Maritime rifts could cost China

Regarding Kevin Rafferty's Nov. 29 article, "Can Xi's reforms succeed?": Much has written about Chinese President Xi Jinping's determination to push national reforms, but he has yet to overcome three institutional obstacles.

First, China's rise to power is fraught with paradoxes, destabilizing regional stability and domestic politics. Its latest attempt to control airspace in the East China Sea has undermined the security of Japan and South Korea.

While China has refused to resolve maritime sovereignty disputes with neighbors through negotiation, many Chinese citizens have expressed their nationalist sentiments online and offline. Waves of nationalism have swept across the country with the public outcry for sanctions against foreign countries. The widespread "China can say no" attitude could prevent the top leaders from embracing new diplomatic initiatives to solve territorial disputes.

Second, hostility toward liberal intellectuals, critical journalists and ethnic minorities continues under Xi's rule. Imprisonment of dissidents, control over the Internet, and persecution of Tibetan Buddhists and Uighur Muslims indicate that the state has tightened its grip upon the citizenry. Displays of assertiveness occur, moreover, with rising internal discontent.

Extremely efficient and highly urban, China's development has yielded growth rates above those of most developed nations. But its new wealth is unevenly distributed, its labor market ruthless and its living environment Dickensian.

Since the 2008 financial crisis, Chinese leaders have recognized the need to transform its export-led economy into one driven by domestic consumption. Nevertheless, the political crisis in the fall of Bo Xilai and the leadership succession in late 2012 discouraged any ambitious leaders from experimenting with liberal reforms.

Third, the days of China being perceived as the world's economic miracle are over. The government has used state-run banks to drive growth that covered up nonperforming debts and distorted the value of bank assets. The injection of stimulus money into state-owned enterprises and large infrastructure projects was not sustainable. Many private enterprises have gone bankrupt because they lacked the connections to secure bank loans that could resolve their cash flow problems.

Faced with these structural problems, Xi should foster regional stability for internal development by resolving maritime sovereignty disputes. Otherwise, he will miss the opportunity to get on the right track with neighboring countries and to move the country forward.

The opinions expressed in this letter to the editor are the writer's own and do not necessarily reflect the policies of The Japan Times.