Introduction

In 2025, an epoch–making book by David D. Li was published in Russian translation (Li, 2025). Its author is a well–known Chinese economist with an impressive track record of achievements by international standards. The book in question has already attracted the attention of the scholarly community, which was quick to voice its opinion. However, the responses vary greatly. Alongside a brief summary of the book by Derek Sivers [1], there exists a highly critical review by Noah Smith [2], which systematically argues that Li’s book will not reassure but rather further alarm the American reader. For instance, Smith quite reasonably contrasts the relationship between the Chinese Communist Party (CCP) and the Chinese people, based on a “parent/child” model, with the established American tradition, in which many Americans feel deep aversion to such an idea. Consequently, Li’s book is likely to achieve the opposite effect.

One cannot overlook the substantive dialogue that took place between David D. Li and leading contemporary intellectual Jeffrey Sachs [3], in which many of the book’s propositions are further clarified. In the Russian–language information space, the video presentation of the aforementioned book by VCIOM Director V. Fedorov draws attention [4]. Nevertheless, a thorough academic analysis of Li’s monograph is still lacking, which provides the rationale for filling this gap. As for the validity and relevance of discussing Li’s ideas, they are linked to understanding the deep foundations of self–organization among Chinese elites that have predetermined their success in recent decades. This is of immense importance for the restructuring of the old world order in favor of “young” states that have demonstrated the effectiveness of their governance systems and become new centers of power. In this case, China is but one example of alternative institutional systems among countries that are regional leaders.

In this regard, the aim of this work is to systematize the key elements of the Chinese governance model, understand their advantages, and explore the possibility of their adoption. The novelty of the author’s approach lies in integrating the empirical data from Li’s work into a broader context of social, philosophical, and cybernetic knowledge. The research method involves correlating specific institutional mechanisms of the Chinese governance system with universally significant patterns from related sciences.

Academic diplomacy, Chinese style

Let us pose a reasonable question: what has Daokui Li accomplished in his book that makes it worth dissecting in detail?

The answer can be broken down into three distinct points.

1. The author “provides a window into the soul” of China and, by doing so, attempts to make the Celestial Empire more comprehensible to the West and, consequently, less threatening. Of course, this task is largely utopian, as no amount of knowledge about a geopolitical rival eliminates the geopolitical confrontation itself, which has unfolded between the USA and the PRC. In this sense, the United States and the West will not renounce their hegemony, but the rivalry with China could become less hysterical and aggressive – and that is a significant achievement in the context of a crumbling world order. Understanding the adversary’s mentality alleviates excessive fears and emotions, which, under favorable circumstances, can contribute to the normalization and rationalization of international relations.

2. With his book, D. Li has launched a new phenomenon that can be termed academic diplomacy. In this case, the economist–scholar has taken on the mission of providing a systematic exposition of the Chinese mentality, worldview, and the ideology of the Chinese elite. Understanding these aspects serves as the foundation for any diplomatic negotiations and the search for mutually acceptable solutions in international relations. Despite its seeming simplicity, the task of elucidating the Chinese worldview is, in fact, anything but trivial. For example, there is still no equivalent to Li’s book for Russia, even though, given the current spread of Russophobia, it would be logical to present the country’s position on key issues. Moreover, while a high–ranking Chinese scholar can be heard on matters of worldview and ideology, in Russia, there simply are no such representatives of science whose opinions would be considered by the domestic authorities, let alone by external actors in the geopolitical system. Furthermore, irrespective of this circumstance, we do not even see attempts by Russia’s academic community to take the initiative in systematizing the Russian worldview. In this sense, Daokui Li demonstrates the proactivity of Chinese scholarship in providing valuable material for politics and diplomacy. This is a truly significant initiative, and it is likely to be further developed in the future, including in other countries.

3. D. Li reveals the mechanisms that sustain the high effectiveness of non–Western institutions. This direction allows for once and for all refuting the notion held by the economic mainstream about the superiority of liberal–democratic Western institutions compared to administrative– command management systems. Here, the veil is lifted from such paradoxes as the sustained high efficiency of a one–party system over many decades; the sustained economic viability of state–owned enterprises; the stability of the country’s high–quality managerial elite, and so on. Gaining an understanding of these issues significantly expands the field of institutional research, allowing for the examination of competition between different types of power institutions. It is precisely this direction that opens up substantial scientific prospects.

In light of the above, Li’s book merits the closest attention; hereafter, we will focus precisely on the deep–seated factors ensuring the effectiveness of the state governance system in China. To this end, we will sequentially examine the most important and interesting aspects of political power in the Celestial Empire. In doing so, we will supplement D. Li’s analytical passages with our own arguments and interpretations, which will allow us to see the Chinese governance system in sharper relief.

The paradoxes of a one–party system of power

Modern literature already contains examples of successful “decoding” of the model behind the Chinese governance system’s success. In particular, there is a fairly detailed list of political principles that ensure the longterm success of China’s economy (Popov, 2025). Subsequently, this list was formalized into six fundamental elements of Chinese politics (Balatsky, 2025). However, such a success model is normative in nature and does not reveal how the Chinese leadership manages to adhere to these principles and correctly project them onto the current situation. For understanding this very aspect, D. Li’s book provides rich material.

