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China, between expansionism and isolationist temptation

Xi Jinping accentuates his leadership and rewrites the Party's 100-year history
Communist Party of China

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Xi Jinping's establishment in power, on the verge of an unprecedented third term in office, generates as much security as uncertainty about the future path to be adopted by the People's Republic of China, which finds itself at an unexpected crossroads. Its economic development and international power, together with the stability of its leadership, would suggest a clear horizon. But the emergence of COVID and its difficult control, the cracks that have emerged in several domestic economic sectors, coupled with international unease over its growing dominance of world trade, open up a series of conjectures about how Beijing will face its immediate future.  The next five-yearly Congress of the all-powerful Communist Party will set the tone, with a leader determined to hold on to power longer than expected. Will he succumb to the totalitarian temptation, will China turn in on itself again? The signs of crisis are becoming clear, the solutions much more complex. 

Crossing the amazing glass bridge, a jewel of Chinese engineering, built in Mao's home province of Hunan, over the Zhangjiajie Grand Canyon, produces two kinds of vertigo. Its glass board is the longest (430 metres) and widest (6 metres) in the world, floating over a three-hundred-metre drop. Stepping on it and looking down immediately generates a fear of height in the passer-by. But it also makes one dizzy to think of the amounts invested to undertake a pharaonic work whose objective is mere contemplation for the tourist. At the height of China's economic and developmental boom, this was an icon of its transformation and its powerful calling card to astonish the world. How do you make such a risky architectural project profitable?  After visiting the suspension bridge during a pre-pandemic trip, I asked the mayor-governor of the area how many visitors and how long it would take to recoup such an investment. Without batting an eyelid, he replied that it was already paid for. "The cost would be recouped by the influx of domestic tourism alone". Indeed, there were hundreds of Chinese tourists and only a handful of Westerners. The lesson is that China was enough on its own to make its excessive spending profitable, if it organised its tourist travel flows properly. Now that we are in the Covid universe, the equation that there is no choice but to live off the domestic economy becomes even more true. And in the case of China, a population of 1.3 billion makes its economy much more capable of sustaining itself on the contribution of the domestic market than others. 

Partido Comunista China

Is China facing an option to retreat in the face of various economic symptoms that threaten its so far strong growth? With the emergence of various symptoms of economic crisis in large corporations and growing international distrust, it is crucial to see what position the Party and its leader Xi Jinping will take as he links the recent Central Committee meeting with the Congress meeting next year to determine China's political and economic future in the coming years. Already as omnipresent in the life of the country as Mao was, Xi has instead stopped travelling abroad. He has not taken a plane since the pandemic. Not to Davis, not to the G20, not to the climate summit. All he has done is appearances on screen and, especially, the telematic face-to-face with Biden. The pandemic forces him to keep his distance, perhaps to set an example, but also to protect himself against any unexpected contingency and not to leave his field of political survival for a single second. The power game in a superpower is not just any old thing, nor can it be left to improvisation. 

The political battle for power a decade ago was certainly a tough and competitive one. High-profile contenders such as Bo Xilai, then secretary general in the populous Chongqing region, fell by the wayside amid accusations of corruption, crime and collusion. His fate was jail. Now, in the face of a new episode of power adjustment in China, there is once again talk of tight control of the apparatus, of preventing any dissent, with voices also calling for a return to orthodoxy in the Party. There must be no loose ends in this key period between the recent Central Committee and next year's Congress, which will consecrate Xi's new mandate.  

The country's 370 most powerful men, the political and military elite, who make up the CPC Central Committee, held their annual four-day Sanhedrin in the second week of November, with only one item on the agenda, as vague as it was broad: a resolution on the history of the Party, which has just celebrated its 100th anniversary. This kind of readjustment with history has only occurred on two previous occasions. In 1945 with Mao and in 1981 with Den. It is well known that on both occasions the result was greater control of power by the leaders of the time. The consequence for the present time is just as clear. Xi will consolidate his power, begin a third five-year term next year and go down in history as the new great helmsman who has led China to its greatest period of economic prosperity and international power in the last hundred years. Difficult to envision just a few years ago, the leap forward of the new China engendered by Deng and consolidated by Xi is overwhelming. So far, no surprises. The leadership will not change, and even less so in this moment of post-cool crisis that would not allow any change. But what will be the economic lines and political strategy for the years to come? The question is much more open. 

