One of the (many) remarkable American political events of recent months has been the defeat of Liz Cheney in the primary race to regain her Republican seat in Congress. Cheney is republican royalty, at least as far as the Bush/Reagan Republicans are concerned. Her father (see Barton Gellman’s book ‘Angler’ as a reference point) was integral to many Republican administrations, and devious enough that when George W Bush asked him to search for a vice-presidential candidate, Cheney could find no-one better than himself.
In Congress, Liz Cheney’s voting record has been sufficiently red-blooded that there is no doubting her convictions, save that she is a rare example of a Republican resisting Trump sycophantism. She is experienced and learned enough to realise the threat that he represents to American democracy and is making this her stand. In so doing, and in promising to derail a 2024 Trump presidential campaign, Cheney may become the catalyst to split the Republican Party, which like the Tory Party in the UK, is a cauldron of venom and confusion.
If the Republicans were to split, the centre group of American politics might open up, whilst the Trump Republicans could amuse themselves on the fringes of the political establishment and social media. To that end, the coming mid-term elections – which have already been heavily influenced by the Supreme Court judgement on nation-wide access to abortion – will be telling. Interestingly, they may not be the most significant political event this autumn.
Against an international backdrop where democracies are fighting within themselves in an often-existential way, and where in the context of the invasion of Ukraine and tensions around Taiwan, the democratic and autocratic worlds are facing off in an increasingly hostile way, the key event will be the meeting of the Chinese Communist Party in late October, early November.
This event is key because it will likely anoint a third term in government for Xi Jinping, and usher in some important personal changes – notably a new prime minister for China and the retirement of Wang Qishan.
It is an underestimated watershed event in the sense that it marks a phase change in China’s rise from a one-party to a one -man state. If the example of America proves that democracy begets prosperity, China is the powerful counterexample that proves that a controlled, state directed economy can also thrive. The transition to ‘Xi for life’ could upset this, and in this context, there are several considerations to bear in mind (not least with markets looking complacent).
The first short-term one rests on Xi’s need for a show of force in the lead up to the CCP meeting. While we risk assuming that Chinese politicians have a ‘wag the dog’ (see the 1990’s book ‘American Hero’ by Larry Beinhart and film of this title) tendency in the same fashion as their US counterparts, a continuation of strongarm tactics around Taiwan (a blockade or even the seizure of a small island) is a possibility.
A more pernicious and damaging trend within China are the side-effects that Xi’s instincts for control are having – at least three have come to my attention. The first is the debilitating effect on public morale and the economy of the various COVID lockdowns, and the discrete rumblings that these are creating within the broad church that is the Communist Party. The second is the effective split between the Party and the business community that has developed because of Xi’s anti-corruption drives and his promises of a less unequal wealth distribution (‘common prosperity’) and the third relates to the hushing of open, intellectual endeavour and vibrancy of discussion around social and political affairs. By extension, this makes Chinese politics extremely hard to decipher.
In this respect, the great danger for China is that it has someone at the helm who smothers innovation at a time when China needs it most. With the demographic cycle shifting downwards, growth slowing and the property market looking precarious, the risk for Xi is that he fails to deliver on the ‘China Dream’ concept he started expounding in late 2012/early 2013. Bear in mind the sobering fact that youth unemployment in China is now 20%.
In the rise of a country from emerging to developed status, the key variable to watch is continuous improvements in productivity, and in China this is faltering. In that respect the great surprise would be that Xi is a lame duck president by 2027, when Liz Cheney might be starting her presidential campaign for 2028.
I am taking a break for two weeks and this column will resume on September 10th. Have a great week ahead, Mike