The world, including the Chinese people, watched Chinese President Xi Jinping scrap presidential term limits in March 2018 with puzzle and shock. Most observers have framed the discussion on his move as power-grabbing to make himself the emperor of modern China. So is this a tale of the emperor's new clothes, or are we just not intelligent enough to see them? Are we seeing a benign ascent of China to the global stage or the birth of another dictatorial nation? At this point, there are more questions than answers about what this means for China and for the world.
The timing of China's constitutional change could not have come at a worse moment for Sino-U.S. relations. U.S. President Donald Trump's "America First" policy has begun painting China as a "strategic competitor" that is pursuing an authoritarian path under Xi Jinping. And Xi's "Chinese Dream" policy will only intensify the fears about China among Americans, who will further link China's leadership with that of other authoritarian regimes such as Russia and Turkey. Such an atmosphere of distrust can only aggravate anti-China sentiment in the U.S. administration.
Meanwhile, there is also rising criticism from Chinese liberal intellectuals, rival political elites, and even the average Chinese citizen. If this internal dissent is combined with the increasingly negative international views about the Middle Kingdom, it may lead to a leadership split and political instability in China later, sending negative Shockwaves through the rest of the world.
Although the concerns about Xi making himself China's "emperor" deserve serious analysis, the prevailing views also fail to take into account Chinese perspectives on internal politics, political incentives, and policy objectives. What is poorly understood--and revolutionary--about Xi's approach is his forceful change of the political and economic incentives that have governed the country for over three decades. He has a much bigger agenda than what most observers see in the power-grabbing move. This means that the concerns about China moving toward a tyrannical state also miss some important points. Crucially, China's new economic model is based on strategic usage of markets under state guidance, not on most observers' naive argument for market liberalization with a shrinking role for the state. Key-man risk is the ultimate China risk that the world has to face in the future.
XI'S MESSAGE TO THE PARTY
To ensure he will have enough time and power to make the necessary structural changes, Xi managed to manipulate enough support to revise the constitution to remove the presidential term limits at the National People's Congress in March 2018. His move not only showed that he had the power to break with past conventions and change the constitution, but also that he dared to challenge and alter the unwritten rules that have long guided the Party bureaucracy. For better or worse, he is moving China to a more centralized...