5 Bad Things in China’s Future (and 3 Good Ones)

Nearly seven years into the Xi Jinping administration, China is facing arguably the most restrictive domestic political environment since the aftermath of the June 4 crackdown 30 years earlier. From a massive system of detention and surveillance in Xinjiang to the obliteration of the country’s once robust intellectual discourse, Xi and his allies have moved to tighten Chinese Communist Party (CCP) control over nearly all aspects of economic, political, and social life.

And while the word “totalitarian” overstates the capabilities of the CCP, Xi certainly aspires to that end. It’s captured in his reprisal of an old Mao Zedong quote, “Party, government, military, civilian, and academic; east, west, south, north, and center, the party leads everything.” This CCP-centric conception of Chinese modernity now imbues the country’s political culture, leaving little to no room for nonparty individuals or organizations to claim a leading role in the story of China’s rise.

For outside observers, the question of China’s future political trajectory remains paramount. It may continue to slide toward totalitarianism—or perhaps pull back toward the kind of limited liberalism it seemed to be moving toward in the 2000s. While the record of analysts in predicting such paradigmatic changes is abysmal—thanks as much to authoritarian opacity as to our own epistemic shortcomings—imagining possible futures is critical to how the rest of the world deals with China.

Below are likely signs of a distinct change in the status quo, either signaling an intensification of political control or indicating that the pendulum is swinging back toward political and economic liberalization and reform. The Sinologist Richard Baum argues that China undergoes periodic swings between “tightening” (shou) and “relaxation” (fang). After years of tightening, the country may be due a reprise—or things could get much, much worse.

1. The Great Terror

For three straight summers, rumors have persisted that President Xi Jinping is facing rising internal dissent that threatens his ability to remain in power. None of those threats has materialized, nor are any of them likely to. Xi has spent the better part of his seven years in office attempting to coup-proof his hold on power. This is not unique to Xi—all authoritarian leaders fear challenges to power coming from their elite rivals. “The art of governing,” French King Louis XIV told his heir, consists of “knowing the real thoughts of all the princes in Europe, knowing everything that people try to conceal from us, their secrets, and keeping close watch over them.”

Yet even if Xi can feel relatively secure in his control over the security services and the People’s Liberation Army, the only way to guarantee his own political survival is to constantly be on guard against organized dissent. But this proves difficult in a political system where there’s only one political party and where all officials are pressed to declare loyalty to Xi. It’s difficult for an autocrat to determine who’s truly loyal and who’s going along until the wind changes.

Such difficulties of political sorting could lead to intensifying paranoia, and just as Joseph Stalin launched his Great Terror against a phantom menace, so too might Xi feel compelled to transform an already extraordinary anti-corruption campaign into a more sustained and overt purge of political enemies, both real and imagined. His main potential rivals at the top of the party have already been imprisoned, from Bo Xilai to Sun Zhengcai, but a new round of purges could be far more sweeping—and potentially deadly.

2. A Manufactured Personality Cult Emerges

“What is this? Why do you praise me alone, as if one man decides everything?” So Stalin reportedly said to his deputy Lazar Kaganovich. According to the historian Stephen Kotkin in his extraordinary multivolume biography of the Soviet leader, Stalin initially resisted the systematic fawning that soon metastasized into full-blown cult of personality. Mao likewise objected to the early signs of a leadership cult but later warmed to it as he glimpsed its effectiveness as a political weapon.

Every Chinese leader gets his share of praise, but the flattery lavished on Xi has already gone far beyond his predecessors. Signs of systematic bootlicking are already manifest in today’s China, with appellations such as “the people’s leader” and the mandatory studying of Xi Jinping Thought on a dedicated Xi Jinping mobile app by CCP cadres. And if a political system acts as if there is a cult of personality even if there isn’t a shred of sincerity, the byproduct is nonetheless a policy environment that careens toward hypersensitive political correctness and a stifled intellectual climate.

3. Xi’s Third Term

When in March 2018 he pushed through the removal of term limits on the office of the presidency (as distinct from his more important title of CCP general secretary, which carries no such limitation on term), Xi effectively declared his desire to remain in power for life. This shouldn’t come as a surprise, for it is the natural tendency of all political leaders. Young Americans are taught about President George Washington relinquishing power and returning to his farm precisely because the act of abdication is so rare.

Xi would not have signaled his intentions so early unless he felt there was no effective opposition. Yet the intention to remain in power is distinct from the ability to do so, and the real test of Xi’s control over the political system will come in 2022 at the 20th Party Congress, when, according to a norm that previously held since 2002, he would step down from his leadership of the party after two five-year terms. If he remains in power past this date, not only would this signal an extraordinary level of political authority, but it would also signal that China’s trajectory would remain oriented toward Xi’s particular form of CCP domination.

4. Beijing Turns Hong Kong Into a Police State

As of this writing, the question of how Beijing will respond to the ongoing unrest in Hong Kong hangs uneasily over every discussion of the city’s future. What’s clear, however, is that Beijing believes it has no good options, hence the extraordinary delay by Xi and the party leadership since protests broke out in June. Such can kicking, however, merely “sharpens the contradictions” (to borrow from Karl Marx), thus making the underlying disputes more complex and seemingly intractable.

