China Tires of ‘Being China for a Day’
By Joseph C. Sternberg, June 2, 2022, WSJ

Dynamic zero-Covid might have been a survivable disaster for
China except for everything else. Mr. Xi has been attempting
to consolidate political control over the economy by suppressing
the productive private sector. Mr. Xi’s single-party (and,
increasingly, single-man) rule can’t tolerate the emergence of
flamboyant and popular rivals—which is what in particular China’s
crop of charismatic tech executives were in danger of becoming.

A special subset of this economic problem concerns the property
market. Mr. Xi is in the middle of a major overhaul of China’s
overheated real-estate industry. Beijing had little choice but
to deflate a market bloated by more than a decade of credit-driven
economic stimulus. But the economic and political consequences of
this property shake-up have proved difficult to control. An early
battle was to reassure would-be homeowners that their down payments
were safe and small-time suppliers that their invoices would be
paid before social unrest could develop. Beijing has dodged that
bullet, only to face the prospect of a massive fiscal crisis among
all the provincial and local governments dependent on booming
property prices for their revenues.

And so back to Mr. Xi. His primary political project this year is
to secure re-election in October as China’s leader for a precedent-
busting third five-year term. He’s all but certain to succeed in
his aim. Which will make China’s economic woes all the worse, and
not only because Mr. Xi is the author of so many of them.

China’s converging economic disasters arise from a series of bad
policy trade-offs and gambles. The obvious solution is to change
course, and even Mr. Xi seems to recognize this to an extent:
Witness recent efforts to sweet talk the private tech industry
into booming again, or a bunch of belated policy supports for
private companies such as looser credit and tax breaks. The
trouble is that no one believes Mr. Xi. A market isn’t something
one can turn on or off at will. It’s partly an exercise in trust
as political leaders must persuade everyone in the economy that a
policy change is here to stay.

Losing an election would help.

It’s a pattern familiar across the democratic world. Not only does
an election turn bring in new leadership with new ideas, but the
fact of an electoral mandate for those policies reassures households, businesses and investors that the times really are changing. Even if
the big cheese stays in office—as President Biden will do if Democrats
get shellacked in November—an electoral defeat offers plausible cover
for a policy pivot, as President Clinton discovered after 1994.

China’s great economic weakness is the lack of a political
mechanism to bless or forgive policy shifts. For many years, a
silly line of media commentary held the West should aspire to be
“China for a day” in order to emulate an autocrat’s capacity to
Get Things Done. Mr. Xi and his Communist Party will never admit it,
but they’d now be a lot better off if they could be “America for a day” and allow an election to vent public frustration with their rule—while giving them the credibility they need to change course.

https://www.wsj.com/articles/china-tires-of-being-china-for-a-day-xi-jinping-economy-lockdowns-beijing-supression-autocrat-11654184447

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