The Chinese People May No Longer Be Fooled by “Freedom in Exchange for Prosperity” write Yan Yu and Jianli Yang.
The sudden premature death of China’s former premier Li Keqiang has sparked widespread speculation about a brutal power struggle within the upper echelons of the Chinese Communist Party (CCP) that may have led to his demise. Simultaneously, people are expressing their dissatisfaction with the paramount leader Xi Jinping by fondly remembering the former premier who was not always in alignment with Xi Jinping’s policies. In fact, during Li Keqiang’s ten-year tenure as the second-in-command under Xi Jinping, China witnessed significant setbacks in politics, economics, and human rights. His legacy is unremarkable. People’s nostalgia for him is primarily focused on a blunt statement he made in 2020–when Xi Jinping was touting his “poverty alleviation” achievements, “China still has six hundred million people with a monthly income of less than 1,000 yuan ($150).” This reveals the general mentality of the people. Indeed, with China’s glorious era of rapid economic growth being over for the foreseeable future, (relatively low growth, sometimes even punctuated by political interference, will be the norm), people may no longer buy into “freedom in exchange for prosperity”.
This mentality has significant implications for China. The 1989 Tiananmen Square massacre almost completely eroded the legitimacy of the Chinese Communist Party’s (CCP’s) rule. However, the CCP managed not only to stabilize its position, but even to strengthen it, by relying on three main pillars. The first pillar is a consistent practice of repressive rule, while the other two are the most important sources of the CCP’s political legitimacy in the post-Tiananmen era: rapid economic development (performance-induced legitimacy) and nationalism. Of these, rapid economic development played the most crucial role, as the argument for nationalism also relied heavily on a thriving economy.
The legitimacy derived from rapid economic growth can be viewed from another perspective: under the widespread fear and political cynicism resulting from the Tiananmen Square massacre, a tacit bargain was struck between the Chinese people (especially the elite) and the CCP regime: freedom in exchange for prosperity. Until recently, despite constant challenges, this agreement was largely honored as long as China’s economy was on an upward trajectory.
Today, that tacit bargain is unraveling, and Chinese President Xi Jinping’s main source of political legitimacy is waning. In retrospect, Xi may have been aware of this problem from the beginning of his tenure. When he took office in 2013, the Chinese economy was already showing signs of decline. So, he significantly increased the promotion of nationalism, using slogans such as the “Chinese Dream” and the “Great Rejuvenation of the Chinese Nation” to bolster the nationalistic pillar of his legitimacy. At the same time, driven by greater political ambition, ideological fervour, and a desire to prevent political instability stemming from economic turbulence, Xi quickly implemented sweeping political repression and control measures.
A prominent example came in July 2015, when China experienced its largest stock market crash to date. In response, Xi rounded up scores of human rights lawyers and activists to prevent social upheaval in the wake of economic turmoil, dealing a devastating blow to civil society. In all, more than 300 lawyers and activists were interrogated, detained, or formally arrested in what became known as the “709 Crackdown” (the name derives from the fact that the mass arrests began on July 9 of that year).
Obsessed with security, Xi has steadily increased the CCP’s use of nationalism, not only to suppress domestic minority groups (an internal expression of nationalism), but also to intimidate Taiwan and assert China’s geopolitical dominance, particularly in the South China Sea, and to compete with the United States. The outbreak of the COVID-19 pandemic in early 2020 further fueled Xi’s nationalism and helped him weather the initial storm. By the CCP’s centennial in 2021, Chinese nationalism had reached new heights, with a sense of pride and a narrative that “the East is rising and the West declining” and that “Mao Zedong made China stand up, Deng Xiaoping made it prosperous, and Xi Jinping is making it strong.”
At the same time, Xi became increasingly uneasy about private companies (such as Ant Group and Didi) and entrepreneurs (such as Jack Ma and Bao Fan) that have significant economic resources and complex economic interests intertwined with the bureaucratic system and the international community. Seeing them as a potential threat to his regime, he initiated a series of measures to suppress, control, and deprive these entities of their power.
The economic challenges that many expected to ease after the pandemic subsided have not materialized, and Xi’s global ambitions have put the world on high alert. The United States and its allies have taken steps to counter and contain China in a number of areas, further exacerbating China’s economic woes. The fundamental pillar established in the post-Tiananmen era (namely, the ability of Chinese entrepreneurs and firms to achieve economic prosperity without fear of heavy-handed intimidation or repression by the CCP) is now in jeopardy, and it is clear that the era of trading freedom for prosperity is no longer sustainable.
This poses an unprecedented challenge to the security of Xi’s regime, a fact that he is well aware of and takes seriously. In recent months, Xi has sought to restore the confidence of both domestic and foreign investors in China. He has implemented several market-support policies, but their effectiveness has been limited. This is partly because Xi’s policy agenda has already been largely revealed, making it difficult to gain the trust of domestic and international stakeholders. Furthermore, wary of the security of his own emperor-like rule, Xi is too paranoid to relax his grip on society and external defenses. Measures such as the “anti-spying campaign” have deepened distrust in the market and among entrepreneurs.
Perhaps Xi has realsed that rebuilding the “legitimacy” pillar of rapid economic growth is a distant and uncertain goal. He must rely more on repression and nationalism to maintain the security of his regime. But his assertive approach on the international stage has not only failed to yield results, it has even been counterproductive. As a result, Xi has turned to cultivating nationalism at home. In June, for example, a draft “Patriotic Education Law” was introduced to codify the definition of patriotism. In August, a nationwide anti-spying campaign was launched, followed in September by a revision of the “Public Security Administration Punishment Law,” which criminalises offenses such as “hurting the feelings of the Chinese nation,” subject to arbitrary interpretation. These nationalistic policies provide convenient tools for the CCP government’s political repression, as dissent can easily be labeled as espionage or hurting the feelings of the Chinese nation.
Still Xi remains concerned. He feels the need to sap the political energy of an increasingly sceptical Chinese population that no longer believes that forfeiting personal freedoms will lead to prosperity. In this regard, he has taken a page from Mao Zedong’s playbook, adopting Mao’s tactics of inciting the masses to turn against each other. Xi has promoted a nationwide campaign to expose spies and other bad elements, encouraging individuals, companies, universities, and the public to report on each other. More recently, he has heavily promoted Mao’s 1963 “Maple Bridge Experience,” which basically shifted the punishment of class struggle targets from legal proceedings to mass mobilization—in essence, turning people against each other. Xi hopes that mutual surveillance and an eternal sense of personal danger among the people will protect his power.
However, in terms of charisma, Xi pales in comparison to Mao, and this is another fatal flaw for Xi. Combined with a lack of legitimacy based on merit and performance, no matter how much he tries to rally the people, including his own bureaucrats, they cannot truly trust and support him the way they supported Mao during his reign. The Chinese people today, including the bureaucrats, are not the same as in the Mao era. Fearing the oppression of Xi and the CCP, they choose to lie down.
In the early 1980s, when China began its reform and opening-up policy, Deng Xiaoping famously said, “Cross the river by feeling the stones.” Unexpectedly, several generations of CCP leaders have been feeling those stones, but instead of crossing the river, China finds itself stuck in a muddy quagmire with no clear direction forward. The same is true for Xi himself. It remains to be seen if the death of Li Keqiang will trigger any uproar for change.
The Author, Jianli Yang is the founder and president of Citizen Power Initiatives and author of For Us, The Living: A Journey to Shine the Light on TruthandIt’s Time for a Values-Based “Economic NATO”. His co-author Yan Yu is a public intellectual of China.