Chinese President and Chinese Communist Party (CCP) Chairman Xi Jinping (習近平) said in a politburo speech late last month that his party must protect the “bottom line” to prevent systemic threats. The tone of his address was grave, revealing deep anxieties about China’s current state of affairs. Essentially, what he worries most about is systemic threats to China’s normal development as a country.
The US-China trade war has turned white hot: China’s export orders have plummeted, Chinese firms and enterprises are shutting up shop, and local debt risks are mounting daily, causing China’s economy to flag externally and hemorrhage internally. China’s youth unemployment is rising, consumer confidence is falling, and the real estate bubble has burst, bringing social tensions to the point of erupting.
These phenomena are all converging and brewing a recipe for a system-wide collapse.
Far more serious is that China’s foreign policy missteps are steering the country toward a Boxer Rebellion level of blind resistance, lashing out against anyone and everyone but themselves.
With the US heaping on massive, crippling tariffs and implementing containment strategies, Beijing has not only refused to pursue realistic dialogue with Washington, but is choosing to harden its resistance and sharpen its propaganda warfare. It is attempting to encourage Beijing-friendly countries of the “global south” to join China in “resisting” the US.
Xi did not get the exact welcome he was expecting on his Southeast Asia tour of Vietnam, Cambodia and Malaysia last month. On the surface, they gave him cordial and polite receptions, but diplomatic talks were hallmarked by some tacit coldness and a sense of alienation.
Southeast Asian countries are looking out for their economic best interests, and they do not want to cut out possible engagement with the US — the world’s most important economy — by being seen leaning heavily into China.
If Beijing continues to refuse to face facts or develop meaningful dialogue with Washington, while saying it “will fight to the end,” then systemic threats to the CCP will only continue.
The first to be affected would be the economy, as a collapse in the export market, with domestic demand unable to make up for export losses, triggering a sharp downturn. Mounting local government debt, along with breaches of contracts and agreements, would further aggravate China’s longstanding problem of non-performing loans in its banking sector. Together, these pressures could culminate in a financial crisis.
Second would be social tensions. Long-term youth unemployment and the collapse of the real estate market, along with rising commodity prices, would continue fanning social instability. Street protests could explode into full-blown civic action events.
Much more concerning for Xi would be the political implications. When economic issues and social upheaval present problems, if the political system’s elites and lower-level bureaucrats stop showing confidence in their system and appear to have lost control, it would shake the foundations of Xi’s political power base. It could lead to what Xi fears the most on that front: a gray rhino event, a highly probable and impactful threat that is often ignored despite visible warnings.
Xi’s call to protect the “bottom line” against systemic threats reflects the authorities’ elevated anxieties over a fracturing economy, growing social upheaval and potential political collapse.
The CCP’s obstinacy in upholding ideology is parked firmly in power struggles and incitement — not in reasonable and rational measures based on global ideals and principles.
If Beijing continues to blame all its domestic economic woes on foreign encirclement, while replacing reason and rationality with irrational, Boxer Rebellion-style paranoia, China would be pushed even further toward the abyss.
Yao is a reviewer.
Translated by Tim Smith
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