SOON AFTER he took power in 2012, Xi Jinping urged caution about China’s prospects. “The further our cause advances,” he told fellow leaders, “the more new situations and problems will arise, the more risks and challenges we will face and the more unforeseen events we will encounter.” As China’s economy flounders and social tensions increase—and with Donald Trump about to enter the White House—the coming year will be full of the kind of difficulties Mr Xi feared.As ever, the country’s murky politics may throw up surprises, too.
The possibility of Trump-induced tumult in the relationship between the world’s two strongest powers is a big and immediate worry. Decisions made by America’s next president and his mostly China-hawkish team will affect matters that Mr Xi regards as critically linked to the Communist Party’s grip on power. First is the economy. Mr Trump has threatened to impose a 60% tariff on imports from China, on top of an immediate 10% hike should China fail to curb exports to America of fentanyl, a potent synthetic opioid that kills tens of thousands of Americans annually. Some analysts say these increases could knock more than two percentage points off China’s economic growth.
There is much uncertainty about how fast the tariffs will be raised and whether Mr Trump is really determined to push them so high. But if imposed as advertised, they could deal a hefty blow to China at a time when the country is struggling to revive the badly battered confidence of households and businesses amid a property-market slump and scarcity of jobs.
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