China has perfected a system that can no longer see itself; its only remaining mirror is the world beyond its borders.
For most of its modern history, the Chinese Communist Party has reformed only when it has had no other choice. Renewal came not from confidence but from collapse. When systems broke down, when control failed, when embarrassment could no longer be contained, change arrived—usually disguised as wisdom rediscovered. Weakness was never the enemy of reform but its pre-condition.
Before paramount leader Deng Xiaoping announced economic liberalisation, local cadres had already acted under cover of desperation. In the mid-1970s, officials in the provinces Anhui, Sichuan and Heilongjiang, watching famine return to the countryside, quietly allowed households to contract land—violating collectivist doctrine. These experiments were condemned as capitalist tendencies but starvation made suppression impossible. By the time Deng endorsed the household responsibility system, it was already widespread. Beijing did not design reform; it ratified rebellion.
This pattern held through the 1980s. Facing fiscal collapse, the central government cut deals with provinces through a local financial contracting system, effectively legalising local governments’ retention and spending of local revenue on administration, infrastructure and enterprises, instead of remitting it all to the central government. What began as a stopgap became the foundation of fiscal federalism and local entrepreneurship. When the dual-track pricing system of the late 1980s spawned corruption and inflation, protests forced the State Council to accelerate price liberalisation even as the political system hardened after the 1989 protests, including the massacre in Tiananmen Square. In each case, the party moved only after it had lost the ability to suppress failure.
Throughout the 1990s and early 2000s, reform remained reactive. The success of coastal zones—including Shenzhen, Zhuhai, Xiamen and Pudong—stemmed from local defiance of central prohibitions. Their results embarrassed Beijing into acceptance: violation became orthodoxy. When state banks nearly collapsed in the mid-1990s, new ‘policy banks’—state-owned financial institutions established in 1994 to undertake non-commercial, government-directed lending—and partial financial liberalisation followed. When mass layoffs sparked tax riots in the countryside, Beijing abolished agricultural levies, an ideological reversal disguised as benevolence. The 2003 SARS epidemic forced transparency laws after local cover-ups humiliated Beijing; pollution protests in the mid-2000s spurred green-tech subsidies; and the 2015 stock-market crash produced new regulatory oversight. Even the early chaos of the Covid-19 pandemic briefly revived the old reflex of improvisation around crises as local doctors and municipalities acted before central sanction. But the lesson was unlearned and Beijing’s ‘zero-Covid’ policy hardened into an exercise in absolute control.
Every reform began as an attempt to smother a crisis that censorship had failed to contain. China’s adaptability was not institutional foresight but the by-product of friction: the hum of local improvisation, bureaucratic rivalry and social protest that sent real information upward before it could be filtered into doctrine. That noise was the CCP’s intelligence system and it kept the party alive.
Under Xi Jinping, that noise has gone silent. The party has achieved what its predecessors could only imagine: a perfectly coherent chain of command, a system without mirrors. In doing so, it has disabled its own capacity for self-correction.
Fiscal relations that once involved bargaining have been reduced to quota compliance; provincial cadres now second-guess ideology rather than interpret reality. The semi-permeable world of media and academia—including leading business newspaper Southern Weekly and the Chinese Academy of Social Sciences—has been sealed. Public discourse has collapsed into monologue.
The great technocratic institutions—such as the People’s Bank of China, the National Development and Reform Commission and the Ministry of Finance—no longer shape priorities; party commissions dictate them. Even the private sector, once a hotbed of spontaneous energy, has internalised self-censorship as a survival strategy. Across all these realms, the governing instinct is the same: the elimination of contradiction as a principle of rule.
The impulse to harmonise reality until it flatters doctrine has transformed information into affirmation—smooth, uniform and useless. When every report confirms success, the system loses its ability to register pain.
The result is an environment in which errors cannot accumulate into crises because they are never allowed to coalesce into facts. The party-state has perfected intra-systemic insulation. The bureaucracy upwardly reports success, the press repeats it and social media algorithms polish it into consensus. It is not that Beijing believes its own propaganda; it no longer has many other sources of knowledge. The party under Mao also suppressed feedback, but Xi’s achievement is to make that suppression permanent—digitised, predictive and efficient. The Cultural Revolution burned out its machinery of control; Xi’s system tends it like a thermostat.
And yet there remain realities that cannot be domesticated, facts that exist in the open air. Satellites and foreign intelligence can monitor military actions, including border clashes, naval manoeuvres and exercises. No matter how the official numbers are massaged, markets and foreign observers can use prices and imagery to triangulate the truth of macroeconomic signals, such as unemployment, capital flight, energy consumption and freight traffic. And, measured against physical metrics it cannot rewrite, China cannot alter the story of transnational phenomena—climate emissions, pandemics and global supply chains. For example, when Covid-19 genomes were sequenced abroad, the extent of the outbreak revealed itself regardless of narrative.
These are the few remaining mirrors in which the regime can still see its reflection, distorted but inescapable.
Xi’s fear is not collapse but humiliation. His legitimacy rests on the promise of dignity—that China will never again be mocked, diminished or dictated to by outsiders. The Soviet Union’s implosion is treated less as a moral failure than an international embarrassment. In such a schema, the worst fate is not poverty but ridicule.
This fear of humiliation explains both the projection of strength and the obsession with control: power, in this vision, exists to pre-empt shame. Hence Xi’s preference for overreaction abroad and overregulation at home; both preserve the image of competence. Where Deng feared chaos, Xi fears laughter.
The deeper consequence is that the CCP now learns primarily through embarrassment abroad rather than contradiction at home. Internal feedback has been sanitised beyond utility; external feedback arrives only as shock—a sanctions regime, a diplomatic crisis or a capital exodus. Even the reversal of the zero-Covid policy came not through internal deliberation but through simultaneous domestic unrest and international scrutiny. The party has replaced domestic turbulence with international friction as its last source of reality. What was once a self-correcting autocracy has become a sealed system that only the world can correct.
China under Xi is not on the brink of implosion but of something subtler: sclerosis. It can manage stagnation with extraordinary competence but cannot escape it. The country still produces marvels—such as electric vehicles, solar grids and advances in AI—but these are refinements within a closed order rather than breaches of it. This equilibrium could last for several generations: too disciplined to fail, too fearful to transform.
In the past, China’s crises arrived from within—the revolt of peasants, the panic of technocrats or the shame of visible failure. Today they will come from without, when external forces impose the reflection the party has forbidden itself to see. For now, Beijing governs calmly. That calm will likely endure for several decades. But it is the calm of a room with no mirrors, a silence so total that only the echo of the outside world can break it.