Essay: Is there anything more fragile than an economy run by communists - especially one that has the cult of personality surrounding Xi Jinping?

"The underpinnings of China’s growth seem fragile from historical and analytical perspectives. Even if no crises materialize, unfavorable demographics, high debt levels, and an inefficient financial system will constrain China’s growth."^[1]

Is there anything more fragile than an economy run by communists - especially one that has the cult of personality surrounding Xi Jinping?

Question: Are Chinese vases less fragile than Xi Jinping's inept leadership?

Authoritarian regimes, like China, are strong (Various means to repress population and/or to limit other political options), but at the same time they are brittle. The former Soviet Union is an example of this principle.

In modern history, corrupt, one-party regimes are not known for their great longevity such as lasting over 100 years and China has one-party rule - namely the Chinese Communist Party.^[2] Mint News reported that "Chinese President Xi Jinping is expressing concerns about the potential collapse of the Communist Party of China (CCP) as millions worldwide are renouncing their affiliation with the party."^[3]

The Chinese Communist Party could lose power if China continues its downward path in terms of economic strength (See: Scenario of a collapse of the CCP, Taipei Times, 2023).

Chinese elite fleeing to the USA. Roman Empire elite fleeing beyond the Roman Empire's borders during the decline of the Roman Empire

See: China's decline and some Roman Empire decline parallels

Chinese elite fleeing to the USA:

"What of the new, 21st-century Chinese elite? Unnoticed, many “princelings” — progenies of the 500 families that founded the PRC in 1949 — have quietly left with their ill-begotten gains, and settled in exile, mostly in the Los Angeles area. This is not a sign of confidence in the CCP regime when the offspring of its founders have forsaken it." - Communist China: A Long March to Collapse? (Only those ignorant of its history think Communist China will survive forever. It won’t) by Dimon Liu. Center for European Policy Analysis, July 15, 2024

Roman Empire elite fleeing to beyond the Roman Empire's borders:

Roman Empire elite fleeing the Roman Empire

China's major economic crisis are signs of major deflationary pressures

Flag of China

According to Investopedia, "Deflation is not normally bad for an economy, except when it occurs in reaction to previous over-inflation."^[4] Unfortunately for China, it has economic bubbles that are bursting in relation to its real estate and stock markets which is causing much economic hardship to many Chinese. Both of these markets had values that were highly inflated relative to their actual economic value. The Empower website notes that deflation "can lead consumers to spend less now, in part because they expect prices to continue to fall; it can push businesses to lower wages or lay off employees to maintain profit levels; and it makes existing debt more expensive for many borrowers.^[5]

Presently, communist China is facing multiple crisis with the three major crisis below being signs of growing deflationary pressures on their economy:

Chinese real estate crisis (2020–present)

Chinese stock markets crisis (Since 2021, China’s stock markets have lost about $7 trillion in value.^[6])

Youth unemployment in China

It's time to be very bearish about China's long-term economy

The rising rule of communist idiocracy in China

Xi Jinping is the current General Secretary of the Communist Party of China which requires that all their members be atheists.^[7]

See: China and atheism and Atheism and communism

In 2023, Professor Minxin Pei, professor of government at Claremont McKenna College, wrote about China's dysfunctional government:

“

The bigger problem is that President Xi Jinping and his lieutenants still haven’t figured out how to dispel gloomy sentiments among Chinese entrepreneurs and foreign investors. The government’s crackdown on the tech sector and mistreatment of iconic executives such as Alibaba founder Jack Ma and real estate tycoon Ren Zhiqiang have instilled deep fears among private-sector businessmen. Many have emigrated abroad along with their wealth. A record 13,500 high-net-worth individuals are expected to leave China for safer shores this year.

If Xi can’t reverse this trend, the loss of confidence in his leadership among private entrepreneurs will depress investment and job creation. The share of private capital in China’s total investment in 2022, for example, fell to roughly 54% , the lowest in a decade.

The government can’t tackle this problem because it is the problem. In the past decade, there’s been a fundamental shift in the survival strategy and governance structure of the ruling Chinese Communist Party. The regime has prioritized political control over economic development and systematically shifted resources from the private sector to state-owned firms, mainly through industrial policy programs such as Made in China 2025.^[8]

”

On October 30, 2023, The Guardian reported: "But by all accounts, the number of uber-wealthy people in China is in decline. Of the world’s estimated 2,640 billionaires, at least 562 are thought to be in China, according to Forbes, down from 607 last year.^[9]

Videos and articles:

Beijing Signals That It Has No Idea What To Do About Its Economy, Forbes, 2024

How Xi Jinping’s authoritarianism is killing China’s economy | Business Beyond, 2024, video

The Japanification of China due to Xi Jinping, China is slipping from motion to stagnation, raising questions if it can escape the same contradictions that doomed the Soviet Union, Asia Times, 2023

China on brink: Xi's new power plot and single-man crisis sends economy into freefall, Express, 9-24-2022

Larry Kudlow: Xi Jinping has issued 'declaration of war' against capitalism

Xi Jinping is not concerned with the growth of the Chinese economy, says China expert Matt Pottinger

Chinese President Xi tightens grip on authority amid fears of a return to one-man politics

Xi Jinping In Major Line Of Fire As China's Economy Slowing Down, And Major Sectors Are Collapsing, India Today, September 2023

Countries with more freedom are more likely to experience greater economic growth long-term

Research indicates that in the long-term, non-authoritarian countries are more likely to experience greater economic growth. See: Time Under Authoritarian Rule and Economic Growth, CORI Working Paper No. 2007-02