The starting point for the effectiveness of the entire system of power in the Celestial Empire lies in the presence of the Chinese Communist Party (CCP) within the country. It is precisely the presence of a people’s party that safeguards the interests of the masses that allows for preserving the nation’s integrity and correctly determining the country’s development vector. Moreover, it is the CCP that ensures the strength and stability of the Chinese state itself. However, several acute and interconnected questions arise here. First question: How, despite the party hegemony that began in 1949 with the founding of the PRC, has the CCP managed not to degenerate or degrade for over 75 years? Second question: Why did the Communist Party of the Soviet Union (CPSU) completely decay from within and self–liquidate over a similar period?

Let us attempt to answer these questions step by step, drawing on Li’s work.

We begin with the circumstance that a one–party system has a tremendous advantage over multi–party systems – it bears no costs from the lack of need to fight for power. Consequently, all the attention of the party leadership can be focused on the overarching task of governing the country (Tab. 1). This, among other things, allows the CCP to rely on an indefinitely long planning horizon and undertake large–scale strategic projects that are simply inaccessible to democratic governance systems. For example, in the United States, the Republican and Democratic parties spend enormous financial and human resources on election campaigns, and afterward, many decisions and projects are limited by the four–year presidential term; ideally, this period extends to eight years in case of a candidate’s re–election. For comparison: building an aircraft carrier in Russia takes eight years, and considering all the preparatory documentation – ten years [5]; the planned construction duration for an aircraft carrier in the US is nine years plus preparation time [6]. Consequently, electoral systems do not facilitate balanced decision–making even on issues related to the creation of complex military weaponry. Thus, from the standpoint of strategic decision–making and the consistency of their implementation, a one–party system has clear advantages over democratic forms of governance. This is in addition to the savings on transactional costs due to the absence of an election procedure.

Table 1. Differences between one–party and multi–party systems of governance

It is noteworthy that modern Western economic science typically sidesteps this circumstance, thereby deliberately obscuring the advantages of an administrative–command management system.

However, Table 1 reveals only the macroeconomic advantages of the Chinese governance system, while its microeconomic benefits are no less significant. To account for the latter, it is sufficient to understand the constraints that the CCP imposes on its citizens. It turns out that these are not as significant as commonly thought. In China, only Communist Party members can hold government positions, but they are not prohibited from running their own businesses. Non–party citizens can also engage in any activity except holding government offices (Tab. 2). Thus, CCP members are the most mobile members of society, with minimal infringement on the freedoms of other citizens.

Table 2. Career differences for party and non–party citizens in China

As we can see, China’s command system, so often criticized by the West, turns out to be not so wretched and terrifying. However, this still does not explain the resilience and effectiveness of the CCP itself. For that, it is sufficient to refer to Table 3, which schematically reflects the principles and logic of the CCP’s operation. Here, the macro– and microeconomic aspects of the CCP’s activities (see Tab. 1 and 2) are complemented by its internal structure. Let us examine individual elements of the CCP model in more detail.

Table 3. The logic of CCP functioning

The scale of the CCP’s presence in all layers of the economy and society is manifested in the fact that its representatives are literally everywhere – in large and small companies, including private ones, at state–owned enterprises, in all government bodies, in public organizations, etc. The omnipresence of CCP agents might alarm an outside observer, but behind it lies an extremely simple phenomenon, which, following D. Li, we will call “managerial paranoia” (Li, 2025, p. 199). This term implies an almost panicky fear among Chinese managers of large–scale societal problems. That is precisely why the CCP does everything to saturate the country with its “personnel sensors”, which promptly signal emerging problems for their timely resolution. The source of managerial paranoia lies in China’s own history, which has shown the ruling elites that ignoring real societal problems is fraught with their “ripening” with the most terrible consequences. The conclusion is simple – the elites do everything to avoid repeating past mistakes in this regard.

The hierarchical personnel structure of the CCP is based on a system of ranks awarded based on performance and serving as the basis for further career advancement. Government positions correspond to qualification ranks, which introduces necessary order into personnel appointments. A consequence of this hierarchical structure is a sequential career progression, according to which personnel appointments move both vertically (according to ranks) and horizontally (within ranks); additionally, there are upper age limits – for example, candidates over 68 are not considered for positions like federal minister or provincial governor (Li, 2025, p. 73). Furthermore, a promotion of more than one rank at a time is not permitted (Li, 2025, p. 61); an additional criterion for filtering out unsuitable personnel is an impeccable reputation (Li, 2025, p. 73). This system is quite conservative (for example, a 40–year–old federal minister or head of state is impossible in China), yet it safeguards against the emergence of insufficiently experienced and qualified leaders. Let us immediately note that, unlike in China, any appointments are possible in Russia – regardless of a candidate’s age, experience, qualifications, or reputation; something similar exists in the USA and Europe. Finally, complementing these two principles is the principle of meritocracy, according to which any promotion in position and rank must be earned through success in the previous role. And again, in Russian management practice, there are many examples of appointments to high positions of people with no positive achievements to their name. Thus, strict regulation of careers in government bodies and the CCP serves as a guarantee against personnel chaos and future management errors.

