Evidently, the latter rather than the former. Hong Kong’s impressive public protests, and the shift of Taiwan’s electorate away from cross-straits relations, are consequences of China’s slide back to a full-set dictatorship. But Xi and his colleagues are looking at a wider correlation of forces. Ever since the 2008 global financial crisis, through the Euro crisis of 2011 and now the coronavirus pandemic, they are tempted by a different narrative: the decline of America and more generally of Western democracies, with each crisis producing a new balance of forces that runs in favor of China’s system. In 2008, Karl Polanyi’s The Great Transformation (1944) was cited at China’s Institute of Contemporary International Relations (CICIR), the State Security’s think tank: Polanyi had predicted a backlash from the market economy through successive crises. Liu He, reputedly an economic liberal and arguably the most talented expert among top leaders, edited, in 2013, a lengthy study that points out that the two world crises – 1930 and 2008 – have actually increased China’s share in the global economy (Liu He, ed., Comparative Study of Two World Crises, China Economic Publishing House, 2013, in Chinese). Xi Jinping has very recently explained to a student audience in Xi’an how "it’s been 70 years, now we are strong, now we are rich (…) the great steps in history were all taken after major disasters. Our nation, it rises and transforms through hardship and difficulty. The Chinese people deservedly take pride in this form of cultural self-confidence".
Xi’s strategic brand is on display in the treatment of the Hong Kong crisis. He knew how to stop the push for an extradition law in October, explaining to a captive Central Party School audience that policy should be inflexible in principle, but flexible on tactics. The following month came the CCP’s 4th Plenum – focused on legal affairs, and among its published outcomes, little-noticed at the time, was the completion of institutions and mechanisms for the preservation of national security in the HKSAR. Xi Jinping pauses, but rarely if ever steps back. The decision announced at the recent NPC session makes an extradition law wholly unnecessary, although that will also likely come in due course. The probable inclusion of "terrorism, separatism, and interventionism" in the coming law is so wide, it makes Hong Kong as dangerous as mainland China for critics: this applies particularly to the Taiwanese whose main flight connection to the outside world is via a stop-over in Hong Kong.
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