Will Xi Jinping’s Global Ambitions for China Succeed?

>> Elizabeth Economy: So finally, is Xi Jinping's China likely to succeed? I think China is facing a number of challenges, and the challenges are growing. First, right now, the Chinese economy is slowing down, and part of that is due to the zero COVID, sort of the implementation of its zero COVID strategy.

So China has come out to say that it's going to miss its 5.5% growth target for the year. Economists are basically saying it's probably gonna be someplace between and 2%, maybe, maybe 3%, because China will probably revert to investing, again, to try to boost the economy. But we've seen right now in Chinese cities, when they have the lockdowns, you can't even get a truck to operate, to move from one place to another place, even within the same city.

So huge supply chain disruptions, you've had drops in consumption as a result. There was recently an article that pointed out that in Shanghai, when it was under lockdown, there was not a single car that was purchased. So ongoing real estate crisis. There have been a number of major defaults from Chinese real estate companies.

China right now, in some parts of the country, people are boycotting their mortgages for apartments that haven't been completed. By one estimate, there are gonna be about 50 million apartments that are gonna be empty, that are gonna be brought online over the next year. And the real estate sector matters in China, because when you take into account all the different parts of it.

So from sourcing of raw materials to the construction to the people that are involved in buying and selling, it comes to about 25% of China's GDP. So it's quite significant. We had the crackdown on the private sector over the past few years. Again, this is private sector in China.

Companies like Alibaba or Tencent are among the most successful globally, the most efficient. Private sector employs by far, offers by far the most new jobs. And yet Xi Jinping is cracking down on this, in part for regulatory reasons, but also for political reasons. Basically, any area where you're dealing with the flow of information is an area that he wants to have greater state control.

And you now have youth unemployment at 19.9%, I think the highest it's been since they started tracking it. And then, of course, there are longer term challenges, like demographics and a pension system that the Chinese Academy of Social Sciences estimates will be insolvent by 2035. So a slowing of the chinese economy and an unwillingness of Xi Jinping to move away from what has been a focus on the state economy.

Greater state control, a statist approach back to the path of economic reform and opening up. A second, what I would call bucket of challenges, relate to the polarization of chinese society. And we often think about our own society, correctly, as highly polarized. But I think chinese society is equally polarized.

It's just not as evident, and it's polarized along ethnic lines. So if you stop to consider what China is doing not only to the Uyghur Muslims in Xinjiang, but also to inner Mongolians and Tibetans. Basically trying to take away sort of their culture and their religion, it's polarized along gender lines.

I have to say one of the most shocking things that I read in the past, probably three or so years about China is that under Xi Jinping, the World Economic Forum does a ranking of women's access to the political system, the economy, the health system, and educational system.

And since 2013, right, she came to power at the end of 2012. Since 2013, China's ranking out of 144 countries has fallen from 69th to 107th. There is an enormous amount of online hate directed against women, and in particular, against feminists. And there's one woman among the top 25 members of the Chinese leadership in the Politburo, and in the top 200 odd members of the central committee, women represent about 4%.

Economic inequality, so China has more billionaires than any country in the world, but also has an estimated 600 million people living on $150 a month. And there's great work by the professor here, Scott Rizzell, who's studied China's rural economy for more than two decades, that demonstrates it's not just about what they're earning today.

It's about their future earning potential, their lack of access to education. So many children in rural China don't go to complete high school. Some are shunted off to vocational schools. But even that vocational education is not preparing them to enter sort of the 21st century economy. And so you're creating a kind of permanent underclass within rural China.

And then finally, I think there's polarization between what you call the bureaucratic class and the creative class in China. So for anybody whose livelihood has depended on coloring outside the lines or thinking outside the box, whether you're teaching in a university or you're a tech entrepreneur or an artist of some sort, the Xi period has been incredibly difficult.

Because everything is about constraining the range of ideas that is accepted. So I think this is another. So what does all this polarization mean? I think it means that you have a significant portion of your population that is not engaged politically in the system and that is not engaged economically in the system.

And I think over the long term, that is a recipe for not only a drag on the economy, but also for significant social unrest. And then finally, I think the last challenge are the sort of growing international headwinds. And I think there's real pushback within the international community now against Xi Jinping's approach.

First we saw during COVID the Wolf Warrior diplomacy, the disinformation. The popular opinion polls globally reflected a very significant drop in sort of levels of trust of Xi Jinping personally and or any sort of desire to have China lead. You may recall that as the Trump administration was taking the United States out of leadership positions or out of membership of many international organizations and arrangements, there was a lot of talk about China stepping up to replace the United States.

That did not happen. China's tacit support for the Russian invasion of Ukraine, I think, has certainly caused Europe to harden its views on China. The initiatives that China announces often fall short, right, because there's international backlash. So China predicted, set out to have 1000 Confucius institutes by 2020.

Instead, it had about 540 or so, righ, because there ended up being a lot of pushback against these Confucius institutes, for reasons I'm happy to go into if people are interested. Wang Yi, the foreign minister, just traveled out to the Pacific islands to get them to sign on to a sort of security pact with China, broadly defined as having a Chinese police training efforts in all of these countries.

And the Pacific islands refused to sign on to this. This is a huge setback for Wang Yi. If there's one thing that China has done well, it's to establish these China engagement with all the countries in Africa or with all the countries in central and southeastern Europe or all the countries in Latin America.

And even as China's called for the dissolution of the US led alliance system, instead, what you've had is a real bolstering of that system. In part because of China, in part because of Russia, but even a new regional security arrangement in the Asia Pacific, Aukus, right? Australia, the UK, and the United States.

So China's ambition is great, I think its strategy is robust and powerful and difficult to counter, but it is creating its own type of backlash. And I think what this means for US policy, and I'll end here, is that it's important for us not only to respond to China's ambition.

To what China says it's going to do, what China sort of sets out to do, which is the way I think we typically respond to things, but also to take the time to look at what is actually transpiring on the ground. Where is China actually succeeding? Where is it falling short?

Because otherwise, if all we do is respond to that ambition, I think we're likely to misdirect our resources, which are, in any case, I think, not as great as those of China.