In addition to all of the above, the Celestial Empire operates a system of self–control within the CCP, with the National Supervisory Commission serving as its institutional element (Li, 2025, p. 214). This system of self–control is based on two interrelated principles – total absence of immunity from criminal prosecution and the existence of the death penalty. The Chinese governance system categorically rejects the principle of impunity. Daokui Li provides striking examples of the CCP’s self–control system in action: Zhou Yongkang, head of police in the 2000s and initiator of an effective anti–corruption campaign in law enforcement agencies, was himself sentenced to life imprisonment 15 years later as a high–ranking corrupt official (Li, 2025, p. 90); Zheng Xiaoyu, in 2003, became the first director of the National Food and Drug Administration and received the title of “model worker” (analogous to a knighthood in the UK), only to be executed in 2007 by decision of the Supreme Court of China (Li, 2025, p. 92); military commander Guo Boxiong, who held an army position second only to the country’s president, engaged in trading general’s ranks and maintained numerous mistresses, resulting in a life sentence in 2015 (Li, 2025, p. 95). Thus, in China, no manager can count on impunity for their crimes, and the punishment can be extremely severe – death penalty or life imprisonment; sometimes the punishment also extends to the wives of corrupt officials.

It is noteworthy that the Chinese accountability system strictly corresponds to modern economic theory, particularly the economics of crime. For example, economic analysis emphasizes that in combating crime, one should simultaneously increase both the severity of punishment and the probability of its occurrence (Becker, 2003). In this context, principles 5 and 6 in Table 3 represent precisely such an ambivalent system for maintaining order: the first removes limitations on the severity of punishment, while the second prevents the probability of crime disclosure from being nullified. Consequently, the self–organization of Chinese elites is carried out according to the most advanced and stringent scientific norms. From this perspective, the very fact of the abolition of the death penalty appears as an outright degradation of the Western legal system, pressure from which China has so far successfully resisted.

What has been said is quite sufficient to explain why the CCP has not degenerated over its 75 years of existence. Moreover, a direct comparison with the USSR also easily explains the degradation of the Soviet elites – in that country, communists were virtually immune to prosecution, and high–ranking party leaders had immunity even from investigation by the KGB. It is enough to recall that the limits of the KGB’s jurisdiction in the USSR extended not only to high–ranking party and Soviet officials but also to many state institutions and socio–political organizations; violating these established boundaries was suppressed and severely punished (Zhitnukhin, 2014, p. 151). Regarding members of the Politburo of the CPSU Central Committee, the country’s KGB did not even have the right to double–check suspicious information it possessed (Zhitnukhin, 2014, p. 150). It was precisely thanks to such criminal immunity that A.N. Yakovlev and E.A. Shevardnadze avoided exposure of their subversive activities (Zhitnukhin, 2014, p. 154). In other words, the USSR had a system of exceptions to the law on criminal prosecution; contemporary China has learned from this negative experience.

Attention should be paid to the circumstance that all six principles in Table 3 in China are a kind of sacred foundation of society and the CCP, whereas the Western world has increasingly retreated from them over time. Using the philosophical terminology of V.A. Shmakov, these principles can be called an element of the noumenal world, while the actual state of affairs in the party elite is an element of the phenomenal world (Shmakov, 2016). The law of synarchy presupposes correspondence between the monads and multiplicities of the two worlds at all hierarchical levels. If a social system accumulates strong deviations from the predetermined noumena (laws), this leads to an unacceptably large noumenal–phenomenal discrepancy, followed by the collapse of the entire social system, for example, the disintegration of the state itself (Balatsky, 2024). Thus, the current model of self–organization of the Chinese elite corresponds to the profound philosophical foundations of existence, which underlies the effectiveness of the Celestial Empire’s governance system.

The system of checks and balances of power, Chinese style

The previous section sheds light on the personnel structure and dynamics of China’s power elites. However, the system for forming managerial decisions in the country, which is significantly regulated by the factor of history, remains unexamined. This circumstance allows us to clarify the current institutional system of China regarding the work of specific representatives of the managerial class. To do this, let us recall D. North’s formula, according to which a country’s institutions (norms of life and behavior) are divided into formal (laws, regulations, directives, etc.) and informal (traditions, customs, etc.):

                   (1)

However, the second term of formula (1) for China can be expanded as follows:

     (2)

The legal system for curbing voluntarism in the actions of various officials and party figures in China is regulated by mixed institutions, i.e., a blend of purely legal and administrative elements. For example, Daokui Li explains that in the Celestial Empire, as in other countries, courts exist and function, but their significance is limited; in addition to them, there is a system of complaints to local party and state bodies, which is a much more effective tool for providing feedback to the authorities. This resembles the practice of complaints to party bodies in the USSR, but in China, it has been preserved and harmoniously integrated into the overall legal system.

Interestingly, this seemingly crude and irrational system at first glance has deep institutional roots. For instance, the transition from the Roman Republic to the Roman Empire was marked by increased efficiency in governing provinces. In the Republic, a proconsul dispatched to a province was practically accountable to no one: he was not obliged to report his actions either to the provincials or to the central authority (Sobolevsky, 2001). In this regard, one might recall that the career of Marcus Tullius Cicero began at the final stage of the Roman Republic with the case of Verres, whose name became synonymous with a dishonest governor (Bobrovnikova, 2006, p. 175); the futility of fighting the irresponsibility of the former propraetor of Sicily, multimillionaire Gaius Verres, was precisely the cause of Cicero’s oratorical triumph. During Imperial times, the rules changed – the emperor had the right of supreme supervision, including over provincial governors. When conflicts arose locally, provincials complained to the emperors, who, even if generally extremely unjust, severely punished such governors. Thus, command systems of governance demonstrated their advantages even in ancient times –advantages that mainstream economic science has diligently obscured in recent decades. For imperial China, such an order of affairs was traditional, so it does not cause rejection among the current population. Moreover, in today’s China, courts and the practice of submitting complaints and petitions complement each other, making the institutional system more flexible, diverse, and effective.

