Scaling Back Authoritarianism in China

After the 2026 State Visit by Donald Trump to China, Xi announced a new Constructive Stability Strategy to prevent SuperPower confrontations.

We can debate (with experts) what this might actually mean, but let's assume that China has adopted the precise definition of Stability used in Systems Theory (see the Notes below).

The graphic above presents two future forecasts for CN1, the first state variable component of the CNL20 model. The upper graph shows the time path of the unstable system: Exponential growth forever. The lower graph shows the time path for the stabilized system: Steady State after 2152--a long time in the future. 

The graphic makes the point that growth in China can continue well into the future under a stable Economic System. The next question is: How much effort would it take to stabilize the system? The answer is that a relatively small change in growth rates would put the Economy of China on a stable growth path. Compare the "unstable system matrix (F) in the Notes below to the "stable" System Matrix. The diagonal elements of F (the growth rates) have been change only slightly to create a stable system. And notice that CN2, the Malthusian-Unemployment controller  is still quite reactive (above unity). In other words, the Authoritarian System can still keep a tight control on Unemployment and stabilize overall growth.

China can evolve into a stable system without practical limits on the overall Growth rate of the System!

If this is what Constructive Strategic Stability actually means, it is quite doable. A similar stability program could be applied to the US_LM model** but the results would be very different, creating a wildly cyclical system. For this (and many other reasons) I would not expect the US to cooperate in Constructive Strategic Stability regime.

Notes

System Stability is determined by the Eigenvalues of the System Matrix, F.

** Instructions for stabilizing the US_LM model are contained in  R-code on the Google Site. Also notice that the  US_LM model is not a Malthusian model in that control of employment involves the Export market.

CNL20 Measurement Model

Three component state variables explain 99.4% of the variation in the indicators: CN1 is an historical growth controller, meaning that growth is directly controlled in an Authoritarian economy, compared to the USL20W model where overall growth does not have an historical controller. CN2 is a Malthusian-Unemployment Controller. CN3 is a Globalization-Unemployment-Energy controller.

Indicators are taken from the World Development Indicators, KOF is the KOF Globalization Index, EF is the Ecological Footprint and HDI is the Human Development Index (notice that the HDI is not heavily weighted in any of the state variables). The Measurement Model and resulting Historical Controllers are statistically estimated from data using Principal Component Analysis.

CNL20 Unstable System Matrix

CNL20 Stable System Matrix