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Is the Chinese dragon losing its puff?

Peter Hartcher

While Australia's government argues over whether to join a China-sponsored infrastructure fund, a larger debate has started on a much grander question – can China's ruling regime survive?

The collapse of the Chinese Communist Party has been predicted many times before. But never by David Shambaugh, an eminent US Sinologist of some 40 years' standing. That changed last week when he wrote a much-discussed essay in the Wall Street Journal titled "The Coming Chinese Crackup".

Endgame: The collapse of the Chinese Communist Party has been predicted many times before.
Endgame: The collapse of the Chinese Communist Party has been predicted many times before. Photo: John Shakespeare

"The endgame of Chinese communist rule has now begun," wrote the professor of political science at George Washington University. "Its demise is likely to be protracted, messy and violent."

China under the Communist Party has been described as history's most successful dictatorship. China is not just a rising power: it has risen. While average income per person in the US grew fourfold from 1980 to 2013, and sixfold in Australia in the same years, in China it burgeoned by a factor of 35, measured in current US dollar terms, according to the World Bank.

China today is the second biggest economy and military spender on the planet. The Communist Party regime is now in its 66th year.

So where does Shambaugh see evidence of imminent collapse? He lists five "telling indications of the regime's vulnerability".

First is that "China's economic elites have one foot out the door, and they are ready to flee en masse if the system really begins to crumble". He cites a survey of 393 millionaires and billionaires by Shanghai's Hurun Research Institute; 64 per cent said that they were emigrating, or planning to do so.

Second is Xi's harsh political repression: "A more secure and confident government would not institute such a severe crackdown. It is a symptom of the party leadership's deep anxiety and insecurity".

Third is the hollowness of official belief in Xi's doctrines. Officials are only going through the motions, he says. He recalls sitting through a conference on Xi's call for a "China Dream" where it was "evident that the propaganda had lost its power". Demand for a pamphlet by Xi was so feeble at the Central Party School bookshop that the sales staff were giving it away.

Fourth, Shambaugh says, corruption runs deep and will outlive Xi's anti-corruption purge, which will succeed only in enraging powerful interests.

Finally, the economy "for all the Western views of it as an unstoppable juggernaut is stuck in a series of systemic traps from which there is no easy exit," he says. Xi's attempt to break the traps, his economic reform plan, is encountering stiff internal resistance.

The exact manner and timing of collapse, says Shambaugh, is impossible to predict.

Predicting the demise of China's regime is not quite as startling as it might seem. In some ways it's entirely routine.

The blindness of the West to the imminent collapse of the Soviet Union was a chastening experience. Analysts since have been hyperalert to a Chinese Communist downfall.

Hundreds of supposed seers and Chinawatchers have cried wolf in the past quarter-century, falling into embarrassed silence when their phantom wolves are consumed by the rampaging Chinese dragon. This church of false prophets even has a name – "collapsists".

Nor is it just a Western thing. As a historian of China, director of the ANU's Australian Centre on China in the World, Geremie Barme, points out: "The Communists themselves speculate internally about whether the party will collapse. They speculate about it constantly."

No party can rule forever, anywhere. The big questions are exactly when and exactly how the regime will collapse. And David Shambaugh himself says he cannot answer either.

The Soviet collapse was, at core, a crisis of confidence. The Communist party was not challenged by another party, by a coup or by an uprising. The party yielded much of its power because its leadership had lost the self-belief and the will to go on.

China's Xi Jinping may have many deficits, but a deficit of confidence is not one of them. "Confidence is rising, not falling," says Barme. The well-regarded China economist, Arthur Kroeber, concurs: "Xi Jinping's government is not weak and desperate, but forceful and adaptable."

Kroeber adds a fundamental consideration: "The forces that might push for systemic political change are far weaker than the Party."

There is a major economic crunch beginning, certainly. But the Communist regime has prevailed through much worse. There is no sign that the instruments of coercion are wilting.

Barme, a longstanding acquaintance of Shambaugh, laughs at his anecdotes of hollowing faith among officialdom: "Every political conference I've been to in China in 42 years, the officials are always bored. Everyone's bored. The leader's works never sell. They always have to give them away."

Barme suspects that Shambaugh's conversion into the church of "collapsism" tells us more about today's America than it does about China.

"If this were written by a Spanish author or a Greek author or an Italian author, they'd say, 'Yes, we have capital flight, corruption, a lack of reform, massive popular dissent – sounds like a normal day," Barme argues.

"However, we are looking at an American writing about Chinese collapse amid huge anxiety about US politics and its future. I agree that Xi's China is uglier, more repressive and narrow, yet it's more confident, more articulate and more focused than at any time since Mao Zedong. That's why an American is worried."

Peter Hartcher is the international editor.

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