As for informal checks and balances on power in China, the primary factor here is the factor of history (the first term on the right side of formula (2)). Its essence lies in a dual mental influence: firstly, Chinese political leaders, when making critically important decisions, take historical retrospection into account as fully as possible; secondly, they consider the historical perspective and their place in the memory of descendants (Li, 2025, p. 30). Li explains very clearly that George W. Bush, were he a Chinese leader, would not be able to peacefully enjoy retirement: he would be endlessly pursued by accusations related to two catastrophic events – the US invasion of Iraq in 2003 and the financial crisis of 2008. Perhaps the most vivid example of the significance a leader’s future place in national history holds is the return of Mao Zedong to power after witnessing, in 1953, Nikita S. Khrushchev’s vilification of Joseph Stalin’s personality – a figure who, in an instant, transformed from hero and god into villain and devil. The horror at the prospect of a similar fate awaiting Mao provoked him to return to politics and fight for power, from which he had already stepped away by that time.

It must be said that such a sensitive attitude toward history among Chinese leaders has stark antitheses in the USSR and Russia. For example, Mikhail Gorbachev became one of the most despised leaders in the eyes of the people throughout the country’s history, yet this entirely predictable outcome did not deter the last leader of the USSR from taking destructive actions to dismantle the state. Moreover, he later felt no pangs of conscience and lived a long life peacefully outside his own homeland. Such an outcome seems simply impossible for a Chinese leader. A peculiar “competitor” Gorbachev is the first president of the Russian Federation, Boris Yeltsin, who remained, in the eyes of the people, the epitome of uncultured behavior, alcoholism, and capriciousness. However, fear of such labels did not contribute to his personal reform nor prevent him from systematically dismantling the nascent state.

These examples reveal the moral constraints that operate within Chinese elites and have already been forgotten in many other countries. At the same time, one should not think that considering the factor of history is something completely unique, inherent only to the Chinese nation. For instance, the proponent of a good knowledge of Greco–Roman history was Arnold Toynbee, who believed that it equips a person with knowledge of practically all possible social archetypes and allows for much better navigation of current events (Toynbee, 2011). Characteristically, Toynbee himself worked in the intelligence department of the British Foreign Office from 1915 to 1919, which influenced the general cultural level of the country’s diplomats and intelligence officers. However, today, as Britain has ceased to be a colonial empire, the cultural level of its establishment has catastrophically declined, apparently due to the disappearance of the very need for a global understanding of ongoing processes.

The phenomenon of Chinese elites’ dependence on history is generated –however much it may sound like a pun – by the sheer length of the history of Chinese statehood itself. Existing empirical data indicate that the centuries–long existence of a stable state, in and of itself, creates stable and self–reproducing state institutions, laying the foundation for the so–called state instinct; furthermore, the longer a stable state exists, the stronger this notorious instinct becomes (Bockstette et al., 2022). This fact largely explains China’s virtuoso maneuvering on the international stage after 1949, which stands in sharp contrast to the naive actions of late Soviet elites and current Russian politicians. Some analysts believe that Chinese chronicles, say, from the Three Kingdoms period (3rd century AD), provide a wealth of information on how warring states and leaders form coalitions with each other, then commit betrayals, with the most cunning ultimately winning; these plots are known to all Chinese, as they form the basis of still popular novels and plays (Ponarin, 2025). It is possible that such knowledge makes Chinese politicians more mature and experienced compared to many Western colleagues.

The factor of history establishes a unique mental tradition among Chinese elites, yet it is complemented by a very distinctive personnel policy (the second term on the right side of formula (2)). Its essence lies in maintaining two processes: the top leadership of China regularly consults with former leaders on key issues, thereby ensuring the continuity of the state decision–making process (Li, 2025, p. 71). When appointing the top party and state leader, the opinions of retired leaders, such as former members of the Standing Committee, are taken into account (Li, 2025, p. 74). The tradition persists to this day where current and retired leaders meet annually in the resort city of Beidaihe to exchange views on upcoming personnel appointments. This tradition is difficult to overestimate for stabilizing the entire system of state decisions and for avoiding sharp and ill–considered turns in domestic and foreign policy.

The above is sufficient to understand that the diversity and effectiveness of the system of checks and balances on power elites in China is not lower, but higher, than in Western countries. Hence the effectiveness of the decisions made.

Hegemony, Chinese style: The evolutionary aspect

China’s growing might has brought the question of its future global hegemony to the fore. However, Daokui Li denies such aspirations on the part of the Celestial Empire. This is manifested in two overarching principles of the country’s foreign policy. First: refusal to export the Chinese model. Second: rejection of aggressive diplomacy, i.e., diplomacy is merely an extension of domestic business. Let us examine these principles in slightly more detail and show that the true state of affairs is somewhat more complex than Daokui Li presents to us.

