Several American scholars and journalists predict that looming crises in China could change or even collapse the regime. We might call them “China pessimists.” Others, “China optimists,” argue that China’s Communist rulers have devised a durable, resilient system. We just got an indicator of who’s right.

A “black swan” — a big, bad, unexpected event — took a bite out of China’s veracity and GDP. The coronavirus outbreak reveals a brittle system of control freaks who concealed the epidemic for seven weeks and silenced the doctor who first reported it. Dr. Li Wenliang died of it. Then they tried to block news of his death, but it spread on social media, turning Dr. Li into a hero and flaring distrust of the regime. One black swan unmasked China’s contrived stability.

A year ago, the Camden Conference heard from a China optimist that China would survive and prevail. Martin Jacques, longtime editor of the British Communist journal Marxism Today and author of “When China Rules the World,” argued that the liberal Western order is foundering and a new order is aborning. (Under Trump, alas, that may come true.)

Unpanicked, accurate predictions about China could save us from a policy stampede into armed confrontation. We got stuck overestimating a Soviet threat. Few appreciated its economic decline; its collapse was a surprise. Are we now too frightened of China? Sometimes patience — while keeping our economy and defenses up — is the best strategy.

A new scholarly book I reviewed by Feng Sun and Wanfa Zhang, who teach at U.S. universities, is titled “Why Communist China Isn’t Collapsing.” They challenge the China-pessimist views, proposing that the Communist leadership has constructed a flexible, workable system combining what they call “Comcapitalism,” blending capitalism with state socialism, and “Comfucianism” that grafts traditional values onto Party rule. Coercion still abounds, but local complaints allow discontent to vent. Clever, but can it work in the long run?

Their prediction gives us a testable proposition. If in, say, twenty years, the Beijing regime has weathered systemic crises — several of which now percolate — the optimists will have been proven right. If, on the other hand, systemic crises have forced regime collapse or replacement, the China pessimists will have been proven correct.

China’s incredible economic boom is fading. Beijing claims growth of around 6 percent a year — still quite good — but some suspect it’s hyped. By stuffing loans into big, dubious projects, China’s state banks deliver whatever percentage growth Beijing orders. But this yields the world’s biggest debts along with overproduction and vacant new cities rather than self-sustaining, unsubsidized industries. 

China’s growth came after waves of privatization starting in late 1978, but Xi Jinping favors state-owned enterprises (SOEs). The market sector now delivers most of China’s GDP, but Xi understands that marketization weakens central rule, so he sacrifices growth for control. Xi’s one-man, possibly lifetime rule portends eventual succession problems.

If China is growing, how come unemployment appears and real estate plunges? Pervasive subsidies make much Chinese industry inefficient. Zombie SOEs shuffle on because the regime requires China’s four giant state banks to keep them afloat. Smaller, unregulated provincial and “shadow” banks are overextended; some fold. Xi’s grandiose Belt and Road Initiative is a major drain with little gain. Much capital flees overseas. China’s birthrate has plunged, predicting pension shortfalls and slower economic growth. 

Worker protests over unpaid wages and the jailing of activists, attorneys, students, Christians and Muslims suggest a nervous regime. A million or more Muslims in Xinjiang have been jailed in “re-education centers” to “deradicalize” them. Might not work. Xi must crush Hong Kong democracy before it gives mainlanders notions. China’s advanced Artificial Intelligence monitors everyone.

The Point: This is a frightened regime. For years, Beijing may rule via subsidies, material rewards, traditional symbols, Chinese nationalism, rigged media and tough security, but always fearing disturbances to “stability.” Watch out for the black swans.

The post-Stalin Soviet Union liberalized a little but stagnated. Middle-way economies (e.g., Yugoslavia under Tito, the USSR under Gorbachev) alternated between looser and tighter, never finding stability until they collapsed. China may be caught up in this zig-zag, now in a tightening phase that punishes critical views and favors SOEs.

“Phase 1” of a U.S.-China tariff deal was just signed, but it may do little good. It merely rolls back Trump’s 2019 tariffs while keeping his bigger 2018 tariffs and doesn’t touch the underlying problem of Chinese state control, which Beijing will never relinquish. Phase 2 will likely stall. 

So, how to handle China? If the China optimists are right, we’d better worry, because stable growth means China can build military power with pugnacious global aims. If the China pessimists are right, however, our best strategy is to wait until China’s economy falters and ends its rise to global dominance. Any wagers? By the way, try ordering respiratory masks. None available. All sold out, especially in China.