I joined a ChinaFile conversation on China’s Economy. The whole back-and-forth can be viewed here.

My contribution:

When things hit their extreme, they can only move to the opposite direction—物极必反 (wù jí bì fǎn)– is an idiom that seems to sum up perfectly punditry about China. Where once Beijing seemingly could do no wrong and China was poised to dominate and conquer the global economy now and forevermore, now words of doom, gloom, and crisis dominate the media and spread their fear far into the non-Chinese world trying to make sense of what’s going on.

Extremism to be followed by inevitable reversal seems to be affecting President Xi Jinping as well. Where once China’s leaders seemed pragmatic and technocratic, Xi has plumped for a full-scale switch into politics-led policy, whether it be the long- needed crackdown on corruption that has become so threatening that many officials seem paralyzed and incapable of even the most sensible decisions, or the misguided, politically-charged “rescue” of the stock market that has thrown Beijing’s commitment to true economic reform into question.

Xi’s “China Dream” threatens to become a nightmare. Like all those affected by nightmares, however, waking up and clearing the head is the most sensible cure.

Both China watchers and (more importantly) Chinese officials need to be aware of the more ancient doctrine of the mean (中庸之道 / zhōngyōng zhī dào).

China’s figurative skies are neither clear as a verdant glade’s nor as black as one of Beijing’s most polluted days. The good and the bad in China today need to be assessed and dealt with soberly and carefully, without unhelpful emotion. The economy itself couldn’t stand the sudden, pure immersion into untrammeled market discipline, but it certainly is not helped by purely political decisions and measures. The ills of the stock market and, much more importantly, the wider economy, need to be fixed by a swift but unrushed march down the well-signaled path of important and necessary structural reforms.

Can President Xi Jinping do it? The answer depends on his assessment of, and more importantly the reality of, the strength of his political position. From the outside, it certainly looks like he should have the confidence to temper his political campaigns with a real dose of economic pragmatism. But as ever, perhaps the move to the dangerous extreme still has some way to go before the reversal can begin.