Politics
Comment: At 75, China may unwittingly embark on a path it is trying to avoid
China's remarkable economic rise, which for decades underpinned the legitimacy of the Communist Party, is now showing signs of strain. A confluence of slowing growth factors, a housing crisis, growing local government debt and a rapidly aging population has created a perfect storm.
The data is revealing: retail sales grew by just 3.7 percent in the first half of 2024, while real estate investments fell by more than 10 percent. Local governments, burdened by billions in hidden debt, are struggling to maintain basic services. Foreign investors, once eager to capitalize on Chinese growth, are withdrawing, increasingly wary of ideological policies.
IDEOLOGICAL PURITY HAS A COST
Mr. Xi's response to these economic pressures highlights his overall ideological approach.
One of the main lessons of the collapse of the Soviet Union, frequently discussed in Chinese academic circles, is that ideological erosion, not just economic weakness, led to the disintegration of the Soviet Union. For Mr. Xi, the breakdown of ideological discipline, which began with Nikita Khrushchev's denunciation of Joseph Stalin in 1956, marked the beginning of the fall of the Soviet regime.
This conviction explains why maintaining strict ideological control, notably through the promotion of Xi Jinping Thought, remains at the heart of his governance strategy. However, this focus on ideological purity comes at a price.
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