The man at the podium wore a dark suit and a red tie. Behind him sat rows of dignitaries in front of a vast wall, draped in gold, from which protruded a yellow hammer and sickle, framed on either side by 100-foot scarlet flags. In front of him, in the cavernous, red-carpeted hall, sat more than 2,000 delegates to the 20th People\u2019s Party Congress in 2022. They listened attentively and took notes like their lives depended on it, which they may well have. The man, Xi Jinping, spoke for over two hours, during which his rapt audience occasionally erupted in ecstatic applause. The moment was both bland in its authoritarian predictability and a sea change in Chinese politics.<\/p>\n
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This article is adapted from Autocracy 2.0: How China\u2019s Rise Reinvented Tyranny<\/i><\/b><\/a> (Cornell University Press, 244 pp., $29.95, November 2025). Xi was formally taking office for the third time, after altering the Chinese Constitution to make it possible. The move was a striking rejection of Chinese Communist Party (CCP) norms that had been designed to protect China from the personalism associated with Mao Zedong\u2019s rule. The political and economic reforms of the post-Mao era supported China\u2019s stunning economic rise from poverty to the world\u2019s second-largest economy and succeeded in fostering innovation.<\/p>\n Many observers argue that autocracies are unable to cultivate innovation, which is essential for sustaining growth.\u00a0But by pursuing what I call \u201csmart authoritarianism,\u201d China\u2019s leaders, influenced by the experience of Singapore, adapted their tools of authoritarian control for a globalized information age. Recognizing the tension between political control and the conditions needed to encourage innovation, the CCP governed with more inclusive economic policies and low-intensity repression.<\/p>\n China\u2019s smart authoritarianism, alongside a massive innovation push, led to its rapid rise from technology copycat to leading innovator. The 2025 Global Innovation Index put China within the world\u2019s top 10 most innovative countries, past France, Germany, and Japan. Chinese innovation is translating to meaningful commercial success, even dominance, in a number of high-tech sectors. And it is also shaping the military balance vis-\u00e0-vis the United States\u2014particularly in artificial intelligence, telecommunications, supercomputing, and quantum communications.<\/p>\n But when Xi stood before that giant gold hammer and sickle, many experts argued that by flouting term limits, centralizing power, and doubling down on statist economic policies, he was moving away from smart authoritarianism toward policies that would stifle innovation. Some economists, such as Nicholas Lardy and C. Fred Bergsten, were cautiously optimistic, believing that China could still experience growth. But many other observers expressed deep skepticism about the country\u2019s future economic growth and great-power status, anticipating Chinese decline.<\/p>\n The skeptics are correct that China\u2019s economy faces real challenges to future growth\u2014and that a \u201cneo-authoritarian\u201d turn may be one of them. Indeed, China\u2019s ability to remain a superpower depends on its continued ability to compete at the technological frontier\u2014which depends on the CCP\u2019s continued management of the tensions between authoritarian control and the freedoms and openness of a modern, globalized economy.<\/p>\n Chinese President Xi Jinping delivers a speech at the 20th National Congress of the Communist Party of China in Beijing on Oct. 16, 2022.Lintao Zhang\/Getty Images<\/span> <\/p>\n<\/div>\n Pessimistic views of China\u2019s economic future often point to headwinds slowing its economy. These headwinds\u2014including demographic challenges, environmental damage from rapid industrial rise, and the risk of financial crises\u2014are well-established causes of growth slowdowns in rising powers, and they indeed pose challenges for Chinese leaders to address. Yet slowing growth does not necessarily suggest decline. Economists remind us that all rapidly rising economies slow, with successful countries settling in to around 1 or 2 percent annual growth.<\/p>\n<\/div>\n As China faces its headwinds, the question is whether its economic growth will continue even at these much-reduced levels. In some respects, leaders have positioned the country well by investing heavily in human capital, which economists find key for successful transitions to innovation-based growth. The CCP has also weathered numerous challenges that skeptics predicted would weaken the regime or harm the economy. The party, analyst Jonathan Czin argues<\/a>, \u201chas demonstrated itself to be an incredibly effective learning institution.