Xi Jinping Warns ‘Eastern European Upheaval and Collapse of the Soviet Union’ May Happen in China

A promotional exhibition held at the Beijing Exhibition Hall of Chinese Communist Party History on the eve of the opening of the Chinese Communist Party's annual sessions on March 3, 2023. (Greg Baker/AFP)

News Analysis

During the July 1 commemoration of the 102nd anniversary of the Chinese Communist Party (CCP), the party magazine “Qiushi” published leader Xi Jinping’s speech in which he expressed concern the CCP may suffer the same fate as the “Eastern European upheaval and collapse of the Soviet Union.”

The June 30 issue of the CCP’s magazine “Qiushi” published a speech Mr. Xi made during last year’s Central Party School’s youth training class. In that speech, Mr. Xi stated: “If the individuals we cultivate no longer uphold the principles of Marxism and communism, if they fail to champion Chinese socialism with its distinctive characteristics, then tragedies like the upheaval witnessed in Eastern Europe, the collapse of the Soviet Union, may occur!”

Mr. Xi has been worried that one day the dissolution of the CCP will happen in China.

In a January 2013 Central Committee study session, Mr. Xi referred to the Soviet Union’s disintegration as “a lesson in history.” He said: “One significant reason was the extremely fierce ideological struggle that unfolded, which involved a complete negation of Soviet history, the history of the Soviet Communist Party, the negation of figures like Lenin and Stalin, promotion of historical nihilism, and the intentional blurring of people’s thinking. This rendered party organizations at all levels ineffective, to the extent that even the military no longer operated under the party’s leadership. As a consequence, the Soviet Communist Party, a vast entity, disintegrated like a flock of birds, leading to the fragmentation of the colossal socialist country known as the Soviet Union.”

Following this speech, the CCP initiated decisive actions to eradicate what they termed “historical nihilism.” In 2016, the CCP passed a resolution to punish “words and actions” that distorted and defamed the history of the Party, the state, the military, policies, and leadership. Additionally, in 2018, the CCP enacted the “Martyrs Protection Law,” granting them the authority to suppress any speech they deemed “disrespectful” toward revolutionary heroes.

CCP Strengthens Its Control Over Society and Economy

In May of this year, Mr. Xi emphasized at a high-level meeting that the Central Committee for Financial and Economic Affairs should “continue to play a role in formulating major economic policies.” Mr. Xi aims to enhance and refine the “centralized and unified leadership” of the Party over economic matters. It is noteworthy that the Central Committee for Financial and Economic Affairs is a Party institution rather than a governmental institution.

In March of this year, the CCP announced the establishment of the Central Financial Commission, aiming to bolster the Party’s oversight of the vast $60 trillion financial industry. Furthermore, plans are underway to create the Central Science and Technology Commission to strengthen the Party’s supervision over national scientific and technological advancements.

The CCP has also intensified its control over businesses. On Sept. 15, 2020, the General Office of the CCP Central Committee issued a statement “Opinions on Strengthening the United Front Work of the Private Economy in the New Era.” This directive emphasizes the need for the United Front departments of the CCP to enhance the Party’s ideological influence and presence within private enterprises. Notably, the document calls for the United Front departments to “guide” private enterprises in improving their corporate governance structures and establishing the “Chinese-style modern enterprise system.”

In a speech delivered in 2016 regarding the “Chinese-style modern state-owned enterprise system,” Mr. Xi interpreted “Chinese-style” as integrating the Party’s leadership into all aspects of corporate governance and clarifying its legal status within these structures. Subsequently, in 2018, regulatory authorities of the CCP mandated that the establishment of Party branches become a requirement for any company listed on domestic stock exchanges.

Ye Qing, Vice Chairperson of the All-China Federation of Industry and Commerce, further elaborated on the “Chinese-style modern private enterprise system,” explaining that it entails the Party organization within the company exercising control over human resources decisions and conducting corporate audits, including monitoring internal behavior.

Scott Livingston, a researcher at the Washington-based think tank, the Center for Strategic and International Research Center, highlighted that the overall objective of the CCP seems to be ensuring that private enterprises comply with the Party and be willing to cooperate in achieving the CCP’s strategic objectives.

The Soviet Union’s Authoritarianism and Command-Style Economy Led to its Collapse

Scholars have pointed out that the CCP’s orientation toward authoritarianism and a command-style economy is reminiscent of the factors that contributed to the Soviet collapse.

Something Mr. Xi may not realize is the collapse of the Soviet Union was due to the detrimental effects of authoritarianism and a command-style economy. James Robinson, an economist and political scientist at the University of Chicago, made a prediction during a BBC program that the CCP could potentially face a decline like that of the Soviet Union.

