In Beijing politics, one wins or loses in head-to-head battles, not in heart-to-heart chats. Xi Jinping is now fighting heartlessly to keep his power. Like a Chinese emperor holding on to his declining fortune, he has his back to the wall. To his credit, he understands correctly that his survival depends on one thing and one thing only: credibility. He won't be kind to anyone who attempts to discredit him. 

Truth be told, no one can discredit Xi more than Xi himself.

Even though Evergrande alone won't sink Xi's ship, its failure is big enough to show the world that credit growth is no longer sustainable under Xi. Credit growth is debt growth. Debt growth itself is not necessarily a bad thing, as long as it is productive. Productivity pays and pays well. Cost-effective private enterprises prove that. But debt growth for inefficiency and speculation is bad. It got even worse when Xi opted for overproduction and oversupply as a way to raise his pandemic GDP. Demand remains weak, however. The Xi economy is going nowhere.

To shore up his credibility, Xi is currently drumming up "Common Prosperity" to rally the have-nots. China's wealth gap is so wide* that he thinks he'd better cast his lot with the poor who are the vast majority. Didn't Mao win the inland poor and go on to defeat the outnumbered coastal rich? In Mao's shadow, Xi desperately hopes to shine.

Xi is betting his credibility on Maoist populism. Will class warfare work well for him? We'll see. Meanwhile, we know this much is true: class warfare never works well for the people.

--- Lingyang Jiang

* Below: the wealth gap between the coastal rich and the inland poor in today's China.

Source: Forbes