What if autocracies are incompetent and failing?

Putin and Xi
AP/Alexei Druzhinin, Sputnik, Kremlin pool photo
Russian President Vladimir Putin and Chinese President Xi Jinping smile at each other during their meeting in Beijing on Feb. 4, 2022.

For all of the Biden administration’s rhetoric about democracies versus autocracies being the defining challenge of our times, if democracies are in trouble, autocracies may be the least of their problems.

Why? Because the evidence is mounting that Russia, whose fortunes in Ukraine are declining, and China, in deep economic trouble and facing a global backlash to leader Xi Jinping’s aggressive foreign policy, are not as strong as they once seemed. In both cases, the lack of accountability and corruption inherent in autocratic systems threatens to turn seriously flawed policies closely identified personally with both Russian President Vladimir Putin and Xi, respectively, into disastrous outcomes.

Ukraine’s current counter-offensive has already recovered over 3,000 square miles in its East from exhausted Russian troops in what may mark a turning point in the war. Last week in Uzbekistan at the Shanghai Cooperation Organization (SCO) Summit, a Eurasian political-security group, Putin endured a remarkable reproach — from his friends.

In what seems a measure of Putin’s sagging stature, China distanced itself from Moscow such that after a Xi-Putin meeting, in a rare public admission, Putin acknowledged China’s private “questions and concerns” about the war. India’s Prime Minister Narendra Modi went further, publicly admonishing Putin that, “this is not the era of war” and chiding the Russian leader for the economic pain India has suffered from the war’s impact. As India is a major buyer of Russian oil and a longtime friend, this was a stunning rebuke.

But the economic impact of the war and Western sanctions may be still more worrisome for Putin. As a result of the European energy decoupling, Moscow’s oil production (a source of some 50 percent of government revenues) is down by 1.9 million barrels a day, according to the International Energy Agency (IEA).  

Yet the Russian economy is taking its biggest hits from the U.S.-led tech and financial sanctions. After only seven months, the numbers are stunning: a 40 percent drop in stock capitalization; $300 billion in central bank reserves frozen; 4.6 trillion in eurobonds frozen; and 563 billion rubles in retail bank assets frozen.

More than 1,000 global firms have left Russia, and it is now forced to cannibalize spare parts and computer chips. There has been a massive brain drain as younger tech experts and other professionals have left. According to a July Yale study, an inability to get foreign investment, float bonds and get oil and gas equipment and services, as well as computer chips and other hi-tech goods, will make it all but impossible for Russia to compete as a modern economy. Win or lose the war, Putin has mortgaged Russia’s future.

For Xi, approaching an important party congress where he hopes to be confirmed as leader for life, the nation is facing unprecedented challenges, most of their own making. Months of record heat and drought have made more dire China’s already daunting economic challenges. From the ‘zero Covid’ restrictions shutting down many Chinese cities, to a real estate crisis, a string of dubious policies – all personally identified with Xi – are generating anger and resentment from China’s middle class, stifling economic and job growth and generating a global backlash against Beijing’s imperious, often coercive foreign policy.

For all the fears of a rising China, its weakness may pose as great a risk. Why? The concern is that energy shortages, demographic decline, climate change, declining growth and productivity and debt, exemplified lately by the beleaguered property giant Evergrande but running much deeper, reflect an outdated economic model. Chinese debt is now 290 percent of its gross domestic product. Xi’s crackdown on the tech sector and the property sector, which accounts for some 29 percent of China’s economy, highlighting its fragile economic system.

Xi has reversed Deng Xiaoping’s market reforms, which enabled China’s spectacular growth into an $18 trillion economy. He has walked back from new market reforms promised in 2013, rejected, as too politically difficult. Instead, the party-state has opted for bolstering state-owned enterprises and control of the tech sector and most of the private sector, which have driven growth and innovation. He has opted for techno-totalitarian control over growth.

Some see China as peaking, stuck in the “middle income trap,” unable to transition to a high-income economy. Its tech independence goals appear distant. Xi’s “Made in China 2025” goal of producing 70 percent of its semiconductors appears a mirage, as it produces only about 17 percent of its own chips while importing some $300 billion in chips a year.

As China has been driving some 30 percent of global growth over the past two decades, this has worldwide consequences. In any case, Beijing is mired in a surfeit of profound economic, social, health and environmental problems that suggest China’s continued rise is problematic.

So, what does all this mean for Biden’s democracy-autocracy clash? Neither Russia nor China appears a dynamic political model that many would seek to emulate. But it doesn’t mean that either Moscow or Beijing are less dangerous. Despite Ukraine’s gains, Putin, could still escalate in Ukraine, even use tactical nukes if he thinks he’s losing. Similarly, China is no less likely to coerce Taiwan to reunify, cyber-hack and seek to expand its power and influence.

But it does suggest that our internal rot – the tribal polarization, frequent mass shootings, declining life expectancy and reading and math scores and the 118 candidates from a major political party denying reality and seeking election based on lies – poses a formidable challenge to our democracy.   

As Shakespeare wrote in “Julius Caesar,” “the fault, dear Brutus, is not in our stars, but in ourselves.”

Robert A. Manning is a distinguished fellow at the Stimson Center. He served as senior counselor to the undersecretary of state for global affairs from 2001 to 2004, a member of the U.S. secretary of state’s policy planning staff from 2004 to 2008 and on the National Intelligence Council Strategic Futures Group from 2008 to 2012. Previously, he was director of Asian studies at the Council on Foreign Relations. Follow him on Twitter @Rmanning4.

Tags Autocracy Biden China China foreign policy evergrande India Narendra Modi Russia russian invasion of ukraine Ukraine Vladimir Putin Vladimir Putin Xi Jinping Xi Jinping

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