Moisés Naím / El Pais

Ten years ago, we thought we understood how China worked. The Asian giant had left Mao Zedong's dictatorship behind and was becoming a hybrid entity, neither capitalist nor socialist but always pragmatic. Leadership was no longer exercised by one person but by a collegiate institution—the Standing Committee of the Political Bureau of the Central Committee of the Communist Party. In that body, the country’s top seven leaders would hash out the policies of the state. The paramount leader, who was at the same time the head of the Communist Party and the Chinese state, rotated every five years. Although this leader had a lot of power and prestige, he could not unilaterally dictate the party line: he had to negotiate.

This leadership model valued social stability above all things and saw economic growth as the best way to safeguard it. It concentrated power within the Communist Party, but delegated a good part of that power to its regional and local officials—who often ended up crafting little empires of corruption around themselves. It didn’t object to private property, and it was relaxed about the emergence of huge fortunes among the founders of tech companies. Naturally, it maintained state control over the economy and did not hesitate to direct private firms to achieve the state’s long-term objectives. It was an eclectic and pragmatic model, with many centers of power and wealth dispresed throughout the country under unquestioned and unquestionable central leadership.

Did it work? Boy did it work! In the quarter-century that the collective leadership model was in place, China’s economy went from a paltry of 310 dollars per person per year in GDP (about 288 euros at the current exchange rate) to more than 7,000 dollars (about 6,500 euros). No longer one of the world’s poorest countries, China became an undisputed superpower with investments, trade, influence and prestige on all five continents. Few government systems in history have been so successful.

Many believed that sooner rather than later China was destined to become the most powerful economy in the world. Experts debated when exactly that would happen and what consequences it would have for the global geopolitical balance. International relations journals were filled with articles about the Thucydides Trap, a 2,400-year-old hypothesis that suggests that great wars occur when a rising power threatens the hegemony of an established power.

What no one suspected ten years ago was that the Chinese model would collapse not due to an economic or geopolitical crisis, but because of the lust for power of a single man: Xi Jinping.

Since Xi came to power in 2013, his government has abandoned the basic pillars of reformism one after another. Rather than letting the Standing Committee make decisions, Xi has centralized all strategic decision-making in himself and filled the Committee with cronies who support him unconditionally. This concentration of power ended the relative autonomy that regional and local political leaders had enjoyed, subjecting them to much tighter control from Beijing. Worse still, Xi ended the practice of rotating the leadership of the state among his colleagues, ending term-limits and positioning himself as a dictator for life.

Once power was centralized in one man, what usually happens to dictators happened to Xi: he began to make mistakes. Surrounded by yes-men who didn’t dare defy the boss, he imposed a zero-Covid policy that caused permanent damage to the Chinese economy. By attacking the large tech companies that had emerged during the reform era, he crippled the economy’s potential for innovation. And he has been so clumsy in his handling of the country’s top-heavy and over-leveraged real estate giants that he has achieved what until recently seemed impossible: ending China’s miraculous run of fast economic growth.

Experts no longer take it for granted that China will one day be the world's largest economy—leading analysts now argue that that day may never come. Facing the dual crisis of unemployment and deflation for the first time, Xi seems to have no answers to the serious problems that his government has created and he appears more isolated every day.

Xi is discovering what many rulers already know: a large contemporary society is too complex an entity to be governed by a single man. The reformist collective leadership that Xi dismantled was far from perfect: it was authoritarian, corrupt, bureaucratic and blind. But it knew how to learn and adapt to a changing world; something Xi's dictatorship cannot seem to do.

@MoisesNaim