Commentary
It was supposed to be a crowning moment for Chinese Communist Party boss Xi Jinping. The once-every-five-years national congress of party poohbahs would formally extend his tenure beyond two five-years terms—a coronation set in motion at the last congress in 2017 when party leaders ditched the custom of identifying an eventual successor. Xi would claim stature in China’s history not seen since murderous tyrant Mao Zedong ruled and China would continue its ascent to paramount world power, surmounting the United States.
But only one of those things has happened. Xi has in fact
extended his tenure beyond the 10-year custom established after the dark days of Mao. With no successor identified and the party seemingly drained of rivals, he could be dictator for life. However, the greatness for China that Xi anticipated throughout the congress was called further into doubt. In the following week, some $6 trillion in Chinese stock market value has
evaporated.
Many investors had expected Xi to announce a pivot from China’s zero-COVID policy, which has turned Chinese cities large and small into internment camps at times. Even a handful of positive test results can lead party officials to order millions to stay home. Xi not only declined to signal a shift; he went out of his way to declare the policy a success and a model. Going into winter when COVID prevalence often increases, this probably means China will hold onto its disastrous policy at least until late spring. Some analysts believe it may remain policy for years.
Brutal lockdowns, travel restrictions, and
exotic COVID tests aren’t the only things holding back China’s economy and rise to greatness. There are even bigger clouds on the horizon.
Xi made it clear that ideology and party power are now more important than China’s economic growth. This won’t come as news to anyone who watched what happened in Hong Kong during the past three years. There, Beijing broke its promise to Britain to allow the former colony to keep its separate legal system and freedoms for at least 50 years. Press liberty and the right to protest peacefully went out the window with
a new national security law that means whatever the communist authorities want it to mean. They closed the most prominent pro-democracy newspaper and have its publisher, Jimmy Lai, in jail on phony charges. Capital and financial talent have quietly fled what was once the financial capital of Asia, but Xi doesn’t care.
China also faces a real estate crisis that could make the one America faced in 2008 pale by comparison. The sector, which accounts for one-quarter of Chinese gross domestic product, is heavily indebted and developers are having trouble servicing debt and paying other bills. Protests have erupted as Chinese families have
stopped making mortgage payments on homes they may never be able to inhabit. The crisis has not yet tanked the financial sector, but it is adding stress.
Another fundamental problem is that the model for growth China has used for the past two decades is spent. That model depended on importing U.S. jobs and manufacturing capabilities thanks to gullible trade policies and stealing U.S. intellectual property. Donald Trump’s fundamental shift on trade, which included tariffs and technology export controls, began to change this dynamic. China’s cost advantage also declined, causing low-cost manufacturing to flee to places like Vietnam.
How quickly has the trajectory changed for what was once an economic juggernaut that grew about 10 percent each year. China’s official
growth rate is now 3.9 percent, and that is probably phony as well.
So much for China achieving greatness and dethroning America. Under current circumstances, it actually faces decline.
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Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