\u201d<\/p>\n To compete against the United States, China needs neither to surpass the U.S. economy nor even to reach high-income status. Historically<\/a>\u2014notably in the case of the Soviet Union\u2014great powers often have only a fraction of the leading state\u2019s economic might yet nonetheless can engage it in a dangerous security competition. But to compete effectively, China must remain at the global technological frontier. This will require the CCP to continue managing the tensions between staying in power and providing the conditions that foster innovation\u2014a feat that many skeptics doubt the regime can perform.<\/p>\n China in the early 2000s is remembered as being flush with energy and exploring new freedoms and openness. \u201cIndividual Chinese,\u201d George Gilboy and Eric Heginbotham observed<\/a> in 2001, are able to travel abroad; they \u201care now free to create their own lifestyles: they can move about the country, start their own businesses, and express themselves on a wide range of issues.\u201d Later, however, beginning under President Hu Jintao, the CCP tightened state control over the economy, civil society, and personal freedoms. \u201cThe space for pop culture, high culture, and spontaneous interaction has narrowed to a pinhole,\u201d journalist Evan Osnos wrote<\/a> in 2023. \u201cChinese social media, which once was a chaotic hive, has been tamed, as powerful voices are silenced and discussions closed.\u201d<\/p>\n Holding onto power while creating a highly educated populace, allowing a dynamic civil society, and actively engaging with the world is a challenging feat for an authoritarian regime. Indeed, many observers warn that Xi is tightening up because of the Soviet cautionary tale and the dangers of perestroika<\/em>: the risks that allowing too much freedom will ultimately topple the regime. Such fears are leading Xi to \u201coverreach\u201d in the opposite direction toward stultifying control, as political scientist Susan Shirk has argued<\/a>.<\/p>\n Some observers have wondered whether China is following the path of the Soviet Union. As Osnos wrote, \u201cTo spend time in China at the end of Xi\u2019s first decade is to witness a nation slipping from motion to stagnation and, for the first time in a generation, questioning whether a Communist superpower can escape the contradictions that doomed the Soviet Union.\u201d But China doesn\u2019t have to go down this path.<\/p>\n Xi has indeed tightened CCP control over China\u2019s state, economy, and society. Adopting Maoist language, he proclaimed at the 19th Plenum, \u201cIt doesn\u2019t matter whether it is the government, the military, the people, or the schools east, west, north, south, or the center, the party rules everything.\u201d Since the 2008 financial crisis, the CCP has moved to penetrate all of Chinese society, aiming to create party offices within all organizations. This includes private-sector firms (including foreign ones), NGOs, and universities. The CCP has taken direct ownership in private firms and passed a host of regulatory reforms to control their behavior. The United Front Department, which also monitors civil society organizations, now meets with business owners to convey CCP expectations and make sure that businesspeople \u201cidentify politically, intellectually and emotionally\u201d with the party.<\/p>\n Observers argued that the Xi government\u2019s efforts to crack down on the technology sector in particular would stifle Chinese innovation. They point to the CCP\u2019s smacking of the ride-hailing app Didi after the company disobeyed government diktat to delay its initial public offering. Most famously, the CCP brought the hammer down on Alibaba Group\u2019s CEO, self-made billionaire Jack Ma, abruptly canceling the $37 billion IPO for Alibaba affiliate Ant Group after a notorious speech in which Ma publicly criticized the government. The superstar CEO was forced into retirement and faded from prominence. As journalist Li Yuan argued<\/a> in the New York Times<\/em>, through its crackdown on tech, \u201cBeijing tamed the industry\u2019s ambition and blunted its innovative edge.\u201d<\/p>\n Employees work on a circuit breaker production line at an electronics factory in Fuyang, China, on Jan. 16, 2024.AFP via Getty Images<\/span> <\/p>\n<\/div>\n The reversal of the tech crackdown, and China\u2019s continued competitiveness in the sector, suggest such criticism is overstated. Accounts of the tech crackdown frequently neglect the many sound reasons, related to concerns about data protection and the risk of financial crises, motivating the CCP to impose greater regulatory control. (Indeed, the U.S. government has similar concerns.) Furthermore, critics registered the tightening but not the loosening; the CCP has since shifted its policy, welcomed Ma back into the fold, ended its probe of Ant Group, and reissued firms\u2019 licenses to engage in the gaming industry. Critics also ignore sectoral variation; regulations in the AI sector have been kept deliberately lax in order to encourage innovation.