This colum was previously published in L’Express on october 13th 2022
Xi Jinping’s third mandate will at least be in line with one particular Chinese tradition: China’s excessive love of paradox.
China’s recent history has accustomed us to contradictions. The new five-year mandate is no exception and promises to be an explosive mixture of increased control internally and disruptive chaos externally.
On the home front, a break will come as ideology predominates over economic growth. Since his rise to power in 2012, every three years President Xi has continued to strengthen Party control over the country. In 2012 he targeted the ministries, which had become “states within the state”, under the guise of the fight against corruption. In 2015 the targets were those involved in the world of finance, following the implosion of the stock exchange bubble. In 2018, it was the private sector, seen as destabilizing and subsequently made to follow the example of Huawei. In 2021, it was the giants of digital services that came under control, taking youth under their wing. Logically, 2024 should see the coming of state capitalism, centered on state groups, industrialists and exporters, with high added value. A sort of Rhineland model, but one which will nevertheless be condemned to growth of less than 2% or 3% in the future because the country will be financially far less flexible. The fact that the private sector — the only sector that creates jobs — has been put in a straitjacket, cannot be counterbalanced by the official promotion of “10,000 little giants”, the Utopian dream of a Chinese Mittelstand at a time when the speeding up of B2B digitalization will, on the contrary, be calling for the competitive advantages of the economies of scale.
The obsession with control is also based on the concept of self-sufficiency vis-à-vis the rest of the world and the principle of a partial decoupling. Beijing will have to reduce its dependency on imports, both by upgrading industry, bringing self-sufficiency in semi-conductors up to 40% — scheduled to be achieved by 2025 — and by limiting domestic consumption, which is the very opposite of the promised “common prosperity”. However, China will remain open to the rest of the world, so as to maximize its exports. Therefore, on the one hand, economic growth, albeit weaker, but, on the other hand, by means of a very large trade surplus, a more favorable power balance with regard to the rest of the world –a third of global trade involves China in at least one stage of the manufacturing process. The result will be that the country will more or less withdraw into itself, which usually means slowing down technical innovation and reducing productivity increases.
Government propaganda will present these domestic sacrifices as being necessary
Lastly, government control over the population will also be strengthened, notably online. People will stop associating the Party with economic growth and will become impatient with promises of a new environmental society. The main form of social protest will be a falling birth rate, dropping to fewer than 10 million births a year as against the official target of 20 million. The increased independence of young single Chinese women, of whom many are involved in the business world, could be one of the main challenges facing the new leaders.
However, one should not underestimate how clever government propaganda can be. It will present domestic sacrifices as necessary in order to achieve the higher objective that President Xi has fixed: to “de-Westernize” world governance. This is intended to bring together numerous countries who believe that 10% of the world’s population should no longer be allowed to control a world order dating back to 1945. There are three priorities. Firstly, on the economic front, the “de-democratization” of the West, against a background of a considerable loss of credibility by the United States and the United Kingdom, and the rise of political parties on the extreme right. Secondly, on the military front, the “de-NATOization” of the world, since the USA will have to resolve itself to the end of the status quo in Taiwan and to the idea — current in China — that “Taiwan will be the making of the third mandate, and the third mandate will be the making of Taiwan.” Thirdly, on the economic front, the “de-dollarization” of the world, as the renminbi (the official name of the yuan) is fast becoming an alternative currency for trade in hydrocarbons with Russia and Iran and, who knows, may be with Saudi Arabia in the future.
Faced with these ambitions, the West is nevertheless confident that no viable alternative model sponsored by China exists; up to now its various attempts have not proved to work at all well: BRICS, the New Silk Roads, the Shanghai Cooperation Organisation, and the Asian Infrastructure Investment Bank have all been projects that have had no wide-reaching positive effects… But it would definitely be a mistake on the part of the West to look for an alternative Cartesian world order when China sees the future in terms of opportunistic alliances rather than a multipolar world. Its “limitless” friendship with Russia is the best example of this: changing according to circumstances, but constant in the maximization of China’s own interests.
This new mandate looks like being one of paradoxes: it will mark the end of the “40 Glorious Years” and will sanctify the normalization of Chinese growth vis-à-vis the rest of the world — but still accounting for almost 20% of world GDP.
The third mandate will therefore be seen as an intermediate period of generalized chaos, confirming the precept of the former Defense Secretary Donald Rumsfeld that “the mission will define the coalition.” This is a situation for which the Chinese feel they are far better prepared than Westerners, who are locked into a way of thinking that is too rational.
This new mandate therefore looks like being a paradox: in one sense, it will mark the end of the “40 Glorious Years” [translator’s note: an allusion to the period 1945–1975 in France — the “30 Glorious Years” during which the economy boomed] and will sanctify the normalization of Chinese growth vis-à-vis the rest of the world — but still accounting for almost 20% of world GDP. Thucydides’ trap could therefore be avoided: the United States, with its software, its cheap energy and its superiority in matters of defense, would succeed for the second time — after having done so once before with the USSR — in slowing down the economic development of its rival claimant enough to avoid a head-on conflict. On the other hand, this five-year mandate also heralds a period of unprecedented disruption of the world order, with the possibility of chaos replacing the multipolar scheme of things that has been all too commonly hoped for.
For European decision-makers — as far as both politics and the economy are concerned — it is vital to rethink their relationship with China in the coming years and take into consideration both the economic slowdown associated with control, and the global geopolitical risks attached to chaos.