China’s current economy is far removed from the powerhouse status that saw double-digit growth before to 2013. Even worse, the country is mired in a myriad of problems beyond economic challenges.
Aside from a slow quarterly GDP growth at rates not seen since the global financial crisis, the country also faces unabated levels of debt; a troubled stock market that saw the Shanghai Composite Index become the world’s worst performing major index in 2018; and large-scale unemployment.
The ongoing Sino-U.S. trade war has also taken a toll on the economy. The trade dispute isn’t likely to be resolved in the short term, and repercussions such as a reduction in export orders would likely persist in the foreseeable future.
The trade war also inadvertently led to an unexpected problem. China decided to enact retaliatory tariffs on U.S. pork, instead buying pork products from Russia. Scientists have traced the current outbreak of African swine fever in 23 Chinese provinces—which has killed scores of pigs in a country that is the world’s biggest pork producer—to imported Russian pork.
Politically, Chinese leader Xi Jinping is also facing pressure within the Chinese Communist Party. Sources have told Reuters and the Wall Street Journal that some senior officials have qualms about how Xi handled foreign policy and domestic development plans. For instance, China had to tone down mentions of its industrial policy “Made in China 2025,” designed to propel China into becoming a global leader in advanced technology, after the policy drew criticism in the West. Chinese officials blamed the government for pushing the policy so forcefully.
To diverting Chinese citizens’ attention away from domestic problems, the Chinese regime recently decided to resort to its old playbook and draw focus on a polarized event—more specifically, inciting nationalist sentiment.
Such diversion took place on Jan. 2, when Xi gave a speech on cross-strait relations. He urged those seeking Taiwan independence to give up their plans, while extolling the benefits of the “one country, two systems” model, currently in place in Hong Kong—which is considered a special administrative region of China.
“One country, two systems” is the basis of which Britain agreed to hand over the rule of Hong Kong back to China after more than 100 years of colonial rule, given that the model promised political and economic autonomy to the city.
Xi’s speech quickly drew rebuke from Taiwan’s President Tsai Ing-wen, as well as lawmakers from two major political parties in Taiwan: the Kuomintang (KMT), which has a Beijing-friendly platform, and the Democratic Progressive Party (DPP), which has historically advocated for formal independence.
The diversionary call seems like a desperate move at a time when the foundation of the Chinese regime’s legitimacy — the strength of its economy — is in question
Mr. Hu, a scholar on cross-straits relations living in coastal Zhejiang Province, said Xi’s remark was intended to incite “anti-American” sentiment to divert attention away from the facts that the Chinese economy is in a poor state, in a recent interview with Radio Free Asia (RFA).
“[What Xi said] is for domestic consumption, to show off a tough self-image,” Hu, who is identified by surname only, said. “Things have been this way in China for a long time; the tougher your talk, the more patriotic it makes you look.”
This is not the first time that Beijing has intentionally employed such a diversion. In 2012, there were signs that Chinese authorities deliberately organized anti-Japan protests in China, after Japan announced that it would nationalize the Senkaku Islands, a small chain of islets in the East China Sea whose ownership is claimed by Japan, China, and Taiwan.
One of the signs of establishment manipulation was that a protest leader was found to be wearing a bulletproof vest and a police-issued earpiece. Additionally, local police in many cities kept protestors in some semblance of order, as opposed to crushing them with violence as Chinese police usually do in the face of any protest perceived as anti-government.
That same year, the Chinese regime was mired in an internal crisis of political power struggles as the Communist Party selected Xi Jinping as its new leader in the 18th National Congress in November 2012.
One of the key political developments at the time involved Bo Xilai, the former Chinese Politburo member and party chief in China’s megacity of Chongqing, saw his fall from China’s political ladder—dismissed as Chongqing party chief in March, suspension from his Politburo post in April, and expulsion from the CCP in September. Before his downfall, Bo was tipped as a candidate for China’s highest political office. In September 2013, Bo was sentenced to life in prison for bribery, embezzlement and abuse of power.
Bo also conspired with Zhou Yongkang, the former security chief in China, to carry out a political coup and usurp the incoming Xi. The attempt failed and Xi assumed leadership as planned.