For the first time since the end of the Cultural Revolution, the Communist Party of China faces a genuine existential threat, mainly because its mindset has led it to commit a series of calamitous strategic errors. And its latest intervention in Hong Kong suggests that it has no intention of changing course.

CLAREMONT, CALIFORNIA – Some of the Chinese government’s recent policies seem to make little practical sense, with its decision to impose a national-security law on Hong Kong being a prime example. The law’s rushed enactment by China’s rubber-stamp National People’s Congress on June 30 effectively ends the “one country, two systems” model that has prevailed since 1997, when the city was returned from British to Chinese rule, and tensions between China and the West have increased sharply.

After four decades of sacrificing state capacity on the altar of the market, Western countries are facing another large-scale crisis that has revealed the flaws of that approach. The question now is whether the old orthodoxy will finally be replaced.

Hong Kong’s future as an international financial center is now in grave peril, while resistance by residents determined to defend their freedom will make the city even less stable. Moreover, China’s latest move will help the United States to persuade wavering European allies to join its nascent anti-China coalition. The long-term consequences for China are therefore likely to be dire.It is tempting to see China’s major policy miscalculations as a consequence of over-concentration of power in the hands of President Xi Jinping: strongman rule inhibits internal debate and makes poor decisions more likely. This argument is not necessarily wrong, but it omits a more important reason for the Chinese government’s self-destructive policies: the mindset of the Communist Party of China (CPC).The CPC sees the world as, first and foremost, a jungle. Having been shaped by its own bloody and brutal struggle for power against impossible odds between 1921-49, the party is firmly convinced that the world is a Hobbesian place where long-term survival depends solely on raw power. When the balance of power is against it, the CPC must rely on cunning and caution to survive. The late Chinese leader Deng Xiaoping aptly summarized this strategic realism with his foreign-policy dictum: “hide your strength and bide your time.”So, when China pledged in the 1984 Joint Declaration with the United Kingdom to maintain Hong Kong’s autonomy for 50 years after the 1997 handover, it was acting out of weakness rather than a belief in international law. As the balance of power has since shifted in its favor, China has consistently been willing to break its earlier commitments when doing so serves its interests. In addition to cracking down on Hong Kong, for example, China is attempting to solidify its claims in disputed areas of the South China Sea by building militarized artificial islands there.The CPC’s worldview is also colored by a cynical belief in the power of greed. Even before China became the world’s second-largest economy, the party was convinced that Western governments were mere lackeys of capitalist interests. Although these countries might profess fealty to human rights and democracy, the CPC believed that they could not afford to lose access to the Chinese market – especially if their capitalist rivals stood to profit as a result.

Such cynicism now permeates China’s strategy of asserting full control over Hong Kong. Chinese leaders expect the West’s anger at their actions to fade quickly, calculating that Western firms are too heavily vested in the city to let the perils of China’s police state be a deal breaker.
Even when the CPC knows that it will incur serious penalties for its actions, it has seldom flinched from taking measures – such as the crackdown on Hong Kong – deemed essential to maintaining its hold on power. Western governments had expected that credible threats of sanctions against China would be a powerful deterrent to CPC aggression toward the city. But judging by how China has thumbed its nose at the West, and especially at the US and President Donald Trump, this has obviously not been the case.These Western threats do not lack credibility or substance: comprehensive sanctions encompassing travel, trade, technology transfers, and financial transactions could seriously undermine Hong Kong’s economic wellbeing and Chinese prestige. But sanctions imposed on a dictatorship typically hurt the regime’s victims more than its leaders, thus reducing their deterrent value.Until recently, the West’s acquiescence in the face of Chinese assertiveness appeared to have vindicated the CPC’s Hobbesian worldview. Before the rise of Trumpism and the subsequent radical shift in US policy toward China, Chinese leaders had encountered practically no pushback, despite repeatedly overplaying their hand.But in Trump and his national-security hawks, China finally has met its match. Like their counterparts in Beijing, the US president and his senior advisers not only believe in the law of the jungle, but also are unafraid to wield raw power against their foes.
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Unfortunately for the CPC, therefore, it now has to contend with a far more determined adversary. Worse still, America’s willingness to absorb enormous short-term economic pain to gain a long-term strategic edge over China indicates that greed has lost its primacy. In particular, the US strategy of “decoupling” – severing the dense web of Sino-American economic ties – has caught China totally by surprise, because no CPC leader ever imagined that the US government would be willing to write off the Chinese market in pursuit of broader geopolitical objectives.

For the first time since the end of the Cultural Revolution, the CPC faces a genuine existential threat, mainly because its mindset has led it to commit a series of calamitous strategic errors. And its latest intervention in Hong Kong suggests that it has no intention of changing course.