The refusal to export the Chinese model is generated primarily by its impossibility. Expanding the logographic writing system and the spoken language with its modulations beyond China’s borders is practically impossible; it is equally problematic to impose one’s religious and philosophical canons on the Muslim world and Western countries; an attempt to transfer communist and socialist principles would be no less dubious. Chinese elites understand that any attempts to move in these directions would provoke enormous local resistance and only increase fear of the Celestial Empire. In this regard, the refusal to export the Chinese model is not a voluntary renunciation of global hegemony but a consequence of the impossibility of its realization in traditional forms. It appears that the expansion of Chinese influence will continue, including through the search for new forms to ensure this influence.

The rejection of aggressive diplomacy imposing its interests on the world is also not related to China’s goodwill. The CCP leadership understands that the country’s enormous population generates high complexity in maintaining internal order. In such a situation, foreign policy serves as a complement to domestic policy, not vice versa; any overextension of forces on the foreign policy arena is fraught with the country’s disintegration. Therefore, external markets are used as a space for the expansion of domestic production and the strengthening of the state’s economic might. At the same time, experience shows that China very consistently and firmly defends its foreign economic interests.

Thus, the external absence of overt claims to global geopolitical dominance by China is associated with the cultural limitations of its civilization, and by no means with the peacefulness or pliability of its leadership. At the same time, the Celestial Empire’s aspiration for dominance is not absent but hidden behind the veil of a “calm” foreign policy. However, beneath this lies a deep philosophical foundation that strongly distinguishes China from the West. To understand these differences, it is sufficient to refer to the theory of natural selection in its two interpretations. The first interpretation belongs to Charles Darwin: the strongest survives (wins). The second interpretation is associated with the names of Alfred Russel Wallace and Thomas Malthus: the weakest perishes (loses) (Lipton, Bhaerman, 2010, p. 198). The Malthus – Wallace interpretation predisposes people and state elites to self–improvement so as not to be worse than others, while Darwin’s interpretation predisposes them to fight for their primacy. The West has traditionally followed the Darwinian paradigm, while China has chosen the Malthus – Wallace paradigm for itself. However, the difference between the two paradigms signifies a difference in the tactics for securing a privileged position, not in the ultimate goal.

The above allows for a better understanding of China’s foreign policy stance – it will not allow itself to become weak and will fight for its privileges in the geopolitical system, but it will do so not recklessly, by overextending all its forces and resources, but step by step, gradually, and systematically. For the Celestial Empire, it is completely unimportant whether it will be officially proclaimed the global hegemon or not; the main thing is to be strong enough to guarantee the inviolability of its vital interests from external threats. Considering that the main threat to its interests is the United States, it needs to be not weaker than them, and that precisely signifies global hegemony. Thus, China’s impending hegemony is hidden and wrapped in a more rational philosophy, but it does not disappear. In this regard, by analogy with the concepts of hard and soft power introduced by Joseph Nye (Nye, 2023), one can speak of hard and soft hegemony. If the United States adhered to the doctrine of hard hegemony with its characteristic forceful diktat, China adheres to the doctrine of soft hegemony in the form of peaceful (economic and diplomatic) pressure. This constitutes the uniqueness of the emerging new world order with the Celestial Empire at its head.

Today, there are numerous practical manifestations of the “Chinese approach” in foreign policy. For example, on the one hand, in response to the West’s intimidation of the “Global South” countries with the threat of Chinese dominance, the CCP leadership proclaimed the Celestial Empire not an external player but an integral part of the so–called “Global South,” thereby trying to soften the confrontation with representatives of such a large regional bloc (Lomanov, 2024). On the other hand, the CCP’s foreign policy stance on the unity of three ideological constructs – “Community with a Shared Future for Mankind,” “profound global changes,” and “Chinese–style modernization” – can only be realized based on the leading role of the third element, whereby a strong China unites the destinies of other peoples and steers all global changes in the right direction. Therefore, the CCP’s main task is building a strong, modernized state, which constitutes the “highest form of politics” (Lomanov, 2024).

Chinese ideologues have masterfully distinguished between such fundamental concepts as “shared values” and “universal values”: the former genuinely exist and include the human right to a prosperous life, freedom, justice, democracy, etc., but all these shared values are realized in diverse institutional forms depending on the cultural traditions and preferences of peoples. Under the guise of “universal values”, the West has attempted to impose its own institutional model for realizing “shared values” on other countries, under the banner of its non–alternative nature (Lomanov, 2025). This interpretation allows China, on the one hand, to align with the West in sharing these common values (content), and on the other hand, to preserve its historical and cultural distinctiveness (form). However, this can only be achieved by strengthening the country’s material might–a point on which Soviet ideologists erred when they attempted to embark on a path of reforms hoping for equal rights with Western civilization without the Soviet Union having achieved the necessary level of economic power.

