Xiconomic Fracture of The Chinese Dream

By Lt Gen P R Shankar (Retd)

Published in The Indian Express @ Not on the agenda of the 20th Party Congress in Beijing: How Xiconomics is wrecking the Chinese dream

As Xi Jinping prepares to climb to greater heights of political power at the CCP congress, he and the party must contend with multiple geopolitical and economic issues, a shrinking population and increasingly disillusioned youth

Written by P R Shankar
Updated: October 15, 2022 9:49:44 pm

Much ado will be made of revenge on the “century of humiliation” through the “rejuvenation of the Chinese nation” to achieve the “Chinese Dream” as enunciated in Xi Jinping Thought. (AP)

Xi Jinping is ready for self-anointment as the uncrowned king of China for life. His merry band of Communists will sound the fanfare during the forthcoming 20th Party Congress. Much ado will be made of revenge on the “century of humiliation” through the “rejuvenation of the Chinese nation” to achieve the “Chinese Dream” as enunciated in Xi Jinping Thought. Major achievements under his exalted leadership will be showcased. He will shout from the rooftop that the People’s Republic of China (PRC) will be a strong, democratic, civilised, harmonious and modern socialist country and the foremost global power which dominates great power relations by 2049. He will grandstand that despite major challenges and irrespective of the perils of the last mile, a Sino-centric order will be established under his helmsmanship. He and the Chinese Communist Party (CCP) will portray the delivery of the “Chinese dream” to the people through the greatest military on earth. A vision will be sold in which “Socialism with Chinese characteristics” and state control of institutions makes China a strong economic power along with Xi’s “anti-corruption campaigns”, “common prosperity”, “victory over Covid”, “a new model of win-win in international cooperation” and “dual circulation”.

“Xiconomics” will prevail over the current issues facing China. These will be painted as transitory problems which will be overcome as the middle kingdom emerges as the ordained superpower on earth.In Premium Now |20th Communist Party Congress: China’s tightrope walk

As Xi Jinping ascends new political heights, the Chinese economy is wracked by his zero Covid policy, real estate crisis, cash-strapped local governments, big tech emasculation, supply chain relocation and global decoupling. Geopolitical and economic headwinds from the Ukraine war and deteriorating relations with the USA, EU nations, India, Japan, South Korea and Australia compound China’s woes. Military assertions against India, Taiwan, Xinjiang and Hong Kong and in the South China Sea induce global distrust of China. An unprecedented drought and the spectre of climate change casts a pall over China’s future. The days of heady investment-led economic growth crackling through debt-fuelled infrastructure, high-priced property, high-speed trains, gleaming highways, buzzing hi tech and smoothly purring manufacturing supply chains are over.

Michael Pettis in his illuminating article ‘How China Trapped Itself’ outlines three options for China’s salvation. The first option is to continue with rapid, debt-fuelled investment, by reviving the property sector and/or increasing spending on infrastructure. However this is what brought about the current situation. The second option outlined is to rebalance the economy from investment to consumption. As China ages rapidly , it refuses to consume due to decreasing productivity, a shrinking labour force, joblessness and decreasing wages. The third option is to allow growth rates to fall sharply and get absorbed by the government sector, keeping the people from being affected. Politically, this will be anathema to the CCP. The economy is destined to stagnate or decline as there are no good options for China.

If a hairline fracture exists between the surrealism of Xiconomics and the economic reality, the regression of the “people” part of the PRC portends a multiple fracture. China is experiencing the fastest demographic decline in human history with falling birth rates, rapid ageing and decreasing working population as a result of its half-a-century-old one-child policy. This irreversible phenomenon indicates that China’s population will fall below 800 million by 2100. What compounds the problem is the growing disillusionment of the youth. China’s youth unemployment has remained stubbornly high at about 20 per cent. College graduates face an uncertain future with fading opportunities. Curiously, fresh college graduates, overseas returnees and workers retrenched due to factory or corporate closures are all competing for the same jobs with reduced pay in a shrinking pie. For the youth to care for aged parents while raising their own families would be a frighteningly immense burden amid the rising cost of living and decreasing wages.Express Editorial |20th National Congress: Assessing Xi’s power

Youth disillusionment came to the fore last year, when “tang ping” or “lying flat”, became a social protest movement and went mainstream in China. “Tang ping” meant just doing enough to get by. It was a movement against the unceasing work culture in China. The new buzz phrase is “bailan” or “let it rot”. “Bailan” is attitudinally giving up on a deteriorating situation. It is gaining popularity among the Chinese youth . “Tang ping” is harmless and denotes doing the bare minimum. “Bailan”, on the other hand, indicates people giving up or willing to accept far fewer outcomes. It is an exhausted mindset which clearly stems from the overly competitive communist mentality for which it is the norm to continuously try to prove oneself to be the best. The progression from a neutral “tang ping” to a corrosive “bailan” is not yet universal but widespread enough to indicate pessimism and disillusionment in China’s youth.

Interestingly, about 10-11 million youth have graduated annually from colleges in the past three years. In the same period, the number of new-borns has also been around 10-11 million annually. Both figures will decline at the same rate in years to come. It represents a huge fall in human capital. It took two generations of reform to build present-day China. It will take China less than one generation to destroy itself through Xiconomics.

Political power in any country is a derivative of economic power, which in turn is a function of the people. The reality of China is that the fizzing energy of 1.4 billion people who brought China to the doorstep of superpower status is turning into a flat, desultory, shrinking population with disillusioned youth being hounded to an undeserving fate by the ambition and greed of Xi Jinping and his communist cohorts. Their political power is set to wane and so will the geopolitical power of China. We in India need to think differently about how to deal with a fractured dragon which increasingly resembles a sick lizard as days pass.

The writer is a retired director general of artillery