How Dragons Can Mutate into Paper Tigers: Power Dynamics Can Make an Authoritarian System Very Successful but Also Vulnerable and Insecure. in Vying for International Prestige Chinese Statesmen Are Pursuing a Set of Targets They Believe Will Boost the Country's Future Growth and Glory. but There Are Reputational Risks of Which All Leaders Should Be Aware
Schlevogt, Kai-Alexander, European Business Forum
Reputation, or face, is an invisible asset that leaders need to nourish carefully. Warfare strategists know that it is easier to lose a yard than take an inch. Reputation can generate high returns, especially when multiplied and leveraged at the level of the state. Most importantly, it endows leaders with credibility at home and abroad. In the Cuban crisis, the words of the American president John F. Kennedy made Soviet missiles turn round. Reputation is thus a source of power and influence. Yet if handled badly, which I believe is what is happening at the moment in China, face management can backfire. Immature 'reputation engineering' is now the key obstacle constraining that country's national emancipation and development, necessitating grassroots improvements to clear the way for future politico-economic success.
Leaders whose power depends not on the popular vote, but on the emotive imagery of long marches and the Darwinian right that strength confers, paradoxically need to be more sensitive to the people than grassroots democrats. Their power is not anchored in institutional processes considered legitimate by international standards. Such perception matters more than the true nature of a country's body politic. Authoritarian leaders must gain the hearts and recognition of their citizens every day through their performance and achievements--a strong army alone will not keep them in power for long. This is what I call the "the dictate of popularity." Whereas Hitler for a long time did not ration food, Churchill offered only "blood, toil, tears, and sweat." The democrat can afford to make empty promises. After gaining power, he can claim that the people elected him as its representative and lean back for the mandated period, only to unleash a new firework of promises thereafter. The business of democrats is hope, whereas the business of dictators are results.
These power dynamics can make an authoritarian system very successful, but also vulnerable and insecure. It therefore vies for international prestige that can be leveraged to build domestic support. To gain recognition, Chinese statesmen have been pursuing a set of targets they consider vital for the country's future growth and glory, including, among other things: acceding to the World Trade Organisation (WTO), hosting the Olympic Games, and maintaining a stable exchange rate. Beyond the narrow functional merits and demerits of such national priorities--the usual focus of analysis--this intense reliance on punctuated face-building measures is problematic for the following reasons that can be derived from an examination of the social system.
Disillusion. Leaders need to manage expectations and benchmarks. Achievements are valued higher, if they exceed expectations or, best of all, are utterly unexpected. In contrast, missing stretch targets on which leaders have invested all their reputation will be regarded as a failure of the system. Raising expectations is particularly problematic, if milestones do not depend on China's action alone. For example, foreigners decide on the WTO and Olympic Games. The Chinese government thus unnecessarily puts itself under enormous pressure and assumes tremendous risks. Yet the successful general seeks battle only after victory has been won.
Transparency and predictability.
Since outsiders know on which issues the government stakes its reputation, they know exactly which buttons to press to elicit desired action. But it is smarter to impose one's will on others than enabling others to impose their will on oneself. Besides, China's moves can be easily predicted. For example, when China captured a US spy plane, a perspicacious strategist would never have doubted that the crew would be returned. Without such action, China would not accede to the WTO and secure the Olympics. Lao Zi knew the dangers of revealing preferences and recommended: "Not esteeming the valuable prevents theft. …