<\/p>\n In this interpretation, Xi\u2019s crackdown on the tech sector was not an inexplicable own goal committed by an uninformed or irrational leader; rather, it adheres to a smart authoritarian logic of allowing freedoms when you can and imposing controls when you must. \u201cLoosening causes chaos; tightening up causes death,\u201d Angela Huyue Zhang quotes in her book about the tech crackdown. Smart authoritarianism is all about striking a balance in order to avoid either bad outcome.<\/p>\n China\u2019s shift toward a heavier hand for the state is also lamented as misguided. But government involvement need not quash innovation. As political scientist Linda Weiss has argued, Washington\u2019s funding and leadership played a crucial role in the creation of Silicon Valley and in encouraging the developments of key consumer sectors and military technologies. Importantly, she notes that the U.S. government delegated innovation to universities and private firms. The U.S. \u201ctechno-security state,\u201d describes<\/a> China analyst Tai Ming Cheung, was \u201chighly pluralistic and decentralized.\u201d In other words, state intervention is not necessarily a bad thing\u2014what matters is the way that the government intervenes, and China\u2019s success depends on whether it can continue to develop a healthy innovation ecosystem.<\/p>\n <\/p>\n That said, the lingering influence of China\u2019s state firms risks dampening Chinese innovation. The private sector accounts for the majority of China\u2019s innovation and almost all of its high-tech exports. The state sector, however, continues to hoover up most of the capital; state firms benefit from preferential treatment in terms of government loans and unfair barriers to entry that shut out private firms. A failure to reform the state sector will undermine China\u2019s technological competitiveness.<\/p>\n Scholars also argue that as the CCP attempts greater control over the Chinese economy, greater personalism is diminishing the quality of governance. Shirk has commented that \u201cthe system appears to be reverting to dictatorial rule\u201d: Xi, Shirk argues, is \u201cscrapping the institutional norms and precedents that the party has built around its collective leadership since 1979.\u201d These served as a Chinese version of checks and balances\u2014which Xi appears to be unraveling.<\/p>\n A return to personalism could indeed undermine Chinese innovation. If cadres are selected, promoted, and assigned on the basis of political loyalty rather than competence, this violates one of the key attributes of smart authoritarian rule. At a time when the CCP is increasing the level of state involvement in innovation, assigning loyalist toadies to key economic roles in the bureaucracy would be disastrous for innovation and the economy more broadly.<\/p>\n Furthermore, the success of the smart authoritarian model depends on leaders having reliable information. Although the government censors external media, the CCP relies on an internal media for a frank presentation of challenges facing the country. If personalism leads analysts to be afraid to present accurate information to Chinese government officials, this could also undermine China\u2019s smart authoritarianism\u2014and, ultimately, innovation.<\/p>\n An electronics shop employee in Hong Kong looks at a bank of television sets showing Xi on Oct. 18, 2017.Anthony Wallace\/AFP via Getty Images<\/span> <\/p>\n<\/div>\n Overall, the skeptical view about China\u2019s future attributes the country\u2019s unexpected innovation success to the loosening of restrictions around the turn of the 21st century. Accordingly, Xi\u2019s abandonment of state-sector reforms, increased personalism, and so forth will quash innovation, leading China to follow the Soviet Union\u2019s slide off the global technology frontier. In this view, China\u2019s innovation success was an unexpected interregnum, but in the long term, authoritarianism\u2014even the \u201csmart\u201d kind\u2014is incompatible with innovation-based growth.<\/p>\n<\/div>\n This view may be proven correct, but a few caveats are in order before liberalism can declare victory. First, China shows us that authoritarian regimes can in fact generate innovation. Even if smart authoritarianism is just an interlude, it can be a long and consequential one. Singapore\u2019s \u201cinterlude\u201d has lasted 60 years. In China\u2019s case, if smart authoritarianism lasts only about 50 years, a lot has happened during that time: China returned to the great-power ranks, ended the unipolar era, made itself a contender for regional dominance in East Asia, and transformed the national security policies of the United States and other countries. Furthermore, through the appeal of its smart authoritarian model, its leadership in technologies of authoritarian control, and its relationship with Russia and other autocratic regimes, China is supporting a trend of democratic reversals around the world.