What kind of man is Xi Jinping? It’s the most important question in the world right now.
Cold warriors want you to believe that Xi is the reincarnation of Josef Stalin, an absolute dictator bent on world domination. A lot of big investors believe this. That’s why the values of the biggest Chinese companies, the ones I call “Cloud Emperors,” have been cut in half this year.
But China’s policies toward tech aren’t extreme, not by the standards of American liberalism. Let small suppliers choose their markets? Enforce antitrust laws against predatory acquisitions? Raise taxes, so prosperity flows from the middle class out instead of from the top down? Why, yes.
It’s true Bernie Sanders would never give the state a monopoly on personal data. Even Alexandria Ocasio-Cortez wouldn’t dare limit children to an hour of screen time a day. China’s “Great Firewall” runs both ways. Western data can’t get in, and Chinese can’t get their data out. This includes financial data, as the Bitcoin ban makes it harder for capital to flee.
But Xi’s got bigger problems than anyone here imagines.
Despite being the biggest producer of solar panels and electric cars, China is still like the Cuyahoga River in Randy Newman’s song Burn On. The Evergrande Crisis, $300 billion in unpayable debt that must be wound down, is like the 2008 crisis that nearly took down the U.S. economy.
Young workers are revolting against a work culture called “996” – working 9 to 9 6 days a week. Those are the people whose support Xi is coveting. The people who grew up under a rising tide of prosperity since 1978 are no longer willing to pay the price while the economic elites have everything all to themselves. If Xi stood in an honest election, I think he’d win.
This is going to get me in trouble, but China is not communist. It’s an empire, a Mandarin system more akin to what existed for 2,000 years before westerners knew what China was. (It’s named for its first imperial dynasty, the Chin family, much like Arabia is named for the Sauds, an American ally.)
I think the imperial governing model is as obsolete as communism when technology can transform society at Internet speed. It’s the flexibility of our system, with democracy, liberty and capitalism all contending for power, that gives us the ultimate advantage. Despite wasting trillions on a Forever War, we still have the world’s dominant economy.
But that’s a case that needs to be proven. Instead of arming for a second Cold War, let’s win this one the way we won the first Cold War. With economic and social innovation. With freedom.
Wars are unhealthy for economies and other living things.