Economic coordination, Chinese style

The Celestial Empire’s gigantic economy itself presents a huge management challenge. The main complexity lies in coordinating all links of a vast and extremely heterogeneous economy to impart a unified vector of movement and development. For this purpose, a special economic coordinating body was created in China – the National Development and Reform Commission (NDRC), which is part of the structure of the PRC Government and was originally called the State Planning Commission of the PRC. The significance of the NDRC is difficult to overestimate, primarily due to its extremely broad mandate. The head of the NDRC holds a status above that of ordinary ministers; the commission includes various departments and a complex of research organizations (Li, 2025, p. 107). However, in addition to everything else, the peculiarity of the NDRC’s work lies in the heterogeneity of the functions it performs, which allows it to reach a new level of coordination in the economic life of a vast country. Let us examine this feature in more detail.

The macroeconomic function of the NDRC involves constant monitoring of all significant prices, inflation and unemployment levels, the scale and growth rates of all economic sectors, formulating sectoral plans, etc. Depending on the prevailing situation, decisions are made to regulate it. These decisions may fall under the purview of various ministries and agencies, but their final approval and coordination are carried out by the superior body – the NDRC. Thus, the managerial capabilities of economic agencies are limited by the NDRC’s final verdict.

The price regulation function concerns socially significant goods and services. The NDRC controls prices for electricity, gasoline, education, and medical procedures. These are zones of the government’s strategic responsibility. For example, gasoline prices cannot be left to float freely because China has the largest domestic automobile market (annual sales of 27 million vs 18 million in the USA, with a total of 270 million vehicles in the country vs 260 million in the USA) (Li, 2025, p. 110). Stock market prices are also subject to regulation. For instance, when stock prices are too high, the government stimulates IPOs to cool the market, and when they are too low, it temporarily bans IPOs (Li, 2025, p. 114). The NDRC has also intervened in pricing for MBA programs at Western universities in China: complaints about excessive prices of $100,000 for two years of study were heard by the government, resulting in corrective measures (Li, 2025, p. 111). Although the NDRC faces criticism from all sides for excessive price control, the agency continues its work in this direction.

Controlling the launch/ban of large investment projects aims to prevent economic overheating or excessive cooling. Since the ultimate losses from bankruptcies fall on workers, local authorities, and banks, the NDRC prohibits new projects in sectors with excessively low prices and overcapacity. Ignoring prohibitions entails strict penalties. For example, in 2003, an entrepreneur who violated the ban on building new steel plants received an actual prison sentence (Li, 2025, p. 111). The NDRC also issues permits to city authorities for subway construction; such control is related to fears that such projects may improperly increase the debt burden on regional authorities. To prevent overheating in the housing market, the NDRC introduced an original restriction: each family in Beijing is allowed to purchase only two real estate properties; foreigners can purchase only one property after five years of residence in the city (Li, 2025, p. 113).

Product quality control is also linked to the patronage of the population by Chinese authorities. For example, in China, when an unsafe product is found on the market, consumers lodge complaints not with the manufacturer, as in the West, but with the government through the complaint submission system. Being the guarantor of product quality, the government particularly rigorously controls market products. For instance, in China, only 30% of motorcycles meet environmental standards, which provokes enhanced control by the NDRC (Li, 2025, p. 113). However, this is not all. For example, since the 1990s, motorcycles have been either completely banned in all major cities of the PRC or the issuance of registration documents for them has been severely restricted; entry onto most highways is also prohibited for motorcycles. The authorities’ motivation is as follows: motorcycles are dangerous for the riders themselves, they interfere with pedestrians and other vehicles, and are often used by criminals (Li, 2025, p. 106).

Globally, the NDRC’s activities are governed by two informal principles – the primacy of social stability and economic development, and the principle of delicacy and prudence (Figure). The first principle is a direct consequence of the principle of comprehensive responsibility of the Chinese government, which compels NDRC staff to intervene in economic life when threats to social stability or disruptions in economic development arise. To indifferently observe unfolding problems would violate the entire Chinese mentality and the meaning of the CCP’s proactive role. The second principle is also a consequence of the very essence of the NDRC’s activities – it must reconcile the positions of different departments, find reasonable compromises, weigh all arguments, and fend off lobbying attacks from influential groups. To avoid being in constant conflict with everyone, NDRC staff have developed not just prudence but also a special sensitivity in their work and a kind of exceptional delicacy. Otherwise, there would be no end to grievances, and the agency’s effectiveness would be lost.

The above demonstrates how finely balanced the Celestial Empire’s economic management system is. Moreover, the leading role of the CCP gives rise to an extremely high business culture and art of communication among officials, which is almost impossible for other countries to adopt, as it presupposes special national traditions that are insufficiently prevalent in the Western mentality. Let us recall that in Russia, the creation of a government body similar to the NDRC has been proposed systematically and for a long time (Polterovich, 2016; Polterovich, 2023a; Polterovich, 2023b), but this idea has not gained support.

Universal principles of the Chinese governance system

The model of Chinese power self–organization examined above reveals many important aspects of the Celestial Empire’s national governance system. However, in addition to all this,this model is permeated with certain universal principles that are projected onto different spheres of life and help harmonize social relations. Below, we will examine three such principles with some practical applications.

1. Common sense. This principle may seem trivial, but experience shows that consistently cultivating it is not so simple. The essence of the principle is to adhere to the simplest possible solutions, paying no attention to any theoretical templates or dogmas.

