It’s the technology, stupid
Xi Jinping has a high tolerance for a weaker economy – so long as China improves its innovative capacity.
That’s our key takeaway from examining recently declassified internal remarks.
- In June, the Party published a collection of Xi's wise words on technological self-reliance from 2013 to 2022.
Right from the off, Xi was convinced that a country's strength lies in technological capacity, NOT economic scale. Here's the big man on March 4, 2013:
- “Historical facts have shown that a big economy doesn’t mean a powerful economy. If a country is persistently lagging behind others, the fundamental reason is that its technology is lagging behind.”
Six months later, Xi told his Politburo colleagues to make boosting innovation priority #1:
- “We must correct the practice where officials talk about technological work as something important, deprioritize it in reality and even ditch it when they get busy.”
The big man was ahead of the curve on this one.
- US efforts years later to restrict China’s access to critical technology showed that Xi was right to pursue tech self-sufficiency.
Get smart: China's pursuit of innovation-driven economic restructuring predates the Xi era. But the process was often disrupted as leaders scrambled for short-term economic stability via investment-led stimulus.
- Xi appears unlikely to follow that path.
Bottom line: Xi is far less focused on economic growth than previous Chinese leaders. That makes a big stimulus package unlikely in the near term.