Russia in Global Affairs

For citation, please use:
Lomanov, A.V., 2023. “To Foresee Black Swans, to Watch Out for Gray Rhinos”. Russia in Global Affairs, 21(2), pp. 164–179. DOI: 10.31278/1810-6374-2023-21-2-164-179

At the end of November 2022, Chinese cities and university campuses saw protest demonstrations demanding the lift of severe anti-coronavirus restrictions, and the establishment of democracy, the rule of law, and freedom of speech in the country. Also, some urged Xi Jinping’s resignation. These events were especially unexpected as the 20th Congress of the Communist Party of China held in October had produced a favorable outcome for the Chinese leader.

The current Chinese leadership can hardly be blamed for relaxed complacency. The Central Committee, in its report to the party forum, made no secret of anxiety about the future. Xi urged the CPC to get ready properly for forthcoming trials. He explained that in the process of the country’s development, strategic opportunities, risks and challenges went hand in hand, there were ever more uncertainties and hardly predictable factors, with “black swans” and “gray rhinos” likely to emerge on the doorstep at any moment.

The Chinese leader’s penchant for national tradition-based metaphors is well known, but this time he borrowed synonyms of ominous incidents from the Western lexicon. Unexpected events entailing serious consequences were called “black swans” by Nassim Taleb (2007). And a highly plausible—yet overlooked—threat had been described as a “gray rhino” by Michele Wucker (2016). Xi called for foreseeing the emergence of “black swans” in advance and discerning a nearby “rhino” in time.

The black swan of protests showed up a month after the end of the CPC Congress. The wave of demonstrations came as an unpleasant surprise to the authorities. For several years, the CPC leadership had proudly declared the superiority of the Chinese system over Western democracies in its efforts to save people’s lives during the epidemic. There was no falsity in these arguments. Had China followed the Western path of half-hearted short-term measures, the death toll from the coronavirus could have climbed to above four million. Thanks to the tight restrictions China enforced from the beginning of 2020 until the end of the fall of 2022 the epidemic claimed no more than six thousand lives.

However, the successful policy began to generate side effects. People got tired of lockdowns but remained afraid of the threat of an uncontrollable wave of the epidemic. Hasty lifting of restrictions would have inevitably provoked such an outbreak, overstrained the health care system and caused a surge in deaths rates. The authorities’ careless consent to meet the demonstrators’ demands would have triggered a nationwide crisis and ruined the image of the CPC as a responsible political force that regards saving people’s lives above all other tasks, including economic growth.

The wave of anger was put under control within a few days. In 2023, the Chinese leadership will likely find a smooth and relatively painless way to exit the “zero tolerance” policy. Yet the unexpected protests of November 2022 served as a reminder that sudden turns in China’s development remained a possibility. The anti-government youth protests awakened the dormant specter of a “color revolution” that could destabilize the country and slow down economic growth.

The Leader and the System

The consolidation of power in the first decade of Xi’s rule was a preemptive response to the threat of instability. He persuaded the party elite to support his third term, a privilege his predecessors Jiang Zemin and Hu Jintao as general secretaries of the CPC Central Committee had not enjoyed. Changes to the five-year political cycle seem unlikely. This means that Xi will remain at the helm of the CPC until at least 2027, and maybe until 2032. In June 2033, Xi will turn 80. U.S. President Joe Biden, who hit the mark in November 2022, is to rule a global superpower for another two years.

The main intrigue is that the 20th Congress produced no clarity regarding Xi’s political successor. If such a personality emerges at the 21st Congress of the CPC in 2027, this will herald preparations for a planned transfer of power at the 22nd Congress in 2032.

It is quite possible that the Chinese leader will prefer to avoid such a scenario in order to retain the role of the unchallenged “core” of the ruling party for as long as possible.