<\/p>\n Second, this may not be an interregnum. In the smart authoritarian view, the CCP\u2019s move toward greater control, which many observers interpret as bafflingly misguided, was a tactical response to years of more relaxed policies. Indeed, an ongoing topic among party leaders and intellectuals is the balance between democracy and authoritarianism, and the need, after periods of reform, for a neo-authoritarian turn to correct for problems that arise during liberalization. Scholar Xiao Gong Qing characterizes Xi\u2019s policy shifts not as regression to Mao, but as a prudent response to excessive liberalization. \u201cIf Deng Xiaoping developed the 1.0 version of neo-authoritarianism,\u201d Xiao argues, \u201cXi is now developing the 2.0 version. Xi wants to use an enhanced version of neo-authoritarianism to achieve Deng\u2019s stated goals.\u201d<\/p>\n In other words, the smart authoritarian view holds that the CCP\u2019s neo-authoritarian turn was calculated and necessary; it will enable the party to retain power while permitting enough innovation and growth for China to compete effectively.<\/p>\n He Xiaopeng, co-founder and chairman of Chinese electric vehicle maker Xpeng, announces a humanoid robot during a news conference at its headquarters in Guangzhou, China, on Nov. 5.Jade Gao\/AFP via Getty Images<\/span> <\/p>\n<\/div>\n Still, China could fail at smart authoritarianism in one of two ways. First, as many experts predict, the CCP might tack too far toward stultifying overreach, inserting government control and corruption into what had been thriving and innovative sectors, as well as isolating China from key markets, technology partners, and research and educational networks. The second failure mode is perestroika<\/em>: the result of tacking too far toward freedom and openness, with the CCP losing power as a result.<\/p>\n Some scholars may argue that herein lies the democratic advantage: that autocrats face inherent tensions between their ability to stay in power and their ability to compete in a modern, globalized economy. But democracies struggle with tensions too: preventing factions and interest groups from capturing public policy, as well as balancing free-market economic policies that maximize economic growth against the egalitarian and redistributive impulses that will frequently result from majoritarian politics. And democracies struggle to maintain order in societies that are founded on principles of limited government and individual rights. A failure to manage such tensions have caused significant domestic political instability and social division in the United States and other liberal countries.<\/p>\n Today, the CCP finds itself in uncharted territory. \u201cWe are watching a kind of petri dish in which an experiment of extraordinary importance to the world is being carried out,\u201d China expert Orville Schell has observed<\/a>. \u201cWhether you can bring together a one-party state with an innovative sector\u2014both economically and technologically innovative\u2014that\u2019s something we thought could not coexist.\u201d<\/p>\n We are also in uncharted territory with respect to the methods used by autocratic regimes to stay in power. The CCP fields unprecedented tools of control, relying on facial recognition data analyzed by AI; spyware installed on cell phones to track dissidents at home and exiles abroad; and, increasingly, the exploitation of wearable technologies and the Internet of Things, including biometric data and emotional detection technology. \u201cDigital authoritarians\u201d may be able to exert powerful control in ways that do not undermine innovation.<\/p>\n Smart authoritarianism relies on a regime\u2019s calibrations between control and freedom. When leaders fear that their grip on power is slipping, they will tactically rein in freedoms; at other times, regimes will allow greater freedoms to encourage growth and innovation. Some regimes fail to find this balance and are ousted\u2014as shown by the experiences of the shah of Iran and former Soviet leader Mikhail Gorbachev. Other authoritarian regimes, such as South Korea and Taiwan, liberalized. But some smart authoritarians stay in power a long time, and\u2014in defiance of skeptics\u2014can cultivate innovation. It\u2019s an open question whether the CCP can effectively manage the challenges facing China\u2019s economy. But the lens of smart authoritarianism explains how China got where it is today: to a place many observers said it could never reach. \n <\/p>\n<\/p><\/div>\n
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