Business

The End of Pragmatic China


While most countries are trying to move past the pandemic and return to normal life, the Chinese government has kept COVID at the heart of its national policy. As China’s major cities slowly emerge from weeks of economy-crushing shutdowns, the country’s leaders continue to boast about successes battling the coronavirus, even as they wrap their citizens in a web of restrictions, struggle to find them jobs, and isolate them from the world. There’s no sign this will change any time soon, either: Chinese sports authorities recently announced that, because of its COVID controls, China would not host an Asian soccer tournament scheduled to begin in a year.

Watching China’s maniacal fight against COVID, it’s easy to wonder what’s gone awry with the country’s leadership. In fact, China’s pandemic-fighting efforts are only the most obvious example of a greater shift in the way the country is governed. The Communist regime has always been brutal, but it was at least predictable and, in its own way, practical. While much of the developing world has in recent decades been mired in political tumult, China has stood out as an oasis of stability, with a leadership team that changed with clockwork regularity and a consistent policy direction. That’s been the often-understated foundation of China’s ascent on the world stage.

More and more, however, politics is beginning to trump pragmatism. The change has been percolating for some time, but it is also inseparable from the rise of Xi Jinping. He has concentrated more political power in his own hands than any other Chinese leader in decades, in the process upending the more balanced, government-by-committee approach that has predominated since the 1980s, thus leaving the most important decisions of the state—and the future of the world’s most populous country—dependent on one man and his ideas, ambitions, and political calculations. China is entering a new era in which it “begins to veer steadily more wildly based on the whims of a single individual,” Carl Minzner, a senior fellow at the Council on Foreign Relations, told me. “It is a very dangerous trajectory.”

The result could alter China’s position in the world, and international economics more broadly. Multinational companies, so vital to the country’s industrial juggernaut, could redirect their investment elsewhere over worries regarding the future direction of Chinese policy, reversing China’s integration into the global economy and reordering supply chains. A less predictable foreign policy might further strain Beijing’s relations with its Asian neighbors, and with the United States. And most of all, China’s 1.4 billion people, already unable to participate in their own government, will be left adrift on the unsure waves of Chinese politics—and Xi’s predilections.

All of this amounts to a flashback to an earlier, uglier period in Chinese history. The chaotic initial decades after the founding of the People’s Republic of China in 1949 were dominated by the political machinations and ideological zeal of Mao Zedong, the regime’s founder. He commanded such authority that his every utterance was Communist scripture. This unchecked power, however, caused the horrors of the Great Leap Forward (1958–61), which left an estimated 30 million dead from famine, and the Cultural Revolution (1966–76), which convulsed Chinese society in violence and disorder. When Mao died in 1976, he bequeathed his successors a government in tatters and a nation in desperate poverty.

The reform movement that followed was, to a degree, a reaction against the vicissitudes of one-man rule. China’s new leader, Deng Xiaoping, did not wish to expunge Mao’s legacy. His contributions “cannot be obliterated,” Deng once said. But he and his fellow reformers did overhaul the way China was ruled. Out went Mao’s personality cult; in came a governing system based on power sharing, with regular leadership transitions and a well-defined policy platform underpinned by Deng’s mantra of “reform and opening up.” Though the system still constrained public discourse, within the halls of power, this broader framework allowed for greater discussion of policy and an infusion of expertise. The Chinese government became known for its technocratic skill, especially in managing the complex process of economic development. Daniel Bell, the dean of the School of Political Science and Public Administration at China’s Shandong University, went so far as to suggest renaming the Communist Party the “Chinese Meritocratic Union.”

Such characterizations were exaggerated. The reformist era witnessed its fair share of fiascoes, including the 1989 massacre at Tiananmen Square and the long-term disaster of the one-child policy. But the new governing model was, in other important ways, tremendously successful. China became the workshop of the world not merely because of its cheap labor but also because international investors could be assured of something far rarer and more valuable: predictability.

Xi has undermined this governance system by capturing control over policy and sidelining what little opposition existed within the party. He “has worked hard and been successful to shape decision-making processes around his person,” Nis Grünberg, the lead analyst at the Mercator Institute for China Studies, recently noted. “Following party policy now essentially means for all party officials to follow Xi’s lead.” Loyalty to Xi has also become a primary factor in getting top-notch jobs in government agencies and other posts. “Looking at the cohort of cadres promoted,” Grunberg continued, “it becomes evident that those with personal or professional ties to Xi, and/or have shown loyalty and positive engagement with his politics, are overrepresented.”

That has completely changed how decisions are made at the upper echelons of China’s government. “As the power has begun to reconcentrate at the top and increasingly in an individual person … there is less space to debate issues,” Minzner explained. “Governance practices which people are used to being followed, the relatively more predictable technocratic path, now are starting to veer somewhat more erratically.”

Xi Jinping is seen on a screen in a museum.
Credit: Andrea Verdelli / Getty

The big test for China’s system of collective governance may be looming. Xi is widely expected to sweep aside the regular rotation of top leaders at a Communist Party congress later this year and remain in power for a third term, something none of his reform-era predecessors has done, and could potentially hold on to the post of president for life. Backed by a relentlessly promoted personality cult, Xi is becoming the most powerful figure in modern China since Mao himself.

