Why China won't reform
The leadership of the Chinese Communist Party (CCP) fears chaos and loss of control more than anything else, and this explains much of its seemingly erratic behavior.
The matter goes back to be bargain that the CCP has struck with the Chinese people. The deal is this: the Communist Party gets complete political control over the country in return for ever-increasing standards of living. This means no elections, no demonstrations, no rule of law, and no dissent from below as to how the show is run. The CCP is an illegitimate regime and can stay in power only if it can continue to pay off economically.
Up until now this has proven to be a win-win situation. Of course, it was always predicated in U.S. allowing China to lie and cheat on every trade agreement it ever signed and to turn a blind eye to stealing our technology. This worked for the past 25 years. But now the Chinese economy is facing strong headwinds which throw that arrangement arrangement into doubt. These include an American president who will not play the patsy to China's predatory trade practices and its massive theft of U.S. intellectual property and the worldwide blow-back from China's Wuhan virus.
If China's economy slackens enough, the bargain between the CCP and the Chinese people will fall apart. This could literally lead to revolution triggered by rising expectations. That is, the rise in prosperity and freedom that China has experienced in the past twenty years has led people to believe they can continuously improve their lives. They also seek ever more amounts of political freedom. People in poor and oppressed countries like China hope for a sliver of the prosperity, and then they get a taste of it, they want more. When these hopes and dreams are frustrated, revolution can ensue.
Could reform be the answer to the dilemma that China faces? That's certainly the option the foreign policy gurus at Foggy Bottom would suggest. It sounds ever so logical to them. But not to the Chinese communist leadership. They may be evil to the core, but they're not fools. By attempting to reform and loosening up control, the CCP rightly fears what is known as the Tocqueville Paradox.
The Chinese leadership, especially Vice President Wang Qishan, piqued interest in Tocqueville because he read L'Ancien Regime, and warned fellow cadres that reform could speed up the demise of the system itself. This is why Chinese leaders like Wang read Tocqueville: They are aware of the risks embedded in reforming a very rigid, brittle system.
Historically, the leadership of the Chinese Communist Party is also informed by the Gorbachev experience. They blame the collapse of the Soviet Union on Gorbachev, not on more fundamental causes that preceded him. So, they're informed, in many ways, by this phenomenon identified by Tocqueville, that a bad system is at its most perilous moment when it tries to be better.
Accordingly, the CCP believes it cannot reform the Chinese economy and financial system without being consumed by its own population. Given this mindset, it is clear that no meaningful trade agreement between the China and the U.S. is possible. That's because the U.S. demands are premised on China opening up, and the Chinese leadership firmly believes it could not survive that. The Chinese may agree to this or that on trade, but it's all a lie. They have no intention to living up to any deal. To believe otherwise is beyond foolish. China feels it's better to string President Trump along and hope for a China-friendly President Biden in the White House 2021. But even that will only buy China some time.
The CCP has little choice but to look inward, stoke up nationalism, and blame outsiders, particularly the United States, for the country's problems.
It is through this prism that recent Chinese actions such as blaming the U.S, for the Wuhan virus, its crack down on Hong Kong, its heightened aggressiveness in the South China Sea, and Xi's belligerent rhetoric to the Chinese army to prepare for war should be looked at. The CCP is in survival mode, and that makes China especially dangerous now.