One manifestation of this principle lies in the mission of the country’s top leader. The issue harks back to the long–standing debate about the role of the individual in history (Plekhanov, 2013). However, the Chinese establishment has simplified and concretized this problem with the thesis that each supreme leader must initially fulfill a specific mission for which he is well–suited by his personal qualities. Xi Jinping was chosen to build a modern China with an orderly governance system led by an ethical and effective CCP (Li, 2025, p. 54), and to ensure economic growth without harming culture and the environment (Li, 2025, p. 88). The realization of the first task is aided by Xi’s personal qualities – he has a personal aversion to corrupt officials and calls them scum of society (Li, 2025, p. 55). This attitude guarantees that no abuses will be covered up by the country’s supreme ruler. To achieve the second task, Xi acted as the ideologist of the new course, putting forward the vivid slogan that “green mountains and clear waters are more valuable than gold mountains and silver rivers” (Li, 2025, p. 88). If Xi Jinping did not possess these personal qualities and attitude, he would not have been chosen for such a high post. This is essentially the triumph of common sense on the question of the role of the individual in history – no a priori assumptions about democratic elections, popular votes, etc., are taken into account.

An example of the triumph of common sense in governance is the principle of the CCP’s monopoly on power, based on the system of relations between business and government according to a simple rule: “Be close to the government, but stay away from politics” (Li, 2025, p. 142). In other words, business can enter politics and participate in politics, but it cannot determine policy itself. To control the process of people transitioning from business to power, China has the All–China Federation of Industry and Commerce, which closely interacts with the CCP and serves as a channel for supplying people from business to government (Li, 2025, p. 140). Thanks to such a system, business in China, on the one hand, is not discriminated against, and on the other – does not interfere with the authorities in implementing national policy. Again, no liberal assumptions about the need to ensure equal access to power for all contenders are taken into account.

2. Naturalness (conformity with nature). This principle serves as an additional test for common sense and implies following the natural logic of the managed system. Sometimes it is easier to perceive a situation through the antithesis of naturalness, i.e., by checking for its unnaturalness.

A vivid manifestation of the principle of naturalness is the elite’s approach to eliminating popular protests not by restricting freedoms (mass demonstrations, rallies, etc.) but by addressing their root causes. The elites reasonably believe that many protests are caused by specific problems (water pollution, loss of savings due to fraudulent schemes, etc.), and therefore, these primary problems should be solved, not blame shifted onto the protesters. This is indeed quite reasonable and natural, and thus yields positive results.

Another example of the principle of naturalness is the periodic use of administrative interventions in various areas of the economy. For instance, restrictions on IPOs are introduced when the stock market overheats. This contradicts existing market regulation practices; however, Chinese authorities consider it reasonable to manually adjust the market if the standard mechanism is clearly leading in the wrong direction.

Even more impressive is the principle of limiting historical retrospection when resolving foreign policy issues. Chinese authorities believe that all the country’s major foreign policy disputes were resolved by the time of the PRC’s founding – by 1949. Accordingly, all of China’s territorial claims against other countries disregard the situation before 1949. At first glance, this seems entirely natural and simple, but many countries do not adhere to this approach. For example, Armenia and Azerbaijan endlessly delve into history in their claims over Karabakh (Artsakh). Israel and Palestine do something similar, and most recently, Venezuela and Guyana.

Finally, the aforementioned paradigm of soft hegemony takes the principle of natural selection into account to the greatest extent, but in the interpretation of Wallace – Malthus. This allows securing the country’s privileged position without excessive strain on its forces and resources. The antithesis is the United States, which is willing to risk the very existence of the planet to preserve its leadership. The USA serves as an example of a positive test for the unnaturalness of its policy.

3. Managerial paranoia. This principle was mentioned earlier and signifies for any manager “worrying about tranquility”: power must vigilantly guard social stability. It is curious that this quality of the Chinese elites is completely natural and normal, as it fully corresponds to all systemic laws known today. This thesis may seem controversial, which is why we will demonstrate its alignment with fundamental economic and cybernetic principles.

The first is the cybernetic law of W. Ross Ashby, sometimes called the Law of Requisite Variety: the complexity (variety) of the managing subsystem must be no less than the complexity (variety) of the managed subsystem (Balatsky, 2013). This means that the range of actions and mobility of the power elites must exceed the corresponding parameters of the economic system. It is easy to see that such a requirement inevitably gives rise to managerial paranoia.

The second cybernetic principle is the law of E.A. Sedov, also known as the Law of Hierarchical Compensation: in a complex, hierarchically organized system, an increase in variety at the upper level of the system is ensured by limiting variety at the previous levels, and conversely, an increase in variety at the lower level destroys the upper level of organization, i.e., the system as such perishes (Nazaretyan, 2007; Gurina, Bedash, 2014). It follows that if the power elite is insufficiently active and effective, it is forced to restrict the freedoms of the population – which is extremely undesirable and dangerous – thus further stimulating the elites to be active.

Currently, the so–called Goodhart’s law is gaining increasing significance: when a certain indicator (metric) becomes a target, it ceases to be a good indicator (Balatsky, 2013). Consequently, no formal metrics can serve as a control tool for long, as the living participants of a social system will eventually learn to circumvent and exploit them for their own purposes. This means that no formal system for evaluating the results of a managed system, no matter how successful initially, can work for too long; sooner or later, it will have to be either modernized or completely replaced. In this regard, representatives of power have no right to relax and must constantly keep their finger on the pulse, which is precisely what managerial paranoia entails.

