The legendary general Sun Tzu, playing with the paradoxes, claimed that “invincibility lies in the defense and the vulnerability is in the attack, and often it is the most sudden retreats to lead to the best victories”. Given the sensational retreat just implemented by Xi Jinping, it is possible to think that the art of war, the masterpiece written by the Chinese-philosopher strategist in the fifth century before Christ, can be among his training essays. It would not be possible to explain otherwise the seraphic indifference with which on February 17, the president-autark of China literally overturned the last four to five years of political and economic line. That day, in Beijing, Xi met Jack but of Alibaba and all the main leaders of the Chinese private giants of the hi-tech: from the founder of the Huawei telecommunications giant, Ren Zhengfei, to that of the first producer of byd electrical vehicles, Wang Chuanfu, up to the brilliant developer of the artificial intelligence of Deepseek, Liang Wenfeng.
The ceremony, scenic and pompous, was staged in the heart of Chinese power: The large hall of the people of Beijing, the immense palace on the corner of Piazza Tiananmen which houses the National Assembly and the Congresses of the Communist Party. In its way, the meeting will be remembered as a historical moment, but it was certainly also a strange passage. From almost a luster, in fact, Xi had decreed the abrupt downsizing of the major private entrepreneurs. In many cases he had expropriated them. And some of them had even been brutally ousted from the scene, as happened to Jack but, disappeared from the horizon in the autumn 2020 for the criticisms he had dared to turn to the banking system. As often happens in China, suddenly and mysteriously everything changes again. The founder of Alibaba, the online sales giant with a turnover of 130 billion dollars for 205 thousand employees, is rehabilitated with all the honors and favor of the camera. And the party decrees a new era of fraternal alliance with private entrepreneurs: standing in the large room, XI – who for the occasion had left the paramilitary uniform of Maoista in the closet to wear a peaceful blue jacket that made it almost think of Sergio Marchionne – urged them to “be full of entrepreneurial and patriotic spirit, to raise ideals and cultivate the deep sense of national responsibility”.
So the most communist among the latest Chinese presidents suddenly started to make the “liberal”. During and after Covid, Xi Jinping had relying the dogmas and rules of Marxist doctrine, and had squeezed the noose around all large companies. Today, after the economic braking of the country, the president-Quasi-A-Vita instead asks those same companies to “contribute more and more to the technological promotion and the construction of a modern industrial system”. It seems to hear Deng Xiaoping, the predecessor of XI who in 1992 had launched the slogan “enriching himself is glorious” – decidedly heretical for the leader of a communist country – and had laid the foundations for over two decades of impetuous growth for the People’s Republic. Already. But why does Xi decide his retreat today? The real reason are the commercial duties imposed and threatened by the new American president Donald Trump: in early February a first 10 percent of taxes on the Beijing was in force, and now Washington threatens a 25 percent tax on electric cars made in China, who are massacring western competition. Overall, the new duties would set up a very hard blow to a country for a while in slowing down. And Xi knows well that for the popular Republic private companies remain fundamental, because – data of the latest report by its National Statistics Institute – they contribute more than 60 percent of GDP and tax revenues, to almost half of the foreign trade and eight tenths of urban employment. In 2024, the Chinese gross domestic product officially grew by 5 percent, the lowest measure of the last decades, and in 2025 it will still slow down to 4-4.5. The fault of the abrupt braking of internal consumption, whose average annual growth was 10-15 percent between 2014 and 2019, but since then it has been more than halved. And the cutting of interest rates, decided by the Central Bank at the end of October, was of no use.
Today, in short, the only real strength of the People’s Republic remain its exports: In 2024 they produced a commercial surplus of 992 billion dollars, made mainly for the United States (361 billion) and Europe (247). If Trump’s duties ended up blocking the export gears, in short, for Beijing they would be serious trouble. This explains the unexpected “called to arms” of XI to entrepreneurs. The president tries to put the national economy back on the tracks, partly derailed precisely for his policies of the last two to three years. XI, who has been in power since 2013, has never been able to face the disastrous real estate crisis, which has softened China since the end of 2016 with its deadly excess of offer: the prices of the houses continue to descend and the failures of the large companies in the sector continue without stopping. It is as if the president-autark mixed excesses of authoritarianism and decision paralysis in itself. XI managed the pandemic with iron fist, sending the army to segregate entire cities and large factories, and braking the fundamental port activities throughout 2020 and for most of the following two years. Xi has moved even worse in the international field, exercising growing military pressures on Taiwan and the Philippines, and decreasing the abolition of democratic freedoms and the arrests of dissidents in the “normalized” province of Hong Kong. In doing so, however, the large western companies have frightened and induced to escape.
In 2024 foreign direct investments in the People’s Republic collapsed by almost 170 billion dollarsa drop near 30 percent. And the trend continued this January, with a new 13 percent reduction. Although inclined to self -acting, XI, however, seems incapable of managing internal problems. Starting from the demographic crisis: the downhill rates have meant that in 2024, for the first time for at least 70 years, the Chinese population has sued 1.4 million units, giving India the global record. Meanwhile, youth unemployment remains above 17 percent. And the public debt explodes, especially in the provinces. The actual measure of the indebtedness of Chinese local authorities is managed as a state secret, but the economic weekly The Economist estimates exceeds 8,400 billion dollars, so much so that in October the government had to launch an 840 billion plan to start to restart it, more or less than a tenth. The debt, however, begins to be a problem also at the central level, in part for the impressive increase in military spending (see the box on the left).
Will Xi Jinping make it? We will see. Certainly, pending the duties of Trump, who are already much worse for him of the classic sword of Damocle, the Chinese president will do well to put his beloved Marx in the drawer. Better to re -read some chapters of the Sun Tzu strategist.
