Perhaps there is no end to history
"The End of History," a 1992 book by Francis Fukuyama, claimed that liberal democracy — the values and beliefs of the European Enlightenment which informed many of the major Western powers — was to be the last form of governance. Fukuyama argued that liberal democracy had "won" the ideological war, and it was, essentially, the peak form of government. If history was the story of the development of ideologies and governance, then liberal democracies were the final evolution.
This belief, as naïve as it seems to us, was understandable in 1992. The largest economy in the world was the United States, a liberal democracy. Kruschev had predicted that “We will live to see you buried,” but it had been the United States watching over the fragmentation and funeral of the Soviet Union. Boris Yeltsin, the new Russian president, was amenable to the United States, and the U.S. appeared to be on track to become a friend to Russia. The second largest economy was Japan, an incredibly powerful economic machine.
But in the two decades that followed, this paradigm was destroyed. Japan stagnated more than ever expected, seeing three decades without economic growth. In Iraq, the United States betrayed its liberal principles and pushed away its allies in Europe. The economy that grew to eclipse Japan was the People’s Republic of China, an authoritarian regime more in the image of the Soviet Union or Yugoslavia than the United States, Japan, or Korea.
This is a lot of background for an event that happened in the last few years. Xi Jinping, the current head of the Communist Party of China, the head of the People’s Liberation Army, and now the President of the People’s Republic of China (PRC), has won an unprecedented third term. And while that’s a lot of titles for one man, it represents the strength of his power among the Chinese ruling class. Xi isn’t simply one part of the cog that is the government of the PRC — he is the government.
His government is facing unprecedented crises. Upon pushing through his recent cabinet appointments, Xi is facing slowing economic growth, and significant problems with the housing sector. The PRC has cultivated agreements and relations with countries across the world, but the massive Belt and Road Initiative seems to be wildly underperforming. And as a manufacturing economy, China faces its biggest threat yet — the country recorded population decline, the first time that has happened since a famine in 1961. Demographics are a ticking clock for the manufacturing economy that sustains China. With new policies, Xi has attempted to increase fertility, bring back expats, and rebuild the economy; but unless things change, workers will become a finite resource. When the current working class retires, there will be a much smaller pool paying into the social services necessary to take care of them.
Xi has announced moves to stem some of the bleeding. First, he wants to take care of investors and make China seem less of a threatening place to park your money. After the three month disappearance of Chinese billionaire Jack Ma, many investors are less than thrilled to trust the country with their assets, and China has started to advertise itself as business friendly in an effort to bring those investors back. With large money managers steering clear of China’s assets, this change should bring cash influx to the economy — money that can be used for more infrastructure and investments to keep money flowing. China has been losing money on high speed rail, and without funding to keep it afloat, the lines — and the staff that maintains them — stand to lose their jobs.
What remains, however, is the decreasing population. China hopes to attract immigration like the United States, the only major power currently projected to see a population increase in the next 50 years. If China’s population truly has peaked, or if the reports of overcounting are true, then the country will need to transition, fast, to automation and a service economy. Otherwise it runs the risk of a worker-based manufacturing economy without the workers to base it on. While China has increased the number of children legally allowed, this hasn’t done much to alleviate the very low birth rate in the country.
Finally, there’s the thorny issue of Taiwan. Taiwan, as of now, remains the largest and most important semiconductor manufacturer in the world. It houses the best trained, best experienced, and best managed plants, and is responsible for a huge amount of the circuitry that goes into every single everyday object.
That makes it a very big problem for the U.S. and for China. For China, Taiwan represents the old government the Chinese Nationalist Party (Kuomintang, or KMT). While the KMT lost power to the more pro-independence Democratic Progressive Party (DPP), China still claims Taiwan as Chinese territory, and it has forced many international groups to label the country as “Chinese Taipei.” However, the U.S. has maintained strategic ambiguity on Taiwan, refusing to acknowledge it as a country, but still working with it as an autonomous region of China. After claiming U.S. suppression, increasing excursions into Taiwanese airspace, and saber-rattling at U.S. officials visiting the Island, Xi now faces the reality that the U.S. may defend Taiwan in the same way that it has defended Ukraine.
With that in mind, as well as the fact that China does not possess the military capability to assault Taiwan, the island has remained a serious problem. Xi announced the need to suppress pro-independence voices in Taiwan at the end of the National People's Congress (NPC) meeting this month, and by replacing much of the reformist or liberal voices in his cabinet with hardliners, may have closed off a diplomatic solution to the island altogether.
China is currently the largest autocratic regime in the world, with the Russian Federation in close second, and in recent years, has become more and more confrontational against the United States. With Xi receiving what seems to be the go-ahead to hold power indefinitely, this is the newest iteration of the Soviet Union — and Fukuyama’s End of History is put further and further in the distance.