An important clarification to Goodhart’s law is the so–called de Bruijn wave, which represents a parabolic curve on a plane where the horizontal axis measures the degree of enforcement (level of compulsion) in a management system, and the vertical axis measures the effectiveness of that management system. This curve covers four stages of managerial actions: increasing the transparency of the observed process, training the managed individuals, evaluating management effectiveness, and rewarding the managed (bonuses/sanctions); the rising curve has an inflection point at the evaluation stage and becomes declining at the sanctions stage (de Bruijn, 2005). Thus, the more management relies on a quantitative system for evaluating effectiveness, the stronger the incentives for workers to engage in counteraction. This again leads to the situation where the ruling elites have no right to relax and must constantly recheck their monitoring system and then restructure the management system, which constitutes the notorious managerial paranoia.

Thus, the managerial paranoia characteristic of Chinese elites is not an anomaly or a pathological trait but represents an absolutely normal and natural phenomenon. What is abnormal is precisely its absence in power circles.

It is interesting that the three aforementioned management principles of the Chinese elites demonstrate a kind of nesting effect: the principle of naturalness is always permeated with the requirement of common sense, and managerial paranoia strictly corresponds to both common sense and naturalness. In this way, the managerial elites of the Celestial Empire naturally elevate their activities from ordinary common sense to permanent managerial responsibility.

From a practical point of view, these universal principles are difficult to adopt and copy by other countries and peoples. This is quite understandable, as these principles require a certain unique culture and national mentality. The historically established system of relations in China between elites and masses, based on the “parent–child” principle, plays a significant role here. It can be argued that it is precisely the total common sense, naturalness, and managerial paranoia that constitute the unique cultural core of China, which predetermines its current successes.

Conclusion

Examining the deep–seated factors driving the Chinese elite self–organization model has allowed us to identify its main elements, many of which necessitate a revision of traditional views on the political process.

Firstly, the monopolistic role of the CCP in the power system, contrary to liberal theses, has evident advantages. These include the absence of a struggle for power, which saves costs and allows the party leadership to focus on its primary function–governing the country. Moreover, the CCP’s power monopoly does not lead to discrimination against the rest of society, whose representatives have practically unlimited opportunities to build careers in science, the arts, and business. The restriction on non–party citizens’ access to power is compensated by the heightened activity of party members, who can distinguish themselves both in government and in other spheres of activity.

Secondly, the CCP’s self–organization model comprises six elements (scale, hierarchy, sequential career progression, meritocracy, total absence of immunity from criminal prosecution, and the existence of the death penalty), which possess a natural immunity against degradation and degeneration. The existing model hinders the career advancement of unsuitable personnel while simultaneously allowing for the timely weeding out of “spoiled” individuals. This state of affairs helps maintain the high effectiveness of state governance in the country.

Thirdly, the CCP’s self–organization model is complemented by a system of checks and balances on power, which in China includes not only formal institutions (e.g., the practice of filing complaints against government representatives) but also informal institutions such as the mental and personnel traditions of considering the historical factor. In the first case, political leaders, when making critically important decisions, take into account as fully as possible both historical retrospection and the historical perspective (their place in the memory of descendants). In the second case, top–level personnel appointments are made considering the opinions of former party and government leaders. All this fosters historical continuity and a state instinct within the elites, which become the key assets of Chinese managers when solving complex issues.

Fourthly, China’s refusal to export its model and its adherence to the theory of natural selection in the interpretation of Malthus–Wallace, rather than Darwin, orient its elites towards self–improvement rather than a struggle for primacy. By analogy with the concepts of hard and soft power introduced by Joseph Nye, one can speak of hard and soft hegemony. If the United States traditionally adheres to the doctrine of hard hegemony, China adheres to the doctrine of soft hegemony, which mitigates the excessive aggressiveness characteristic of an era of changing world order.

Fifthly, for the global coordination of all links within a vast and extremely heterogeneous national economy, China operates a special agency – the National Development and Reform Commission (NDRC), a kind of modernday State Planning Commission of the PRC. Combining the functions of macroeconomic diagnostics and sectoral planning, price regulation, approval/ban of large investment projects, and product quality control allows it to ensure the timely balancing of all aspects of Chinese society’s life.

Sixthly, the activities of Chinese elites are permeated by three dominant principles: common sense, naturalness (conformity with nature), and managerial paranoia. These, in turn, are subject to a nesting effect: the principle of naturalness is always permeated with the requirement of common sense, and managerial paranoia strictly corresponds to both common sense and naturalness. These qualities allow the power elites of the Celestial Empire to elevate themselves from ordinary common sense to permanent managerial responsibility.

Most of the considered institutional elements of the Chinese governance model are not visible or publicly advertised, yet they determine the country’s success over the past several decades. Russia, as well as most other countries, would do well to examine these elements most attentively and begin work on adapting them to their own political and economic systems. At the same time, Russia already has a certain foundation for borrowing Chinese experience: the existence of a ruling party (“United Russia”); the presence of special bodies for handling public complaints; the ongoing purification of elites influenced by the special military operation, etc. In the future, this foundation should be strengthened and refined, bringing it to mature institutional forms.

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