However, even on the basis of the very slender understanding that is common or should be common to all who follow the news, talk to people who have worked in China or with Chinese companies and understands a little about Communism this blog has never accepted the idea that all is rosy there. China with its oppressive political system and an unspeakably corrupt crony capitalism that has not extended beyond the top layer has always seemed to be inherently too unstable to be the leading world economy for some time to come.
The scandal that is unfolding now demonstrates that instability and fills all of us with dread as to which way it might go. Bret Stephens attempts to pull together all that we know at the moment and tries to place it into the perspective of what the Chinese "capitalism" is all about.
But patterns of authoritarian behavior—particularly nepotism, corruption and rent-seeking—are hard to put down in the absence of the accountability mechanisms China so notably lacks: a vigorous free media, periodic elections, economic competition, a bias toward transparency, the rule of law. Instead, the only mechanism the regime has is the purge. It may work in the short-term for eliminating enemies or satisfying bloodlusts. It won't work in the long-term for shoring up the regime's waning legitimacy.
Meantime, China's economy is slowing as income inequality grows—historically an explosive combination. Foreigners in China report that trying to do business is often futile when it isn't outright dangerous. Wealthy Chinese are leaving the country in growing numbers, a de facto vote of no-confidence in an economy whose prospects are supposedly limitless.Not a country on its way to economic dominance; instead it can cause a great deal of trouble.