Should Beijing feel compelled to use force to break the stalemate, for example by imposing martial law and arresting thousands of protesters, Hong Kong will turn into a de facto police state. Greatly increased repression in the mainland will follow as party authorities go on high alert for any activism or agitation, and a massive propaganda campaign will flood Chinese media. Relationships with the outside world—which cares about Hong Kong far more than any mainland city—will sharply deteriorate, continuing a spiral of paranoia. This will be uncharted territory for Xi and the CCP leadership, but when the party feels threatened, its muscle memory is fear and coercion.

5. A Massive Economic Stimulus—for the State

In the wake of the 2008 global financial crisis, Chinese authorities unleashed a large-scale fiscal stimulus program equal to 11 percent of the country’s GDP. While this had the intended effect of insulating China from the full force of the economic slump, the longer-term and unintended impact was to expand and solidify China, Inc., the sprawling system of state-owned enterprises and quasi-private companies that are sustained by the CCP’s management of the economy. Xi’s accession to power in late 2012 solidified this trajectory. As the economist Nicholas Lardy writes in his recent book, The State Strikes Back: The End of Economic Reform in China?, since 2012, “private, market-driven growth has given way to a resurgence of the role of the state in resource allocation, and a shrinking role for the market and private firms.” Today, facing a slowing economy and struggling with both deleveraging its debt-bloated system and dealing with the ongoing trade war with the United States, the Xi administration is again wrestling with the question of how large of a stimulus package it should deploy. If the economy spirals out of control, we will likely see a redux of 2008, with a resultant further strengthening of the state sector over the private economy.

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1. Return of Economic Gravity

The financial exigencies of operating a modern-day national security state are extraordinary, with the CCP’s spending on domestic security now estimated to be 118 percent of its external defense budget. Indeed, as the deposed former security czar Zhou Yongkang said in a 2010 speech, maintaining China’s internal stability is “extremely onerous.” China’s accumulating debt levels (now over 300 percent of GDP) will be increasingly difficult to service as its economy continues to slow.

China is also staring at a significant demographic crunch in a few years’ time, with both a shrinking workforce and a rapidly aging population, creating a potential fiscal nightmare. For decades, it appeared as though the Chinese economy operated by a different set of rules while Chinese regulators were gifted with powers lacking in developed economies. The return of economic gravity could force the CCP to finally enact many of the more fundamental economic reforms that it has been promising for decades, most recently during the Third Plenum of the 18th Party Congress in 2013. And as has been pointed out repeatedly, including by the occasional senior party leader, enduring political reform requires changes to China’s political system, including allowing more space for civil society and fewer political constraints for the country’s regulators.

2. A Change in Leadership

While the prospect of Xi Jinping being removed from office is slim, it is not, strictly speaking, impossible. Xi, despite his best efforts, is mortal, and despite the apparent ability of party leaders to live extraordinarily long lives—thanks in part to a dedicated medical unit—Xi faces the same actuarial odds the rest of us do. Even assuming a sudden change in leadership, however, the probability of political liberalization is dim.

Even under the more reformist Deng Xiaoping, there was never much appetite for fundamentally reforming the political system, an instinct that was only further strengthened after the collapse of the Soviet Union in 1991. That being said, several more years of inept governance by the current administration could provoke a leadership challenge premised on his misrule of the economy. Xi’s opponents might accelerate this process, not by initially challenging him, but instead by slowly grinding the government to a halt through inaction and foot-dragging. The upcoming 20th Party Congress in 2022 might then set the scene for a more concerted effort to unseat Xi, with the victorious coalition pushing for a more tolerant approach to civil society and a more reform-minded economic policy regime.

3. Rising Domestic Pressure

Despite the heroic efforts of some statisticians and social scientists, what the Chinese people think on a range of important policy and political questions remains a fundamental mystery. For example, how much popular support does Xi have? Most discussions of his favorability devolve into anecdotes and crass assumptions in place of the data we have on most other countries around the world. As well as the obvious issues of speaking up in an authoritarian state, there is also the issue of “preference falsification,” wherein people misrepresent what they actually think due to social pressure. This means that even the much-vaunted Beijing cab driver, the source of all wisdom, may not be giving analysts a clear picture.

What’s certain, though, is that the CCP spends a significant amount of time and resources attempting to subvert, subdue, and sabotage the ability of Chinese citizens to freely express their opinions and to organize around them. It’s reasonably likely that the CCP’s own estimation of popular support is fairly low, otherwise it would not create such difficulties for researchers looking to measure popular sentiment. From labor unrest to protests by military veterans, there are numerous fault lines in China, and a further slowing economy might be the necessary catalyst for intensified public grievance, which in turn might spark a policy direction change in Beijing.

Unfortunately, the orientation of the CCP and recent political developments in China strongly suggest that the country’s trajectory will remain biased toward further tightening. Even possible loosening will be tightly limited by the fundamental needs of the CCP. As the CCP nears the 100th anniversary of its founding in 1921, with seven decades spent as the sole governing authority in China, analysts have fairly good idea of how the party operates and what it wants. While this experience does not rule out the possibility of a more fundamental directional shift toward political pluralism and a rights-based approach to social rule, it seems a wishful hope at best.