When the Chinese government announced it would be ending presidential term limits in early March, investors seemed to welcome the news.
Xi Jinping’s goal of shifting the country’s exports-based economy toward domestic consumerism, say many China watchers, was always going to take longer than the President’s 10-year term. A number of U.S. companies have prospered there, even if equal footing in the country has been elusive. And at the very least, Xi’s now-indefinite reign ensures consistency. Many question the sky-high official GDP growth rates, but China’s boom has inarguably lifted hundreds of millions out of poverty .
Still, there is, of course, a darker side to the prospect of one man’s indefinite rule over a major world power. Economists caution that an increasingly authoritarian government could squash emerging dynamism within China’s economy. Xi will also have a freer hand to aggressively respond to U.S. tariffs and other policy moves, possibly increasing the likelihood of an economically destabilizing trade war. A lack of accountability could erode institutional trust and further curtail human rights, making the country’s systems—and markets in the world’s second-largest economy—more fragile in the long run.