this author in the 2006 study, “The Art of Victory,” to say, “If you don’t know where you are going, every road will lead to disaster.” Mr. Xi is now well down that unnamed path to nowhere.
Mr. Xi is now preparing to create a new round of the COVID-19 “fear pandemic” as a means of legitimizing broad population control measures, such as the recent “zero COVID” campaign that merely allowed all blame for economic collapse to be placed on the “health care crisis.”
This new wave of COVID-19 population control measures will, like the mainland Chinese economic collapse, significantly impact the international community. Indeed, the “new wave” of COVID-19 is designed as much to stimulate global panic as it is designed to force the Chinese population into obedience.
However, CCP General Secretary Xi has failed to grasp what kind of economy he actually needs to create to save the Party and its regime. He is even uncertain about what he inherited with the Deng Xiaoping-driven market-opening response to the desolation of the Maoist era.
As a result, Mr. Xi is attempting to resolve China’s economic implosion with neo-market economic stimulus initiatives when what he needs is to revert, at least for a period, to the kind of classic war economy under which both China and the Union of Soviet Socialist Republics (USSR) functioned for most of their existence. But it may be too late for that.
Such a war economy wouldn’t give China the kind of economic growth it claimed to have had over the past few decades, but it would direct the entire society into survival mode. At present, it’s out of control.
War economies don’t lead directly to sustained economic growth but are designed to prevent—stave off—implosion and defeat in the face of immediate threat. Mr. Xi has attempted to deal with the private sector, which has delivered growth in China as though it was part of a command economy. But after Deng (paramount leader from December 1978 to November 1989), it had become a “command economy with market characteristics,” much like the national-socialist economy of Germany in the pre-World War II decade.
That transformation into a marketplace benefited foreign buyers, commodity sellers, and investors, encouraging foreign investment in China and creating a hitherto impossible sense of optimism in much of the population.
Over the past decade, Mr. Xi has talked sporadically about a return to a “circular, internal economy” for China, such as Mao Zedong had attempted (and failed) to implement, which would imply that external investment, supply, or markets weren’t required. That would, in part, be a “war economy.” Still, it’s equally unrealistic, given that China can’t exist without food and energy supplies from the global market because it has inadequate domestic production of these vital elements.
A classical war economy would ensure that the state—or, in this case, the CCP—would have control of all of the elements of production and demand. The production would be geared to fighting the threat for national survival, and the population would be directed into that production, thereby creating full employment.
A permanent war economy, however, such as was attempted in the USSR, can’t be sustained indefinitely, in the same way that a perpetual motion machine can’t easily exist. A source of energy of one form or another is required to stimulate sustainable growth.
Most Allied nations during World War II created a war economy from (at the earliest) 1939 until 1945 but were then compelled to revive themselves at the well of a more open marketplace. Only the USSR, at that point, attempted to continue with a war or command economy (a communist economy) and ultimately ran out of momentum by 1990.
Today, the concept of a “war economy” must be evolved to embrace the reality that the concept of war itself has transformed. Communist China itself formally embarked on a path of “new total war” under the rubric of “unrestricted warfare” in 1999. It had been evolving the new concept of total war even before that, recognizing that it, like the USSR, lacked the resources, economy, and technology to defeat the global market economy centered around the United States after World War II.
Under the “new total war” doctrine, all elements of human life and nature can be weaponized to destroy opponents, and these are employed largely without resorting to kinetic force (although employing the constant threat of kinetic force). So a “new war economy” requires a range of social and traditionally nonmilitary weapons—particularly in the psychological realm, but also in the biological, chemical, and cyber fields—to conduct war against enemies, domestic and foreign.
There’s no doubt that the CCP has always viewed the weaponization of the entire society as fundamental to its strategic doctrine. Still, there has been little evidence that Mr. Xi understands all of this within a comprehensive strategic framework. He is, perhaps, more acutely aware of the various elements but without a comprehensive view or doctrine to create an effective national strategy.
The evidence of this is in the result he has achieved: chaos and collapse at home; enemies on every border (including a revival of Sino–Russian fundamental mutual hostility); and the continued resilience in the West, even though the West itself is at its lowest ebb of cohesion and prosperity for a century or more.
So even in the “race to the bottom” between China and the West, it seems clear that China will implode before the West.
Indeed, there may be two good reasons for Mr. Xi to put a major formal (kinetic) war with the West—particularly the United States—into abeyance if he wishes to survive as the CCP leader and if the CCP itself is to survive. Firstly, his insistence on publicly challenging the United States and the West militarily has provoked a substantial revival of concentration in the West in rebuilding and advancing military preparedness against the Western perception of a China threat. Secondly, Mr. Xi needs all of his resources—including the forces of military power—to stabilize, control, and cower his own population.
Nonetheless, Mr. Xi has postulated that the promised war to defeat Taiwan (the Republic of China) was more vital than anything else, including China’s economic well-being and the survival of its citizens. That, in fact, is the only thing he has to offer to justify the suffering of the population at this time.
Even so, he runs a contradictory campaign in which state-run media portray the economy as sound and recovering and the nationwide destruction of towns and cities (even Beijing) by natural disasters as minor and managed. So, in essence, by controlling the media message, Mr. Xi can’t then empathize with the Chinese population over what they see as the disasters afflicting them.
The problems they see don’t exist in the official media, so Mr. Xi can’t go out among the people to show solidarity with them. Thus, he is isolated from society even more than a normal CCP leader.
At the same time, Mr. Xi has been portraying the People’s Liberation Army (PLA) as being ready for that war with Taiwan, knowing that it would provoke additional conflicts with Japan, the United States, Vietnam, and India.
China, meanwhile, is happy to portray to the world that it has an alliance with Russia, as this gives the appearance that Beijing isn’t alone. But this alliance has always been a fiction. At the best of times, there has always been a deep and hidden mutual distrust between Moscow and Beijing, and each believes that the other illegally occupies its lands. Even during the Cold War, Beijing had a deep distrust of and rivalry with the USSR; and before that, Imperial China distrusted the Russian Empire. And Moscow has always distrusted Beijing.
The PLA knows that the war with Taiwan is one for which it’s unready, especially given the breadth of its likely geographic scope. The PLA leadership now appears to have made it clear that it may not obey an order to attack Taiwan.
Thus, Mr. Xi had begun to widen the circle of preemptive purges against PLA leaders even though he had once considered the PLA his power base.
Mr. Xi, then, has become trapped. He can’t be seen to back down on the Taiwan issue because he has no other distractions or justification to offer the population for its present agonies. Neither has he any vehicle to rebuild mutual trust with the PLA. He can only offer repression against both the population and the PLA unless he can rewrite the entire narrative of governance to justify a return to Maoist poverty and isolation.
In the face of this, Mr. Xi has no strategy other than to destroy his rivals, see his international opponents become preoccupied with disasters that he attempts to sow, and distract his domestic population.
Is it too late for him to devise a strategy for his and China’s survival?
If not, then the world needs to look toward the post-Xi and even post-CCP eras and all the instability leading up to that period.
