It is is perilously difficult to fuse free markets with autocratic political control.

I have argued since Ping's reforms that there is an inescapable tension between free markets and despotic governance.  They can function in tandem for a while but at some point either the free market withers or the despotic governance model reforms and becomes more inclusive.  The only question is how long it takes to get to that point of choice.

From The Bill Is Coming Due for China’s ‘Capitalist’ Experiment by Michael Hochbereg and Leonard Hochberg.  Their not quite making my argument but the issues are related.  

Premier Deng Xiaoping's economic liberalization reforms in 1981 w ere the beginning of the brave experiment.  It has been a huge success, known but insufficiently celebrated.  400 million raised our of absolute poverty.  Forty years of increasing prosperity.  We are, however, at the top of the S-curve.  China is reaching the limits of free market growth in a controlled governance model.

Xi Jinping has been the paramount leader of China since 2012, a period during which growth slowed and power has been increasingly centralized.  It is Xi who will navigate the reset between free market success and centralized government.  All the signs are that Xi has already made the choice of increased central control at the expense of free markets.  The Hochberg's explore what this might mean for the international business community.  

These are going to be trying times.  Had China elected to loosen its political central control and allowed the continued market freedom and expansion, it would have been tricky and delicate.  But the global community would have been an ally in trying to help facilitate that transition.  

As it is, nobody gains from increasing central control in China.  The economy will suffer and Chinese citizens will be frustrated and resentful while the Chinese government will suffer global partnership reverses which will rankle.  Potentially intra-China tensions will rise as well.  These will be a time of difficult challenges for the Chinese leadership.  They have chosen the path of centralization.  It will be a rocky process for which everyone should brace.  

And as if that were not challenging enough, all this happening within a demographic constraint - can they get sufficiently rich before they get too old.