Xi Jinping

The telematic summit between Xi and Biden has shown the world who are now the most powerful men on earth, making it clear that the old balance of terror between Washington and Moscow now has a new axis, in Beijing, and a clear protagonist in the current tenant of the Forbidden City. It has been emphasised that this dialogue in the distance, full of friendly references, is an attempt to dampen the known tension on the trade front - exacerbated at the time by Trump - and the growing tension on the military front (air pressure on Taiwan and Western response with nuclear submarines from Australia). Although both cases have already caused rivers of ink, not blood, the real battle remains in the economic field and the prospects for both sides are not promising. 

China, like everyone else, is still reeling from the Cavad hangover, which is having particular knock-on effects. It has generated distrust in the relocation of Western industries, due to the lack of products and logistical problems, resulting in the current shortage of supplies. Fewer companies think of China as a safe destination and foreign professionals who used to offer their expertise to the Asian giant are beginning to leave China due to the restrictions on mobility and the isolated life of the pandemic. 

China receives fewer inputs and remains very closed, and the covid effect is also being transferred to the political arena. We are safer in isolation. A historic temptation that could dash dreams of geostrategic and commercial progress such as the New Silk Road.  China's difficulties in the energy field are another hindrance to its hitherto unbeatable growth. Coal must be curtailed, but it remains the energy base and a major polluter. China is the world's biggest polluter. Oil and gas markets are more competitive and more expensive. China suffers like everyone else and its once highly competitive export products are also becoming more expensive. Its investment in reducing environmental pollution will also be the largest and far greater than that of the United States and the European Union combined. 

Xi Jinping, presidente de China

Additional economic problems have also emerged with intensity, such as the financial imbalances caused by excessive growth in the construction field with the serious problem of the Evergrande construction company and its inability to cope with unpaid loans. Other high-profile financial moves, such as the IPO of Alibaba subsidiary Ant Group, were put on hold because of the government's fear of spiralling out of control and shaking the foundations of the development programme on which Xi Jinping's power is based. The growth of debt and speculative movements are seen as two great sins of capitalism unbecoming of a regime of communist orthodoxy. 

In the midst of this crossroads, with the pandemic as an additional minefield, Xi's great moment of glory and his third term in office also appears to be one of great uncertainty about the safe path to take. Mao's portrait still presides over Beijing's most iconic monument, above the gateway to the Forbidden City, and while Xi wants to match it, it will be this litmus test of the balance between growth and communist orthodoxy that will write the end of his story. 

When Mao and Den, his two great predecessors in the history of the Party and China today, found themselves at crossroads of such calibre, their responses were always very drastic. Mao saw his power shaken by the failure of his economic policies and in response launched the Cultural Revolution that sent the most privileged minds in China to the countryside, eliminating dissidents and critics of his policies. Later Den embarked on the opposite path of economic reform and development of the country with Western techniques. But at the critical moment of popular demand for greater democracy by the Tianmamen protesters, his decision was to crudely and violently abort the protest. 

Presidentes de China

The visitor to Beijing will find that the entrances to the massive and emblematic square are still controlled by rules as strict as those for entering an airport: soldiers, police, x-ray machines, bag and clothing searches are the barriers that one encounters at the entrances. More than thirty years later the control has not been relaxed.  And the temptation of the current leadership could be to tighten control over all aspects of life in China. This is what the more radical and orthodox wing of the Party is calling for, to tighten it in every way. If the economic crisis deepens - because of energy, export, financial and other problems - The hard line of the party will advocate a clearer shift to that line, blaming precisely the capitalist excesses and financial decontrol as causes of the slower growth that is beginning to occur. If history is anything to go by, the hard line would have the upper hand. A democratic solution as a result of the economic growth of recent years does not seem to be on the horizon now, as analysts were venturing years ago. Rather, it could go in the opposite direction. At the cost of slower growth when China sees its achievements in ending poverty? It seems clear, given the current global outlook, that Xi Jinping's coronation for his third term in office may come surrounded by more fears than great splendour.