Foreign experts have been asking rhetorical questions about what will happen to China if Xi, who has assumed all reins of power, suddenly loses the ability to govern the country. However, his health and longevity worry them far less than the inertial stability of the Chinese system of power, which allows a “bad leader” to stay in office for a long time. Jude Blanchette acknowledges that there are no political forces left in the top tier of the Chinese political elite that would be capable of ousting Xi or placing “some limits around” him. “But this is not the China of the 1980s, the 1990s, or the early 2000s. The old ways of conceptualizing Chinese politics no longer prevail. Opposing factions won’t constrain Xi. The much-vaunted but rarely seen reformers aren’t coming to rescue economic policy,” he writes (Blanchette, 2022).

As they look at the Politburo Standing Committee (PSC) of the 20th CPC Central Committee, formed in October 2022, consisting of loyalists and associates of Xi, foreign analysts nostalgically recall the era of Hu Jintao. At that time, one could easily notice the confrontation between the YCL and Shanghai groups inside the PSC. It is assumed that the political rifts forced the General Secretary to seek a balance and negotiate, leaving no room for arbitrary decisions. Under Hu, the country lived comfortably and calmly, gradually sliding into stagnation with Chinese characteristics. Relations with the West were not bad, and therefore the country’s poor readiness for the deterioration of external conditions for its development did not cause serious concern.

Hypothetically, if Li Keqiang rather than Xi had been promoted as Hu’s successor at the end of the first decade of this century, this could have ensured the continuation of the old course. In real life, though, Li took the position of prime minister in the “tandem.” In the first years of his tenure, foreign experts attributed to him a special strategy for economic reforms—“Likonomics.” Over time, Xi took control of the policy of change in his own hands, while Prime Minister Li turned into a technical figure embodying the vision of the party’s leader.

In a fictional scenario of a political coup in China in the early spring of 2022, on the eve of the 20th CPC Congress, concocted by retired British diplomat Roger Garside, Li spearheads a plot against Xi (Garside, 2021).[1] Upon learning the news of the U.S. Securities Commission blocking Chinese stock trading, the prime minister is horrified by the economic consequences and China’s inability to withstand a clash with the world’s strongest power. Inspired by the example of Boris Yeltsin, who realized the need for simultaneous economic and political reforms, Li persuades like-minded associates to oust Xi. In an imaginary configuration of the new government, Li becomes General Secretary of the CPC Central Committee, his ally Wang Qishan takes over as China’s President, Wang Yang occupies the vacant seat of prime minster (in real life, at the end of 2022, Wang Qishan remained China’s vice president, and Wang Yang retained the office of chairman of the National Committee of the Chinese People’s Political Consultative Conference (NC CPPCC)). The associates then empower Li to inform the U.S. president that the Politburo had made a decision in favor of large-scale constitutional and political reforms.

The most striking thing about this political fairy tale is the Western author’s strong belief that the first move by China’s new leaders would be to surrender to the United States. All previous speculations about the relentless battle between “reformers” and “conservatives” within the Chinese leadership are now a thing of the past. The elite are well aware that without further transformation China will be doomed to economic slowdown and a chronic lagging behind the modern world’s frontrunners. However, the efforts to find contradictions between the advocates of cooperation with the West and adherents of the “Chinese way” also seem futile.

The Chinese elites are used to being on friendly terms with the U.S. but are not ready to sacrifice their national interests.

For ten years, Xi has been rallying the elite around long-term development goals. The prospects for political liberalization have vanished from the horizon of the foreseeable future, while the influence of the CPC’s official ideology on the life of society has increased markedly. The absence of factions and groups in the new composition of the PCS reflects an objective imperative for creating a close-knit team around the Chinese leader for the sake of the fastest and most effective decision-making.

From Crisis to Democracy

The outlook for China’s democratization has long been of great concern to Western experts. In China’s Democratic Future, published two decades ago, Bruce Gilley drew inspiration from the collapse of the Soviet Union and changes in Eastern Europe. He predicted an upsurge in public discontent supported by liberal intellectuals. He envisioned “a rapid elite-led move to democracy prompted by modest popular protest linked to an economic or political crisis” (Gilley, 2004, p. 98). He expected the onset of change no later than 2020, or a few years later.