From the 1920s through the 1970s, the Soviet Union experienced rapid economic growth under its command-style economy. The estimated average annual growth rate of the Soviet Union’s Gross National Product (GNP) stood at 5.8 percent from 1928 to 1940, 5.7 percent from 1950 to 1960, and 5.2 percent from 1960 to 1970. However, beginning in the 1970s, the Soviet Union’s economic growth underwent a significant downturn. The average annual growth rate of the GNP decelerated to 3.7 percent from 1970 to 1975 and further plummeted to 2.6 percent from 1975 to 1980.

Mr. Robinson emphasized that the Soviet Union’s economic model was unsustainable. He analyzed the intricacies of the situation, highlighting that without freedom and political power, individuals cannot fully harness their economic potential. Consequently, states that restrict citizen freedoms, especially those reliant on forced labor, are destined to fail.

Mr. Robinson claimed: “What makes a society prosperous is whether or not it’s organized to harness the talents of its people, the energies, the ideas, the creativity of its people.” The Soviet Union failed in this regard.

On July 8, Lucia Dunn, an economics professor at the Ohio State University, told The Epoch Times: “When a government tries to get control of its economy in a wide-ranging way, it usually interferes with the working of markets at many levels. Except in cases where there are clear ‘externalities’—like pollution cases—free markets are more efficient in allocating goods and services than government decrees.”

Mr. Robinson believes that people harbor similar illusions about China as they did about the Soviet Union back then. He believes that China’s economic growth will slow down and will not become the superpower as predicted.

In January of this year, China’s National Bureau of Statistics released data claiming that China’s economy grew by 3 percent in 2022, a significant slowdown from the 8.1 percent growth rate in 2021. The economic growth in 2020 was even lower, at 2.2 percent.

The CCP Turns Today’s China into Yesterday’s Soviet Union

Mr. Robinson points out that the impressive economic growth in China over the past few decades is not thanks to CCP; on the contrary, it “has been caused by CCP’s withdraw from controlling every aspect of economic life.”

In 1978, two years after Mao Zedong’s death, rural China began implementing the “household responsibility system,” which granted farmers ownership rights over their products for the first time. In 1980, Deng Xiaoping “drew a circle” in southern China, transforming the small fishing village of Shenzhen into a “Special Economic Zone” and experimenting with a free-market economy, which quickly developed into a manufacturing and shipping hub. According to Mr. Robinson, “This is not a triumph of the Communist Party, this is the Communist Party pulling itself out of society a little bit.”

However, with Mr. Xi reaffirming Party control over the economy and society, the CCP may be repeating the mistakes made by the Soviet Union.

Also interviewed on July 8 by The Epoch Times was Anders Corr, the founder of Corr Analytics and Epoch Times contributor. He said: “The CCP’s further consolidation of power over China’s economy will only lead to further impoverishment of the country. Communism has proven to be a failure in terms of economic management, as evidenced by China, the former Soviet Union, Cuba, and North Korea. When comparing these countries to Japan, Western Europe, and South Korea, the countries that have chosen market democracy almost always fare better than those under the control of communist dictators.”

Ms. Dunn argues that adopting a fascist model of economic control that allows private property is unlikely to lead to greater economic prosperity in China. Such arrangements can introduce inefficiencies, market imbalances, shortages, illegal markets, and wide price fluctuations that destabilize the economy.

In their pursuit of maximizing fiscal revenue from land, governments at various levels have sought to increase land prices. As a result, China’s real estate market has become the most expensive in the world when measured by the ratio of local property prices to per capita household income. This deliberate creation of a bubble has brought it to the brink of bursting.

Meanwhile, the excessive extraction of wealth through monopolies has resulted in household income consistently growing at a slower pace than GDP for decades, leading to long-term suppressed domestic demand. China’s proportion of private consumption to GDP remains one of the lowest among countries worldwide, standing at only 38.5 percent in 2021, compared to 70 percent in the United States and 56 percent in Japan.

A sizable portion of China’s population still lives in absolute poverty. In a speech delivered in 2020, Former Premier Li Keqiang acknowledged that approximately six hundred million Chinese individuals have a monthly income of less than 1,000 yuan ($140).

Mr. Corr emphasized that the authoritarian nature of the CCP poses a threat not only to Chinese citizens but also to neighboring countries. Consequently, the world will eventually unite in opposition to the CCP, accelerating its downfall.

Gui Di, a senior lecturer at Brunel University Business School, and Xu Chenggang, a senior fellow at the Stanford Center on China’s Economy and Institutions, co-wrote an article expressing their concerns that since 2012, due to fears of peaceful evolution and “color revolutions,” the CCP leadership has intentionally steered China’s political economy toward authoritarianism. The article highlights that the party’s leaders fail to recognize that the same problems that led to the decline of the Soviet economy now pose a threat to China.

The article states: “In the 1950s, one of the Chinese Communist Party’s most well-known slogans was ‘Today’s Soviet Union is our tomorrow.’ That tomorrow may well have arrived, with the CPC on its way to transforming today’s China into yesterday’s Soviet Union.”