◎ Presenting our China 2022 outlook.
The past two years have seen a nonstop mounting of challenges for Xi Jinping and the Chinese Communist Party. The coronavirus pandemic and Beijing’s “zero COVID” strategy, a rapidly deteriorating economy, worsening property sector debt crisis and spreading financial contagion, growing international pressure, and intensifying factional struggle in the Party elite are among the more crucial issues pushing the regime closer to a reckoning.
Xi enters 2022 needing to secure a norm-breaking third term and optimal personnel reshuffles at the 20th Party Congress. Meanwhile, Xi’s enemies at home and abroad have tremendous incentive to deny the Chinese leader his political wishlist and seek his ouster. Xi’s domestic rivals are keen on surviving and winning the “you die, I live” factional struggle, while Xi’s foreign foes need a cooperative PRC to realize the shift to a global climate economy and pull off a successful “Great Reset.”
With huge stakes on the line for both sides, Xi and his rivals could find themselves taking bold, risky action in 2022 to achieve their respective agendas. This, coupled with precipitous polarization (politics, values, society, etc.) around the world, creates a climate ripe for Black Swans to emerge in China and elsewhere.
We anticipate three broad trends in 2022:
1. Factional struggle in the CCP elite will reach a boiling point, with a chance of a decisive conclusion. Neither Xi Jinping nor his rivals want the other to achieve their respective political goals at the 20th Party Congress, and will seek to undermine each other. Xi’s foreign enemies could also attempt to leverage escalating factional struggle to their advantage, further complicating matters for him.
2. China’s “perfect storm” of internal and external problems will worsen, compounding Xi and the CCP’s woes. The CCP regime is akin to a badly balanced Jenga tower; a slight miscue could send the whole structure quickly tumbling down. The global “green” energy push, technology competition, and population decline are three Gray Rhinos that could trigger social changes in China in the next five years.
3. Authoritarianism in various forms will be on the rise globally as governments work to survive or exploit crises. Growing authoritarianism, however, risks damage to governments’ legitimacy (including that of the CCP), resulting in political crisis and popular unrest.
Our China 2022 outlook contains 41 predictions covering eight categories: Politics, the economy, military, society, Hong Kong, cross-strait relations, Sino-U.S. relations, China and the world.
