Arbitrary decisions, elevated uncertainty will be endemic in Xi's China

New Delhi, Jan 7 Progress in human development has been thrown into the reverse by a global pandemic, a land war in Europe, a massive inflationary shock, and mounting climate catastrophe.

After decades of globalisation pushing unprecedented global growth and the emergence of a robust global middle class, we are now seeing a majority of the world's 8 billion people fare worse, not better, in education levels, life expectancy, economic well-being, and safety and security.

The headwinds for human development will grow in 2023, Eurasia Group said in a report on top risks for 2023, which includes China.

China, too, faces massive economic challenges, much greater than other major countries. Its economy is still expected to surpass that of the United States in GDP by 2030, but there is a growing chance it never does. And if it does, this does not herald a Chinese century as China's population halves by 2100.

Xi Jinping emerged from China's 20th Party Congress in October 2022 with a grip on power unrivaled since Mao Zedong, Eurasia Group said.

"The last time a Chinese leader had this much power to pursue such a misguided policy agenda, the result was widespread famine, economic ruin, and death. While another Cultural Revolution or Great Leap Forward is unlikely given the size of China's educated urban middle class, Xi's consolidation of power will take China at least a few steps backward this year," Eurasia Group said.

Having stacked the Communist Party's Politburo Standing Committee with his closest allies, Xi is virtually unfettered in his ability to pursue his statist and nationalist policy agenda. But with few checks and balances left to constrain him and no dissenting voices to challenge his views, Xi's ability to make big mistakes is also unrivalled, it added.

Arbitrary decisions, policy volatility, and elevated uncertainty will be endemic in Xi's China. That's a massive and underappreciated global challenge, given the unprecedented reality of a state capitalist dictatorship having such an outsized role in the global economy.

Xi has committed a series of missteps in the recent past.

"Last year we warned that China had walked itself into a zero-Covid trap; unfortunately, we were right," the report said.

An opaque crackdown on private technology companies undercut global investor sentiment, put some of the country's most promising firms into a deep freeze, and wiped out an estimated one trillion dollars in market value.

The ill-effects of centralized decision-making on public health are now on display. Just weeks ago, Xi ended the zero-Covid policy in the same arbitrary manner that he implemented it more than two years ago.

His snap decision to lift all restrictions and let the virus spread unchecked despite low elderly vaccination rates, without warning citizens and local governments, and absent sufficient preparations to cope with the resulting outbreaks will all but ensure that more than

one million Chinese people will die, many unnecessarily

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