The image of a democratic China turns out to be pathetic and weak. A transformed country is immersed in its own problems, with growing separatist movements in Tibet and Xinjiang. The authorities are forced to clinch a deal with Taiwan, having agreed with the Taipei administration that it will refrain from immediate declaration of independence in exchange for subsequent recognition of the island’s autonomy and abandonment of military threats (similar to Boris Yeltsin’s 1991 agreement to support the independence of the Baltic republics in exchange for their help in the fight against “anti-democratic” Gorbachev). China is moving towards loose “new federalism” while losing world influence for a long time. However, in the long term, according to Gilley, as a “reliable and stable democracy,” China becomes a loyal ally of the United States, after which further presence of U.S. armed forces in Asia becomes redundant.

The parallel between a democratic China and a weakened, subdued Russia, drawn at the beginning of this century, now looks like a formidable warning. The chances of a humiliated post-Communist China returning to the world stage, angry and dissatisfied with its fate, are far greater than the possibility of a happy Sino-U.S. alliance in the distant future. There is no reason to hope that the Chinese elite will lead the effort to dismantle the system, thus dooming the country to prolonged internal turmoil. Such speculations were possible in the early years of Hu’s rule, but the centralization of power that Xi has carried out makes such a scenario improbable.

Previously, the expectations of China’s democratization were pinned on a steady decline of the CPC’s influence and the party’s internal disintegration. After Xi came to power against the backdrop of the “new normal” of slow growth, which was obvious and recognized by the authorities in the first half of the 2010s, other countries interpreted the economic slowdown as a hidden driver of political transformation. After all, something similar happened in South Korea and Taiwan, when, after the “economic miracle” was exhausted, the authoritarian regimes gave way to democratic rule. This scenario suggests that the CPC will initiate political reforms for fear of popular dissatisfaction with economic slowdown.

China needs economic growth. However, amid tighter competition with the West, the negative impact of foreign sanctions and protectionist measures on the economy will increasingly outweigh the costs of maintaining a one-party system. South Korea and Taiwan could afford political transformation experiments in the 1980s, while staying in the Western camp under U.S. protection. China’s attempt at democratization in the current situation may be very dangerous, should Western opponents interpret it as a sign of weakness and an invitation to build up pressure for ruining the CPC’s power. In this case, the Chinese economy will face the risk of collapse under the pressure of sanctions, and not economic prosperity.

Within the framework of stable development, China can choose different trajectories of further movement. A scholar of great authority, David Shambaugh, assumes that under Xi, the CPC leadership has found itself at a roundabout where it has to decide which of the four pathways to choose in order to move forward. The real alternatives are Hu’s reform-friendly “soft authoritarianism” with weaker control matching the style of Hu’s rule, and Xi’s “hard authoritarianism” that allegedly threatens to bring China to economic stagnation and higher social tensions. The extreme and therefore less probable options are “neo-totalitarianism” similar to that which reigned in China in 1989-1992 after the events in Tiananmen Square, or Singapore-style “semi-democracy.” It is assumed that concern for economic development and good relations with Asian countries and the Western world will push Beijing towards “soft authoritarianism” and then further towards “semi-democracy” (Shambaugh, 2016).

The desire to enchant China with the example of a prosperous city-state, Singapore, is reminiscent of past attempts to inspire Russia with the image of a small European state with clean streets, lavish social benefits and complete lack of foreign policy ambitions. To take this idea seriously, one has to completely forget that these nice and tidy microstates thrive within giants-led military-political alliances.

Russia and China, as huge sovereign powers, have nobody to rely on and are forced to survive on their own.

Post-Soviet Russia’s relations with the West furnished convincing proof to the Chinese elites that the discarding of old institutions and the transition to a democratic model will not help create strong and stable ties. After the West resumed the policy of China’s containment, the likelihood of a voluntary political transformation of the Chinese system of power for the sake of gaining external economic and diplomatic dividends plummeted to zero. The West has enthusiastically tried to change China’s behavior by damaging its economy, which in the future may harm internal stability. In response, Beijing has taken steps to shrug off dependence on the West. At the 20th Congress, Xi repeatedly mentioned the “spirit of struggle” and called for active protection of favorable conditions for national development.

