Editor’s note: This is the first of a two-part series that uses current trends in the Chinese political economy to forecast the outcomes and implications for China under the fifth generation of Communist Party leadership. Part I examines a best-case scenario. Part II will examine a worst-case scenario.
SHANGHAI -- As China approaches its once-a-decade senior leadership transition, structural weaknesses in the country’s economic model are becoming more apparent, even as the momentum surrounding progressive reforms appears to be incrementally increasing. A best-case scenario for China under the fifth-generation Communist Party leadership assumes a continuation of both trends, with the net result being a reinvigoration of the Chinese economy and accelerated social development. These changes in turn allow China to assume a position of global leadership as a benign new superpower whose rise has an overwhelmingly positive impact on global affairs.
By this scenario, the new leadership arrive with a bang, abandoning the one-child policy to dramatically underscore the symbolic opening of a new chapter in the country’s history. (In reality, given China's level of development and previous easing, the demographic impact of the change would not be enormous.) They then push ahead with accelerated financial reform, including convertibility of the yuan and the evolution of a considerably more open domestic market. Most significantly, in a major constitutional reform, progressives among the new leadership abandon the judicial framework of the “Three Supremes” and bring the party firmly under the jurisdiction of the national constitution, thereby resetting the relationship between government and state.