China’s Looming Challenges by CARL MINZNER From hosting the Winter Olympics to containing a unequal societies on earth. And their economy has become pandemic that has crippled other nations around the globe, it severely distorted by Beijing’s addiction to state-owned might seem that China is on top of the world. Indeed, this is enterprises as a tool to control growth, and infrastructure precisely the image Xi Jinping seeks to project – both at home development as the fuel to drive it. and abroad. Demographically, China is entering an era of rapid But beneath the surface, China faces serious problems. aging. Just like its East Asian neighbors, China’s birth rates Politically, China is atrophying. The reform era is over. are plunging to among the lowest in the world. China’s Key elements that underlay working age population peaked China’s post-1978 boom – a in 2011. It has steadily declined more relaxed grip by Party since. The same will soon be authorities, space for technocratic true for the population at large, governance, openness towards perhaps as early as next year. private enterprise – are giving The percentage of the population way. Under Xi, China is sliding over 65 years old will surge, from back towards single-man rule, roughly 12% now to around a stifling ideological orthodoxy, third by mid-century. Hard and with Maoist controls over state painful choices lie ahead – raising and society alike. retirement ages, cutting pensions, This is not a recipe for addressing labor shortages, success. The last time China and providing effective care to downed this particular cocktail, hundreds of millions of elderly in the 1950s and 1960s, it resulted citizens, many of whom are in decades of instability and locked in rural poverty. erratic policymaking. Space for None of these have easy meaningful discussion vanished. solutions. All will hobble China’s Channels of information to 21st century rise. Carl Minzner the top shriveled. Yes-men Naturally, Beijing’s proliferated. Potential successors leaders aren’t dumb. They rose, fell … and were beaten openly recognize the latter two Economically, China’s go-go to death (Liu Shaoqi), or died challenges. And China does years are over. Annual 10% in mysterious plane crashes not lack for impressively titled (Lin Biao). Grandiose visions policies and proposals to address GDP growth rates are a thing embraced by an aging great leader them. Back in 2013, observers of the past. And Beijing faces and enthusiastically pushed by swooned as Party declared that the urgent need to address a sycophantic underlings spun out the market would play a “decisive into catastrophic economic failure role” in future reform efforts. host of problems that have (as with the Great Leap Forward) In 2021, markets trembled accumulated during the or horrific political strife (such as — and the private tutoring the Cultural Revolution). industry imploded — as Beijing boom era. Economically, China’s golaunched a blitz to implement go years are over. Annual 10% Xi’s “common prosperity” drive GDP growth rates are a thing of the past. Ahead lies an era aimed at tackling social inequalities and barriers discouraging of much slower growth. And Beijing faces the urgent need to parents from having children. address a host of problems that have accumulated during the But China’s own political realities increasingly undermine boom era. A yawning gap exists between haves and have-nots such efforts. Beijing’s reflexive desire for central control has that puts China alongside the United States as one of the most systematically stymied meaningful economic reform over RIPON FORUM February 2022
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