The Third Revolution | Elizabeth C. Economy

Summary of: The Third Revolution: Xi Jinping and the New Chinese State
By: Elizabeth C. Economy

Introduction

Dive into the world of Chinese President Xi Jinping and his vision of the ‘Chinese Dream’ as we explore Elizabeth C. Economy’s insightful book, ‘The Third Revolution: Xi Jinping and the New Chinese State.’ Unravel the intricacies of Xi’s life, from his father’s imprisonment to finding his footing within the Chinese Communist Party. We take a closer look at the four main strategies underpinning Xi’s Third Revolution: centralized authority, a more active state, tighter restrictions on foreign influence, and a bigger presence on the world stage. In the face of dramatic shifts and inherent paradoxes, how does Xi maintain his power, and what can we learn from his approach to Internet freedom, economic growth, environmental issues, and global leadership?

Inside Xi Jinping’s “Chinese Dream” Revolution

China’s President Xi Jinping, from a young age, witnessed the highs and lows of his country’s economy and government. When he assumed the office of the presidency, he called for a “Chinese Dream” revival, which embraced economic growth, military might, and social welfare. Xi’s revolution aimed to make China the greatest nation, featuring centralized power, a strict supervision of foreign influence, and increased global presence. Despite the convincing aspirations, paradoxes arise from China’s closed-off approach to many aspects of modern society. Xi’s tight control over the internet may harm his credibility, but he believes it to be necessary irrespective of opinion.

China’s Economic Success and Challenges

China has achieved impressive economic growth with double-digit GDP and lifting millions of people out of poverty, resulting in 200 million joining the middle class. However, China must transition from low-wage manufacturing to creativity, high-end manufacturing, and services, and increase consumer spending, which only accounted for 37% of GDP in 2014. Additionally, China’s aging population and resistance to privatization could pose challenges for economic growth. While the government plans to invest heavily in research and development to meet economic goals, the nation’s pension system might face a $12 trillion shortfall without reform in the near future. Despite these challenges, China continues to be an important global player and recognizes the need for economic reform to sustain its position.

China’s Innovation and Invention Problem

China has excelled in adapting products to fit consumer needs, but it has fallen short in terms of innovation and invention due to a lack of protection for intellectual property rights and a culture focused on stealing ideas. Heavy state involvement in technological development has also hindered progress and efficiency, as seen in the case of China’s auto industry. The government’s bias against foreign competition and commitment to subsidies act as further stumbling blocks in producing products that can compete globally.

China’s Environmental Catastrophe

China’s heavy reliance on coal has caused widespread pollution and water shortages that are now a drag on the country’s economy. The country’s faulty pipes leak about 20% of its water supply, leading to serious water shortage and environmental contamination. Moreover, industries are known to be water wasters, and China has done a poor job of conserving its natural water resources. Consequently, pollution and water shortages have contributed to the rise of “cancer villages,” towns with high rates of cancer, many near polluted waterways. While solutions such as fracking for natural gas could help reduce China’s reliance on coal, they come with their own issues, including a water-intensive process.

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