The ABCs of Marxism

Western experts ever more often resort to the CPC’s official ideology for presenting the rivalry with China as an existential conflict of ideas and values, in which there is no room for compromise. The call for “upgrading and Sinicizing Marxism” featured prominently at the CPC Congress. Such a turn took foreign mainstream analysts by surprise, for they had expected to see smooth and irreversible erosion of the CPC’s ideology. Many pundits blame Xi personally for taking steps in the “wrong” direction and predict serious economic problems for China.

Kevin Rudd (perhaps the most knowledgeable sinologist among retired Western politicians) argues that fascination with Marxism will lead to the CPC’s tighter grip on private businesses, let the government have a greater say in the economy and in drafting industrial policies, and encourage attempts to achieve “common prosperity” through redistribution of incomes. After that economic growth in China will slow down, businesses will become timid and scared, and foreign investors will lose interest in the country (Rudd, 2022, p. 18).

The attempts to measure Chinese Marxism with the yardstick of the Soviet Communist Party’s ideology of the Brezhnev era is a road to failure along with offers of a bright democratic future for China tailored according to the templates of post-Soviet Russia. Xi curbed the ambitions of Internet giants not in order to eliminate private property, but in order to create favorable conditions for private enterprise to develop and loosen the monopolies’ noose on the neck of medium and small-sized businesses. The state sees the potential of private businesses and by no means seeks their nationalization. Xi’s ideas are aimed at consolidating the party and the public at large, and their impact on the economy should not be exaggerated. The Chinese leader is not a hardline supporter of Soviet-style “Marxist-Leninist orthodoxy.” However, during his rule, one should not expect “peaceful liberalization” of politics and the economy, as Rudd warns.

The interpretation of the CPC’s modern ideology as a reincarnation of Soviet Leninism and even Stalinism is brimming with political deception. Research assumptions evolve into justification of calls upon the United States and the West as a whole to prepare for an uncompromising ideological clash with China. Allusions to Xi’s ten-year-old quotes about the failure of ideological work as the main reason for the collapse of the CPSU serve as a pretext for declaring the need for ending the West’s “dependence” on China, for creating, under the leadership of the United States with the support of Australia, Japan and Taiwan, “an unmistakably superior and well-coordinated military presence in the western Pacific” and for containing China’s “dictator,” who has entered his second decade in office (Pottinger, Johnson and Feith, 2022).

The growing attempts to demonize the Chinese leader are pushing the prospects of a rapprochement between China and the West beyond the horizons of this decade.

Stirring up a confrontation will not induce Xi to turn liberal. On the contrary, there is an increasing likelihood that his successor in the 2030s will remain committed to Chinese Marxism as the cornerstone of the CPC’s ideology. The West’s attempts to include a “war of ideas” in the agenda of containing China significantly limit the already shrinking space for an open and equitable dialogue on ideals and values. Meanwhile, the implementation in the next decade of Xi’s policy of merging Marxism with the best heritage of traditional Chinese culture will generate a unique synthesis, the content of which will become almost incomparable with Soviet Marxism of the 20th century.

Western commentators are in the habit of labeling Xi as “new Mao Zedong” and a follower of Lenin and Stalin. It is important not to jump at hasty conclusions that at the end of this decade the country will again look like the PRC of the 1960s and the 1970s or the postwar Soviet Union. The social structure of Chinese society has changed profoundly. It has become multi-layered and heterogeneous. Attempts at replicating the old political superstructure on the new basis of a market economy will not work.

The most likely scenario is the CPC retaining and strengthening its power within a model that combines the private and public sectors. If the policy of “common prosperity” is to be perceived as a veiled call for “expropriating the expropriators,” China will really run the risk of getting back to the notorious “iron rice bowl” era, that is, total leveling. However, the Chinese elite is well aware of this risk and continues to look for a balanced way to smooth out the wealth gap that has emerged over decades of reforms without harming private business. Should the ideology of passive dependency be allowed to spread in Chinese society, it will stop economic growth irreversibly and forever. Therefore, any attempts by the Chinese authorities to make the people happy with “common prosperity” fundamentally rule out replicating the Western policy of lavish distribution of social benefits.

