The Economic Consequences of Xi Jinping

In the aftermath of the 20th National Congress of the Chinese Communist Party, Xi Jinping’s principal focus will be on state and national security, while an entirely new economic- and financial-policy team, with little experience, will take charge of China’s troubled economy. Its members will have to manage several systemic problems – a debt mountain, a property bust, a rapidly ageing population, zero-COVID policies – and develop a viable new economic-development model. This would be a demanding agenda anywhere, but Xi’s China has to tackle it guided by an ever more devoutly Leninist approach to economic management, industrial policy and governance, at a time when China faces the most hostile external environment it has known since Mao Zedong, as exemplified by foreign decoupling. Although Xi’s China is capable of important accomplishments in science and technology, and of flexing its diplomatic and military muscles in defence of its interests, China’s politics may be much less capable of fixing the country’s systemic economic and financial weaknesses. The consequences of Xi Jinping’s economic programme, including an emphasis on self-reliance, promise to extend beyond China’s borders to foreign actors and countries that once benefited from its economic rise.