CCP collapse causes extinction

On the domestic level, Beijing’s policymaking is already becoming less agile and adept. Examples of this more rigid approach, and its downsides, aren’t hard to find. Consider last winter, when the government decided to force an abrupt nationwide switch from the use of coal to gas in heating systems. It sounded like a smart move for a country as polluted as China. But the edict was enforced suddenly across the country, with no exceptions. Thus in China’s frigid north, many coal-burning furnaces were ripped out before new gas ones could be installed—leaving entire towns without heat and forcing villagers to burn corn cobs to survive. If China continues down its current course, expect many more cases where even well-intentioned policies are implemented in a rash and clumsy way, leading to still more harmful consequences. Since personalized dictatorships are necessarily bad at admitting fault—for nothing can be permitted to damage the myth of the omnipotent leader—China will also likely become less adept at correcting mistakes once it makes them. Or at confronting the underlying problems that are dragging down its economy, such as an overreliance on bloated and inefficient state-owned enterprises (SOEs), which have only grown bigger and more powerful since Xi took office; dangerously high debt levels, especially among local governments; and a tendency to react to every downturn by pumping more cash into the system, especially for unnecessary infrastructure projects. In fact, China is not only unlikely to address any of these shortcomings; it’s likely to compound them. That is just what it did on Oct. 7, when the People’s Bank of China announced yet another costly stimulus program: a $175 billion plan to shore up small and medium-sized businesses. With each new budget-busting move, and in the absence of reform, the odds that China will experience a seriously destabilizing economic crisis—which China bears such as Ruchir Sharma, the head of emerging markets at Morgan Stanley, have been predicting for years—keep rising. “The big question is whether one of the ticking time bombs—bad debt, overheated property markets, oversized SOEs—will explode,” Gabuev says. “Because of Xi’s concentration of power, no one will give him advance warning if one of these bombs is about to go off. And because he doesn’t actually understand macroeconomics very well, and everyone is afraid to contradict the emperor, there’s a huge risk that he’ll mismanage it when it does.” Indeed, the government’s response to any instability is likely to be ugly. As Schell explains, “Xi has really put China at enormous risk. And because his only tool is repression, if things go wrong we’re likely to see even more crackdowns.” Such predictions should worry everyone. China is the world’s largest economy by some measures, so if it melts down, the entire planet will pay the price. But the history of other autocracies, such as Vladimir Putin’s Russia or Kim’s North Korea, suggests that Xi’s relentless power play could produce even worse consequences. Since taking power, Xi has charted a far more aggressive foreign policy than his predecessors, alienating virtually every neighbor and the United States by pushing China’s claims in the South China Sea, threatening Taiwan, and using the military to assert Beijing’s claims to disputed islands. Should China’s economic problems worsen, Xi could try to ratchet up tensions on any of these fronts in order to distract his citizens from the crisis at home. That temptation will prove especially strong if U.S. President Donald Trump keeps poking China by intensifying the trade war and publicly denouncing it. And things could get scarier still, Pei warns, if China’s economic problems spin out of control completely. In that case, the Chinese state could collapse—a typical occurrence among typical dictatorships when faced with economic shocks, external threats (especially a defeat in war), or popular unrest—but one that, given China’s size, could have cataclysmic consequences if it happened there.