Xi Can Overcome China’s Domestic and Global Challenges, Says Gallington


China Struggles Big Time

If one were to attempt to describe the most serious internal and external problems that General Secretary of the Chinese Communist Party (CCP) – Xi Jinping, has to deal with, they would fall into some clearly defined categories:

Regional Conflicts and Global Tensions

The focus here is on Taiwan, South China Sea disputed territorial claims, persistent independence of Hong Kong, dealing with other major Asian and Pacific countries — especially Australia and India — and with the U.S., China’s largest customer of consumer goods and absolutely critical for their continued economic success and survival.

Internal and Societal Problems

Examining rapidly declining domestic birth rates and aging population — very similar to post-war Japan — “managing” communicable diseases, such as COVID-19, continued persecution of minorities and serious environmental issues, are additional areas of concern for Communist China.

Looming Economic Crisis

Financial conditions have been deteriorating for an appreciable amount of time for large Chinese businesses and banks.

Additionally, sinking ratings of Chinese securities in international markets, sell-offs of Chinese based equity stocks, internal corruption in most aspects and functions of government, increasing percentages of youthful unemployment, panic, and disarray in domestic real estate markets and private loan delinquencies are at recorded levels.

International Criminal Enterprises

Large scale illegal drug manufacturing and global exports of illegal drugs, inclusive of worldwide theft of technology and wholesale violation of world patent, copyright, and licensing regimes.

Also extant is the outright management of millions of “overseas Chinese.”

This means the literal collecting and reporting of information as a condition of their status.

The above categories and dynamics affect most every aspect of life in China — as well as much of life in what we call the “free world” of democratic societies.

More importantly, there is one common element of these dynamics driving the downward global trend of “most things Chinese.”

Credibility Is a Factor to Not Be Discounted or Ignored

On the contemporary global realpolitik stage China retains very little credibility — whether with respect to its internal dealings or in private business or diplomatic relationships internationally.

Succinctly, they are viewed as cheaters in most every aspect of their involvement in world trade, business, and diplomacy.

While these qualities have been long known inside China, what we’re witnessing now is the effect of the world-wide recognition — and rejection — of these corruption and deceit-based realities.


  • Can any financial data originating from China be believed? Global markets have already determined Chinese financial data to be unreliable.
  • Can Chinese stock markets or commodity markets ever be trusted?
  • Can Chinese banks be trusted? Again, most Chinese investors around the world — and also investors within China — have lost faith in their government’s ability to protect investors from fraud. Result? “Big money” in most all forms is rapidly leaving China for the West.
  • Can Chinese diplomats be believed? Again, recent events [e.g., spy balloons] have shown us — yet again — they simply can’t and or won’t tell the truth no matter what the obvious facts are shown to be.
  • Can China be trusted to comply with international law and the decisions of international courts? Apparently not, especially if it actively interferes with their plans for regional control and restricting freedom of navigation.

Is Xi Jinping Aware of These Very Negative Trends?

There is no way he could not be aware, and deaf to, the closely associated realities of the basic failures of Communism in China

Gorbachev was not in the 1980’s and confronted the massively failed and bankrupted Communist Soviet Union.

What Must Xi Do?

If he’s smart — and he is — Xi Jinping will start China on an internal political journey, similar to what Gorbachev did in Russia, including a Glasnost and Perestroika — like process, along with the organized disassembly of the long-standing and corrupt “apparatchik- like” internal political elements of the Communist party in China.

The key word in this process will be “credibility”: Only by such an externally assessed process can China regain credibility throughout world financial markets and compete with the West, utilizing China’s inherent and cultural advantages of its long-developed work ethic and creativity.

China’s expertise is in the manufacture of high-quality consumer and industrial goods for worldwide sale and distribution.

However, and as seen by recent market events, this expertise is being defeated by internal Chinese corruption which has now gotten worldwide attention.

Xi knows he must reverse this increasingly aggressive downward slide with aggressive internal programs for financial and diplomatic credibility.

Daniel Gallington – who was assigned to the United States-Taiwan Defense Command in the 70’s – represented the Secretary of Defense in multilateral and bilateral arms control negotiations, served as Deputy Counsel for Intelligence Policy at the Department of Justice, bipartisan General Counsel for the Senate Select Committee on Intelligence and Deputy Assistant Secretary of Defense for Territorial Security.


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