In the second decade of Xi’s rule, the main goal will be to bring GDP per capita to a level of moderately developed countries by 2035. According to experts, this target income is equivalent to about $25,000-30,000 a year. The slowdown in growth in 2022 caused by coronavirus restrictions served as a reminder that without dynamic development China will not achieve its goal. It is necessary to ensure sustainable long-term growth at a rate of at least 5 percent a year. It can be safely assumed that after the epidemic turmoil of 2020-2022, the Chinese authorities will reemploy financial incentives, well mastered over the years of reforms. There is no question of returning to the discarded methods of economic planning by decree and administrative coercion.

Power and Sovereignty

At the end of Barack Obama’s presidency, Xi’s attempt to offer the United States an equal relationship between the two major powers, based on common benefit and mutual respect, proved unsuccessful. Under Donald Trump, economic relations became openly confrontational. Under Joseph Biden, the rivalry spilled over into politics and ideology. The chances for agreement between Xi and Biden’s successor are slim. As mutual trust between Beijing and Washington wanes, the parties’ willingness to make concessions and keep promises noticeably declines.

Creation of an agreed restrictive framework for the growing rivalry that would prevent an escalation of bilateral contradictions into a full-scale military conflict could be an achievement of the 2020s. China is not ready to surrender to the United States, partly because of its confidence in the merits of the Chinese system, which has maintained long-term economic growth. Aware of this, the U.S. will feel ever stronger temptation to trigger an economic crisis in China and drive it into a dead end of social development. Obviously, China will resist such plans with all its might.

The mobilization of political will and economic resources will not only increase the Chinese society’s resilience to possible shocks but will also increase mutual alienation between China and the United States.

Chinese politics in the 2030s after Xi may acquire some shades of a “thaw” and a weakening of “hard authoritarianism,” but the nostalgia for friendship and cooperation with the Americans will by then be largely supplanted by the experience of bitter rivalry in the 2020s.

China responded to the Western policy of “decoupling” with a strategy to strengthen scientific, technological, and industrial self-sufficiency. Adherence to this policy amid changes in the growth model and a decrease in cheap labor and affordable raw materials will be a daunting task. In the context of a global open economy these industries would certainly be considered redundant and loss-making; in fact, this was why there was no rush to create them in previous years. However, in the face of sanctions and disruption of production chains, their emergence becomes an imperative for protecting China’s sovereignty.

The threat of technological blackmail by the West was the “gray rhino” that China failed to notice in the context of globalization. Chinese leaders were making plans for industrial modernization, counting primarily on a greater share of foreign markets, and not on import substitution. The creation of the missing industries on the domestic basis will make Beijing immune to Western technological blackmail. By the end of the 2020s, China may well build a material support for a multipolar world, if it acquires the ability to provide allies with the full range of modern technologies (including civil aircraft) and means of production (including lithographic equipment for microchips). When these technologies appear in China, the West is likely to lift the sanctions that will become meaningless, or rather, to reimpose them on areas that have not yet been mastered by Chinese developers and industrialists.

Taiwan has become the most dangerous source of a large-scale regional conflict involving the United States.

Cai Xia, a former professor at the Central Party School of the Communist Party of China, who became an uncompromising critic of the Chinese government in her declining years, hopes for Beijing’s military defeat. She expects that Beijing’s attempt to solve the Taiwan problem by force will be thwarted with U.S. support and that Taiwanese resistance will inflict unacceptable damage on mainland China. After that, she claims, the elites and the masses will turn their backs on Xi, paving the way for the fall of the Chinese leader and even the collapse of the CPC’s power (Cai, 2022, p. 107).

The flippant defeatism in the name of democracy overlooks the vexing issue of the Taiwan conflict escalating into a nuclear war between China and the United States. However, this threat does not eliminate the problem of reunification. Only extremely weak and unequivocally West-leaning Chinese leadership would abandon this goal. Xi says that China’s road to national revival lies in reunification. This is a strong enough hint that the unification of the two sides of the Taiwan Strait should occur before 2049, that is, before the centenary of the PRC.

