Introduction: Unlocking anti-fragile China: How Xi reinforces the party state for global leadership
As the CCP celebrates its 100th anniversary, it presents itself as a political goliath brimming with pride and ambition. China’s leaders are convinced that the governance model of the party state is proving itself as the superior political system. “At the same time, the evolving party state is aware of the systemic fault lines that weaken its power. Institutional reforms initiated under Xi Jinping are meant to address governance shortcomings by employing the CCP’s ‘power tools’ of political centralization, mobilization and control,” writes Nis Grünberg.
Chapter 1: Party-state capitalism under Xi: integrating political control and economic efficiency
To steer the forces of economic liberalization, globalization and marketization, the CCP is turning China’s decentralized state capitalism into a “party-state capitalist” model. MERICS Senior Analyst Nis Grünberg explores this model, which is characterized by centralized leadership, a hybrid economy that blends market capitalism with top-down, macro-economic development plans, and private and public economic actors working with or alongside each other in various constellations.
Grünberg concludes: “China’s current direction of travel is clearly towards a business environment in which CCP leadership and norms point the way.”
Chapter 2: The CCP in 2021: smart governance, cyber sovereignty, and tech supremacy
Digitalization has become a crucial element in the CCP’s governance approach. To remain at the vanguard of (and not just responding to) social and political development, CCP leaders are advancing digitalization forcefully throughout the system. Digitalization serves both better governance and public service, but also enhances the party state’s surveillance and monitoring capabilities.
Katja Drinhausen and John Lee: “A key characteristic of China’s growing surveillance state is how it connects online and long-established offline capacities in monitoring and policy enforcement.”
Chapter 3: China’s new international paradigm: security first
Since Xi Jinping came to power, China has adopted a multi-faceted and all-encompassing approach to national security. This approach is intimately linked to the party’s and the system’s stability and survival. All matters are seen though a security prism: From trade ties with other countries to China’s global image and reputation. MERICS Senior Analyst Helena Legarda describes how the party takes forceful preemptive action against perceived threats to its rule, pursuing the extraterritorial application of Chinese laws and trying to enforce formerly domestic red lines overseas.
Legarda: “Other countries must be prepared to deal with a Chinese leadership that will respond forcefully to any perceived criticism or attack against its interests.”
Outlook: Systemic competition on new terms – what a crisis-driven, globally ascending party state means for European stakeholders
In the final chapter, MERICS Executive Director Mikko Huotari analyzes what a globally ascending, but also crisis-driven party state means for European stakeholders. He argues that the world needs to be prepared for a China that engages in a new kind of competition with democratic systems. Under conditions of deep interdependence and global connectivity Beijing sees itself competing for sources of political robustness and economic stability, building up effective state capacity and dealing with what it perceives as existential global risks. Read more
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