China faces political succession uncertainty, economic collapse
New Delhi, Oct 26
China faces mounting risks from political succession uncertainty, structural economic slowdown and weakening fiscal capacity, a new report has said.
The report from London-based publication Tomorrow's Affairs said Chinese President Xi Jinping's consolidation of power and elimination of potential rivals could create succession risks in the future.
Xi Jinping's decimation of the state, party, provincial, and military leadership has created resentment, and former officials, previously humiliated, could create havoc when the time comes for Xi's succession, it argued.
The publication said periods of apparent stability followed by turmoil have recurred throughout Chinese history. Economic conditions are also becoming more challenging, with concerns about population ageing and a prolonged property market downturn.
Further, Chinese exports are facing threats from policy responses of the United States and Europe, the report said.
The taxes excluding social insurance contributions collapsed by nearly six percentage points between 2012 and 2025, from 18.4 per cent of GDP to 12.6 per cent, the publication noted.
China has historically relied heavily on non-tax revenues rather than direct taxation, adding that a similar trend was seen in the Ming and Qing dynasties before their downfall.
"China has never managed to raise sufficient sums of money via personal income taxation, even during a period of extraordinary economic vibrancy," the publication argued.
It noted the government's unhealthy reliance on nontax revenues, which made it lacking for options when such revenues dried up. The Chinese state could also suffer from a lack of resources to exercise power domestically and project it externally.
"China's entire growth and fiscal model, along with the social contract between the state and its citizens-coveted stability and material prosperity for restricted freedom and muzzled voice-may be in trouble," the report said.
— IANS
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