The 20th Central Committee of the Communist Party of China recently held its Fourth Plenary Session. I would not blame you, dear reader, if your eyelids grew heavy upon reaching the end of that sentence. But it is in these lugubrious sounding affairs that an understanding of China’s epoch-defining rise lies. The Chinese authorities are above all else, planners. They are also – counterintuitively for an authoritarian outfit – pivoters; course correctors. And it is in these meetings where policy-past is evaluated, and policy-future devised, that the answer to that million-yuan question: "How did they do it?" resides.

How did China, a country that was on par with India on most economic indicators only a few decades ago, become so ascendant?

For all the years, 2002-2009, that comprised my first innings in the erstwhile Middle Kingdom, there was a determined band of western commentators who persistently predicted the imminent collapse of China regardless of the plentiful evidence to the contrary. China’s state-led capitalism a.k.a. socialism with Chinese characteristics in the local argot, simply did not compute for pundits whose worldviews were shaped by Washington Consensus axioms.

The oft repeated orthodoxy was that in the absence of political liberalisation, China’s liberalising economics would create an untenable contradiction. The Chinese Communist Party was attempting to square a circle. It would not succeed unless a list of prescriptions that included political democratisation, full financial liberalisation and abandonment of industrial policy, were heeded.

Well, we now know how that panned out. The authorities in Beijing did not pay heed and today, China leads the world by a huge margin in production capacity and green energy. It dominates global supply chains. Beijing’s military strength is bolstered by huge defence budgets, cyberwarfare capabilities and the world’s largest navy by ship count. Shenzhen has emerged as a true rival to Silicon Valley as an incubator for tech entrepreneurship. China’s GDP per capita is about US $13,500. In 2005, when I was writing about these things for the Hindu as their China correspondent, it was US $1,700.

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The smorgasbord of superlatives – biggest, fastest, best – that contemporary China lays claim to, is not the outcome of the wave of some authoritarian-gripped magic wand. It is rather, at least in substantial part, the cumulative outcome of the unsexy work of party plenums and the five-year plans devised through their deliberations. The product of a planning-coordination-evaluation cycle that involves tinkering, weighing up and either discarding or doubling down.

The self-correcting nature of party planning has plenty of examples in the Ghost of Five-Year Plans past. The 11th plan (2006-10), for instance, had the authorities pirouetting like ballroom dancers, away from uncontrolled heavy-industry expansion to controlling energy consumption per unit of GDP. This pivot resulted from a diagnosis of the growth model as being overly energy-intensive and polluting. Specific targets were set, such as a reduction of energy intensity per unit of GDP by 20% during the plan period. And abracadabra: a raft of energy-efficiency programs including small‐plant closures and buildings using energy‐efficiency codes exceeded this goal.

Caveat: This is not an academic analysis, so excuse some of the hyperbole. In point of fact, there is usually less abracadabra and more painful slog when it comes to policy course corrections in China. And the Chinese authorities tend to rebalance only once the excesses of a particular direction become too egregious to ignore, rather than nipping the excess in the bud.

Anti-pollution measures date back to the 1990s, well before the 11th Five Year Plan. But it was only then, once the environmental impact of China’s growth model had become untenable, that we ecological goals work their way into official targets in a way that incentivised meeting them somewhat on par with goals for GDP growth.

Today, China is a leading producer of pollution-abatement equipment, electric vehicles, solar panels and wind turbines. The country’s power consumption in the single month of July this year – a record-breaking 1.02 trillion kWh – exceeded that of Japan’s annual equivalent. It marked the first time any country’s monthly power usage surpassed this threshold and was an 8.6% increase compared to July 2024.

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From the perspective of much of the world, including its vaunted liberal democracies, the fact that China’s Five-Year Plans don’t just state vague goals, but often lead to measurable action is as surprising a scenario as one where pigs grow wings and fly about. Which is why a lot of the world seems to be in denial about it – ergo "the coming collapse of China" theory that somehow continues to stay alive.

None of this is to say that China does not face some serious challenges. These range from needing to find a tool kit that can address overproduction, youth unemployment, sluggish consumption, demographic shrinkage and real estate market contraction.

The latest Five-Year Plan blueprint does acknowledge that domestic consumption needs a boost, although it was low on specifics, while indicating a doubling down on a focus on industrial strength and advanced technologies.

"New demand will lead to new supply, and new supply will create new demand," the report said. This might sound like obfuscation, but in China action often speaks more articulately than words – the opposite of the rhetoric-action dynamic in most electoral democracies.

I leave you with a short extract from my 2008 book, Smoke and Mirrors – an analysis that still holds.

"That contemporary China was rife with contradictions was undeniable. Its ruling party espoused a communist, egalitarian ideology while presiding over the emergence of one of the world’s most unequal societies. Social and economic freedoms chaffed against continued political control. The contradictory needs and aspirations of the urban middle class jostled against those of peasants and migrant workers. From architecture to religion, the uneasy coexistence of ancient tradition, enforced modernity and resurgent tradition was apparent for the looking....

But based on empirical evidence as opposed to ideological axioms that claimed one or the other inevitable future for China, the CCP like most ordinary Chinese, was surprisingly adept at negotiating these contradictions. China’s government may have been walking a tightrope but the Chinese were famously skilled acrobats.

Rather than inevitable collapse or democratisation it thus seemed to me just as likely that China would continue successfully along its present course of economic growth and reform coupled with only minor political change, for the near to mid future.

Over the course of the last 30 years China’s authorities had demonstrated time and again their ability to identify and respond to key problems from the disaffection embodied in the student protests of 1989 to more recent crises caused by corruption, income inequalities and environmental degradation."

 

Pallavi Aiyar is an award-winning foreign correspondent and author. She writes a weekly newsletter on global travel and culture, The Global Jigsaw.

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