Is China’s political economy facing a new era? A Stigler Center webinar explores


A panel from the Stigler Center, part of our new series on China’s Current and Future Prospects, explores the legacy of Xi Jinping, China’s global standing, and what the future holds for its economy.

Is China facing a new era in its development? The world’s second largest economy is currently experiencing a economic downturna scan government repression on Big Tech and other parts of its private sector, escalating tensions with the United States, and growing questions who will one day succeed longtime leader Xi Jinping, China’s most dominant leader since Deng Xiaoping. All of this suggests profound changes in China’s political economy.

Where is China going? Is it like some fear, towards an inevitable conflict with the United States and the West? Will Xi continue to consolidate his power over the private sector? To answer these questions and more, the Stigler Center hosts a series of conversations on China’s current situation and future prospects.

The first of these conversations, held earlier this week, featured Zhiguo He, a Fuji Bank and Heller professor of finance and Jeuck faculty member at the University of Chicago Booth School of Business; Minxin Pei, Tom and Margot Pritzker ’72 Professor of Government and George R. Roberts Scholar at Claremont McKenna College; Susan Thornton, senior researcher and guest lecturer at the Paul Tsai China Center at Yale Law School; and moderator Jamil Anderlini, editor-in-chief of Politico Europe.

“What China wants is actually quite simple,” Thornton said during the panel. “His focus is primarily on his own stability and development. What are the things that would help it and what are the things that would hinder it? It wants to keep links with other economies to gain the resources it needs for its development. He wants a peaceful and prosperous neighborhood, because he has so many borders with other countries – and they need tight internal controls, from their point of view. On top of that, China wants respect in the world. The open question is whether China thinks it needs to dominate the world militarily and economically to achieve these things.

As Xi prepares to get a most likely a third term at the upcoming Chinese Communist Party Congress in the fall, it is also carrying out a series of regulatory reforms and corporate crackdowns as part of its “common prosperity” policy. What does Xi want? Having changed China tremendously since coming to power in 2012, Pei said, Xi “wants to become not only the most powerful leader, but a leader who will stay in place for a long time, and make sure the Communist Party continues to govern. He is essentially a party man, in the sense that he has a deep emotional and ideological attachment to the idea of ​​the supremacy of the Communist Party but also, perhaps, to political immortality. He does everything as he can to ensure that party members remain loyal to the party, the party controls most aspects of life in China, and any kind of challenge to the party from inside China would in fact not be viable.

Xi, added Pei, “wants to create a new narrative in China, which would convince the Chinese people that China’s stay in the sun has arrived, [that] he elevated China to a new status in the global community. Whether he succeeded in achieving those goals, he said, is a complicated question.

As for China’s crackdown on companies like Alibaba, it’s not just a political issue, but “a very well-defined economic issue, with clearly defined benefit and cost,” He said. “What happened is that the platform economy needs to be regulated, and Xi thinks now is the right time.” China’s housing sector is going through a similar process for the same reason, he added: “Housing is a cancer for the Chinese economy. There is no better way to deal with it; it’s always ugly. But is this like the end of innovation? It is far from the truth.

You can watch the webinar here:

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