These longer-term and systemic shifts have, in large part, driven Beijing’s inconsistent and confusing policies—including zero COVID. The policy, aimed at keeping COVID infections at or near zero, has saved lives, so a commitment to it is understandable. But there is clearly frustration within the highest levels of government and business over the policy’s current course. Premier Li Keqiang, officially No. 2 in the leadership hierarchy but largely marginalized by Xi, has suddenly found his voice and repeatedly warned of the damage being done to economic growth and jobs, the latter being of special sensitivity to a Communist Party terrified of social disorder. Yet Xi has consistently reaffirmed the correctness of zero COVID, and as far as he’s concerned, the case is closed. A recent meeting of China’s most senior leaders even came out against any criticism of the policy. James Liang, an influential business leader and a co-founder of the Chinese online travel agency Trip.com, was banned by a local social-media platform after he publicly questioned the zero-COVID approach.

Practical alternatives to zero-COVID, meanwhile, remain untapped. China watchers are collectively baffled by Beijing’s reluctance to vaccinate its vulnerable elderly—more than 90 million people over the age of 60 are not sufficiently jabbed—though they have upped their efforts recently. Instead, the country remains enveloped in tough restrictions. In mid-May, the government limited its citizens’ overseas travel. Purchasing ibuprofen in a Beijing pharmacy rings the alarm with local health authorities, who then require the buyer to get a COVID test. Beijing and Shanghai appear to be implementing a regime of constant monitoring: An up-to-date COVID test is necessary to go about much of your daily life—enter office buildings, dine in restaurants, or ride the subways—forcing residents to spend time and effort getting perpetually swabbed.

The head-scratchers aren’t limited to COVID rules. Even economic policy—long what the party was most respected for—has become unusually erratic. In late 2020, the government launched a sudden and haphazard crackdown on Big Tech. Regulators yanked the stock listing of the fintech powerhouse Ant Group only two days before its launch, then forced another prominent firm, the ride-hailing app Didi Chuxing, to announce its delisting from the New York Stock Exchange five months after its debut. Even the normally mild-mannered International Monetary Fund had harsh words for Beijing in its recent assessment of the Chinese economy, noting “the multitude, timing, seemingly uncoordinated, and discretionary nature of these interventions,” adding that it “has led to heightened policy uncertainty.” Now, with the economy faltering under zero-COVID lockdowns, policy makers are beating an equally hasty retreat: In mid-May, senior officials schmoozed tech executives at a conference with promises of support, including for international stock listings.

Much like Mao, Xi’s mere comments can send officials scrambling. Last August, he gave a talk about “common prosperity,” or narrowing income disparities, and the term instantaneously became all the rage, plastered across newspapers while executives rushed to open corporate wallets for poor farmers and other charitable causes. But the slogan has yet to evolve into a thought-out policy framework, creating yet more uncertainty. Bert Hofman, the director of the East Asian Institute at the National University of Singapore, told me in an email that “common prosperity” remained an “aspirational goal,” whereas “concrete measures are mostly still to be developed.”

In this way, Xi’s approach has taken on aspects of old, Maoist mass campaigns. Mao conceived the disastrous Great Leap Forward based on his conviction that China could catapult into the ranks of the advanced economies by sheer public effort alone. Workers and farmers just had to labor harder and longer, and keep the Communist faith. So, too, does Xi seem to believe that COVID can be overcome by national willpower. Having declared the battle with the virus a “people’s war,” Xi and his administration have characterized pandemic measures as an almost militaristic movement against an “invisible enemy,” which has required “tremendous sacrifice” and “solidarity and resilience” to achieve “victory.”

 A food delivery driver looks through a blue fence during lockdown.
Credit: Kevin Frayer / Getty

China may regress only so far. Xi is not Mao, nor is his agenda the same. But Xi does risk unraveling the gains made in the previous pragmatic decades. Zero COVID, for instance, is souring international companies on China. A recent survey by the American Chamber of Commerce in China found that more than half of the respondents have delayed or reduced investments in the country. The problem, says Joerg Wuttke, the president of the European Union Chamber of Commerce in Beijing, is the uncertainty the policy has created. “The predictability of the Chinese market was always one of its strengths,” he said in a recent briefing, “and that has gone out the window.”

The same could be true of China’s foreign affairs. “Xi has established a new model of the foreign-policy decision-making process that is focused on his sole authority,” Yun Sun, a senior fellow at the Stimson Center, recently explained. “Xi, his strategic personality, and his foreign-policy vision are the fundamental origin of China’s foreign-policy behavior today,” and thus “the assertiveness and coerciveness manifested are the direct result of Xi’s political beliefs and the system he has designed to enforce his vision.” That means security analysts will now have to factor Xi’s personal ambitions and political calculations into their projections of Chinese global policy. For instance, claiming Taiwan has long been a top priority for Beijing. Now a case can be made that having one man holding the levers of Chinese power, not properly constrained by an administration packed with cronies, makes war over the island more likely—akin to Vladimir Putin’s grab for Ukraine.

This is where Xi really differs from Mao—in the China he commands, and in the wider impact he has. Mao’s disasters fell mainly on the Chinese people. That’s bad enough, but in a world where China is a rising power, with greatly enhanced economic and military might, how Xi governs will affect all of us. That means the whims of one man have the potential to lift or sink the global economy, or throw the world into conflict and turmoil.

Yet from an American perspective, Xi’s concentration of power isn’t all downside. By marginalizing the technocrats and constraining policy debates, Xi may be undercutting China’s competitive edge in its contest with Washington. His insistence on zero COVID, erratic attitude toward the private sector, and hostile foreign policy are combining to sap the economy’s vitality, depress investor sentiment, alienate more countries, and isolate the Chinese from the world. None of that bodes well for China’s future as a great-power competitor.

In a sense, Xi is proving why advocates of democracy believe authoritarian regimes ultimately fail. Communist China was a basket case under one-man rule. It could be again.



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