Wednesday, February 12, 2020
Once the full power of the Communist State has been summoned, some Chinese observers fear, it will be hard for Xi to put the genie back in the bottle. China agreed to some key reforms as part of the trade truce with the Trump Administration, including opening its financial markets to American financial institutions. The reform camp inside China’s government now worries that the crisis might derail these reforms. If that happens, China’s economic growth will slow as private entrepreneurs keep their heads down.
The coronavirus epidemic is a shock to China’s political system, but—unless the death toll spirals out of control—it probably is a shock that China’s system can absorb. But if China veers away from market reforms and relies on the brute power of the Communist apparatus, its economic momentum will weaken.