Where will China go in the next five years?

Korea is more vulnerable to China than Europe. It is time to invest more in observing China and prepare accordingly.

SHIN KYUNG-JINThe author is a Beijing correspondent of the JoongAng Ilbo. Chinese President Xi Jinping will chair the Politburo of the Chinese Community Party meeting this week. The meeting will announce the third plenary session of the 20th Central Committee of the Communist Party of China. It is a place to discuss Xi’s third-term agenda until 2028. Since the third plenum of the 11th Central Committee in 1978, the third plenary session has discussed crucial reforms for the country.

The 18th Central Committee 10 years ago advocated “comprehensive, in-depth reform.” But the third plenary session of the 19th Central Committee five years ago was different. After the second and third plenary sessions were consecutively held in January and February for the constitutional revision to abolish the presidential term limits, the equation of “the third plenary session equals reform” has been broken.

What will the third plenary session of the 20th Central Committee discuss? Currently, the Chinese economy is in crisis. It did not enjoy the expected reopening effect. U.S. President Joe Biden even called the Chinese economy a “time bomb.” There was even a joke that the new three major economic engines in China were “the National Bureau of Statistics, the Publicity Department and Xinhua News Agency.” If the third plenary session regresses, it will be another bad news.

Where will China go in the next five years? “Shaky China,” a report published by the German think tank Mercator Research Institute, is noteworthy. The subtitle is “Five Scenarios of Xi Jinping’s Third Term.” It predicts China’s future with 15 indicators, including politics, society, economy and technology.

The basic scenario is a shaky China on the unstable status quo. Risk factors include fluctuating bilateral relations, politicization of economic relations and supply chains, and passive policymaking due to the U.S.-China conflict. Unstable supply chains of key materials and minerals are risks for Chinese companies.

If the Taiwan Strait dispute or a military clash between the United States and China becomes real, the “Confrontational China” scenario will kick in. The extreme separation between China and the West will become a reality. Companies in Korea and other countries must pursue their global strategies under a forced decoupling with China.

If Donald Trump is re-elected and China stands on its own in key technologies such as quantum computing and artificial intelligence, a “Successful China” scenario will unfold. “Restrained China” refers to a successful operation of the alliance of countries sharing values with America coupled with China’s internal weaknesses preventing it from rising. The “Reform China” scenario also remains. China’s reform and opening could return if China’s internal crisis changes its political climate.

All five scenarios are possible. The variables are the intensity of social, economic and diplomatic stress facing China and the efficiency of highly centralized control. The report urges European policymakers and businesses to look for scenario-specific risk and opportunity factors and closely track the triggers that will change China’s future. Korea is more vulnerable to China than Europe. It is time to invest more in observing China and prepare accordingly.