Commentary
Chinese leader Xi Jinping is facing challenges as China’s economy struggles. His efforts to tighten control and purge the military may be worsening the situation and drawing scrutiny to his authority.
Under Xi, China’s economy is grappling with unsustainable debt, a property market crisis, and weak consumer confidence. The focus on state-driven industrial growth over essential reforms has exacerbated these issues, with consumer spending playing a limited role in driving growth.
China also faces significant off-the-books local government borrowing, pushing its debt-to-GDP ratio close to 300 percent. The centralized efforts to stimulate growth have crowded out private investment and hindered innovation, favoring state-backed firms over private enterprise.
Despite Xi’s attempts to tighten control and implement military purges, China’s economy continues to decline. His policies have shifted towards a more centralized system, weakening the private sector and worsening economic vulnerabilities.
In response to economic challenges and potential trade restrictions, Xi is focusing on reducing reliance on Western technology, expanding industrial supply chains, and promoting global dependence on Chinese goods. This strategy includes a substantial stimulus package, which has increased public debt and favored state-owned enterprises over the private sector.
China’s economic situation mirrors Japan’s “Lost Decade,” marked by a downturn in the real estate sector. Chinese developers defaulting on loans and unoccupied homes resemble Japan’s housing bubble collapse, hinting at prolonged stagnation.
Consumer prices in China risk deflation, coupled with other challenges like high youth unemployment, declining investor confidence, and heavy reliance on exports, indicating the potential for prolonged economic stagnation.
Xi’s consolidation of power has allowed the CCP to prioritize political stability over economic performance, leading to a focus on sustainable growth and technological self-reliance. His anti-corruption drive within the Party aims to combat misconduct and discipline violations.
Unusual developments in China’s political and military leadership suggest potential cracks in Xi’s control, with rumors of military purges and growing dissent within the People’s Liberation Army.
The Chinese economy is slowing down, and there are increased geopolitical tensions, especially with the United States, which is putting pressure on China. President-elect Donald Trump’s return and tough policies could worsen economic challenges, weakening China’s export-driven growth model. These external pressures, along with internal struggles, risk increasing public discontent and intensifying factional rivalries within the CCP and its military.
Xi Jinping is facing growing scrutiny as he deals with mounting challenges. His ability to maintain control hinges on managing domestic factionalism, addressing economic vulnerabilities, and mitigating rising public dissatisfaction. However, the widening gap between his centralized authority and the effectiveness of governance raises concerns about political instability and potential challenges to his leadership within the CCP.
Views expressed in this article are the author’s opinions and may not reflect those of The Epoch Times.
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