China used to be a country of pragmatism. “Crossing the river by feeling the stones” wasn’t just a metaphor; it was a way of governing. Policy didn’t have to be perfect. It just had to work. That ethos, however informal, helped anchor a stable governing logic for decades. From the late 1970s through the early 2010s, a set of loosely shared norms guided the country’s direction: keep growth going, avoid ideological extremes, stay predictable, and don’t rock the international boat.
For years, Western scholars commended China’s success not simply out of admiration for authoritarian efficiency, but through the analytical lenses of public choice theory and institutional economics. From a public choice perspective, China appeared to constrain rent-seeking through competition among local governments, aligning bureaucratic incentives with economic outcomes. At the same time, institutional economists praised the evolution of adaptive, rule-bound governance – even within a one-party framework – as a form of embedded pragmatism. China’s informal rules, promotion systems, and decentralization were seen as substitutes for formal checks and balances.
That model is now breaking down. Over the last ten years, China’s informal consensus has unraveled.
What’s striking is not just that the old norms have been discarded – it’s that no new ones have taken their place. The result is a country in a kind of strategic limbo. China is more assertive abroad, more controlling at home, yet less coherent overall. Policies appear more forceful, but also more erratic. The center is louder, but the direction is unclear.
From the late 1970s until the early 2010s, there was at least an implicit framework. Ideology took a back seat to results. Collective leadership mechanisms and term limits helped prevent any single individual from dominating the system. And although China never aimed to become Western, it engaged deeply with the West through trade, education, and diplomacy. Those years produced a kind of unspoken political contract: growth in exchange for deference, prosperity in exchange for predictability.
It worked – until it didn’t. Since around 2013, that tacit arrangement has been steadily dismantled. Ideological slogans have returned, often vague and high-sounding, but rarely translated into practical policy. Political power has become more centralized, with term limits and collective checks removed. And China’s global posture has shifted from integration to suspicion. Foreign companies are pulling back. Academic and people-to-people exchanges have declined. Information walls are growing higher.
And yet, for all the institutional change, no alternative consensus has emerged. What kind of system is China trying to become? What rules govern policy? What values shape the future? These questions are met not with clarity, but with campaigns – one year it’s anti-corruption, the next it’s common prosperity, the next dual circulation. None of these ideas is inherently wrong. The problem is they don’t amount to a working system.
The consequences are increasingly visible. In the economy, the private sector no longer knows what is encouraged and what is punished. The state says it supports innovation, but cracks down on tech entrepreneurs. It warns against real estate speculation, but relies on the housing market to sustain growth. It promises to reduce youth unemployment, yet suppresses informal sectors where jobs once grew. There’s no consistency – and in business, inconsistency means risk.
Diplomatically, the shift has been equally jarring. China’s foreign policy, once cautious and quiet, has become sharper and more confrontational – but not necessarily more effective. China wants to lead a new world order, but doesn’t offer a compelling model to rally others. It calls for multipolarity, but often acts unilaterally. It frames itself as the voice of the Global South, but delivers mostly anti-Western rhetoric rather than concrete benefits.
Domestically, the atmosphere is tense. The state demands discipline, unity, and ideological conformity – while also asking for innovation, entrepreneurship, and social resilience. But creativity doesn’t thrive in fear. Trust doesn’t grow in ambiguity. And people – whether bureaucrats, academics, or business owners – cannot function productively if the rules keep changing, or worse, if no one really knows the rules anymore.
That’s what norms provide: not just rules, but expectations. They offer stability without rigidity. They give predictability, even within a one-party system. More than that, they provide legitimacy – both at home and abroad. When China followed its old informal norms, it wasn’t seen as democratic, but it was seen as reliable. Today, that reliability is slipping.
Of course, the world is changing. Global geopolitics have hardened. The United States has adjusted its stance. Europe is rethinking its dependencies. China faces more external pressure than ever. But many of the country’s current challenges are self-inflicted. The breakdown of internal norms has made it harder, not easier, to respond to those pressures. Leaders are reluctant to speak openly. Local officials hesitate to act without clear signals. Private capital stays on the sidelines. Uncertainty rules.
So why hasn’t a new norm system emerged? Part of the answer is fear. In a high-centralization environment, making mistakes can be career-ending. Better to stay silent than to step out of line. Another part is the over-personalization of authority: when all decisions come from the top, long-term planning becomes difficult, and institutional innovation dries up. Then there’s the ideological fatigue – slogans no longer inspire or clarify. They confuse more than they motivate. Finally, external constraints limit what’s possible: sanctions, tech blockades, capital controls. The space to maneuver is shrinking.
Still, there is a path forward – but it’s narrow, and it requires courage. Governance can remain centralized while becoming more institutionalized. Ideological goals can be reframed as measurable outcomes. International engagement doesn’t have to mean capitulation – it can mean strategic flexibility. But that would require a shift not just in rhetoric, but in political mindset. For now, that shift seems distant.
China is often described as a country with a long-term strategy. But if there is one today, it is hard to see. What we see instead is a state that has abandoned its old way of doing things, but hasn’t quite figured out what comes next. China is not becoming more coherent – just more controlling. It is not becoming more respected – just more feared.
The world doesn’t worry about a powerful China. It worries about an unpredictable one. Without norms – internal or external – China risks becoming that. And in the end, the greatest risk to China’s rise may not come from the outside world, but from its own inability to decide what kind of power it wants to be.