The Democratic Progressive Party (DPP), which came to power in Taiwan in 2016, does not recognize the “One China” policy. But without it, any speculations about a peace rapprochement have no foundation for negotiation. On the other hand, the use of force is fraught with dire consequences, including the imposition of wide-ranging economic sanctions on the mainland by the West.

The “gray rhino” of a national split has emerged from the shadows and is looming menacingly over Chinese politics.

Beijing sees well enough that Western countries are ready to use a pointed rapprochement with Taiwan as a deterrent. Political opposition to the West on the Taiwan issue is a natural countermove aimed at putting the situation on hold until China accumulates sufficient power to protect its interests. However, time works against the mainland. Taiwanese society is rapidly acquiring its own non-Chinese (and even anti-Chinese) identity. The bonds of a common historical and cultural heritage connecting the islanders and the mainlanders are getting loose. The more convincingly the island’s intellectuals and politicians argue that Taiwan is not China and that the Taiwanese are not Chinese, the fewer chances there are to make Taiwanese society believe in the advantages of Chinese unity.

The Chinese leadership has long born the delusion that economic cooperation with Taiwan and allocation of lavish preferences will facilitate the convergence of interests and political understanding. Western experts argued that after China’s transition to democracy, reunification would become a tangible prospect. However, it is already obvious that the economy has not generated any political affection for the mainland on the island. In case of a democratic vote the people of Taiwan will reject reunification.

Taiwan’s 2024 presidential election will be an important turning point. The victory of the Kuomintang party, which has retained the memory of a united China and is set to interact with the mainland, is capable of stopping the slide towards the abyss and giving the dialogue another chance. The DPP’s continued rule will mean that political interaction between the two sides of the strait will stay disrupted until the end of this decade. This argument will inevitably tilt the scales in the eyes of the Chinese leadership in favor of reunification by force.

To Survive and Outlive the USSR

At the 20th Congress of the CPC, Xi urged to strengthen “confidence in history,” remember the successful struggle in the past, and keep the spirit of struggle in the present. He said that without “confidence in history” the party will not be able to guarantee long-term successful governance of the country in the future. Nor will it be able to unite the people for the sake of national revival. It can be concluded that during Xi’s rule, the CPC will resolutely suppress attempts to promote alternative critical interpretations of the history of the party and the state that might sow doubts about the legitimacy of the existing system.

The least likely scenario of China’s future is a Soviet-style collapse. The Chinese elite keep in mind the lessons of the CPSU’s decline and the collapse of the USSR and try to prevent a replay of such events at home. The history of the Soviet Union remains the reference point and yardstick of China’s success.

In January 2018, at a meeting with an audience of senior functionaries, Xi remarked: “Our party has existed for 97 years, and New China has existed for 69 years. The CPSU lasted for 86 years, and the USSR, for 74 years. The history of our party has surpassed the history of the CPSU, but the duration of our party’s possession of political power throughout the country is inferior to that of the USSR. By the middle of the century, the history of our party will approach 130 years, and the history of New China, a hundred years” (Xi, 2022). He urged everyone to look at the issue on a millennium scale and to exert every effort to maintain the power of the CPC and socialism with Chinese characteristics.

In 2021, the CPC celebrated its 100th anniversary. And in October 2023, the PRC will turn 74. After that it will surpass the USSR in terms of political longevity. And this will be an important symbolic victory in the historical competition with a state that no longer exists.

However, China cannot afford the luxury of resting on its laurels. In his speech at the CPC Congress, Xi focused on preparations for a “New Long March” (xin zhengcheng) for the sake of building a modern Chinese state. This slogan is an allusion to the dramatic and exhausting 1934-1935 Long March (Changzheng) by the Chinese Red Army, when stopping or easing resistance would entail imminent death under the blows of the Kuomintang troops. The New Long March does not promise an easy tourist hike either.

China will have to complete modernization in the face of growing confrontation with the West. If the CPC succeeds in addressing this challenge while maintaining acceptable growth rates and social stability over the next two decades, China will be able to change not only itself, but the entire world order we are accustomed to.