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China’s system has a potential duality:
Everyone from the top to the bottom plays along when the pie is expanding, and endemic corruption can be treated as a predictable cost of doing business.
However, when the pie stops growing, there isn’t the level of contract assurance that other rich countries offer. The Pareto optimal competition between powerful interests once growth fully stalls will be very interesting to watch. Xi will have his hands full, picking winners and losers, and lots of billionaires and centimillionaires will head for the door, taking significant capital with them. Worse, foreign investment will tail off, and decreased predictability will cause foreign companies to look hard at production in other places. At the bottom of the economic ladder, corruption will be much more apparent and challenging.
Xi’s bet seems to be that he can use technological repression tools to manage discontent in a downturn. We’ll see; he may be right. If the Stasi had had access to Palantir, Israeli spy software, and Chinese hardware, Checkpoint Charlie might still be in place.