President Donald Trump’s bold trade policies may be doing more than just reshaping American industry. They may also be accelerating a tectonic shift inside China, pushing the Communist regime toward a reluctant reckoning with reality—what some dissidents are calling a Perestroika moment with “Chinese characteristics.”
While the world’s attention has been fixed on events like Trump’s successful strike on Iran’s nuclear facilities, Beijing has quietly introduced a sweeping new private economy law that some compare to the Soviet reforms of the 1980s. At the time, those reforms, known as Perestroika (meaning “restructuring”), marked the beginning of the end for the Soviet Union.
China is not the USSR, and today’s economic circumstances are very different. But dissidents interviewed for this column believe the warning signs are eerily familiar. They say Trump’s tariff war, investments in American energy, tax cuts, and other policies like drug pricing reform may be accelerating the process.
“China’s economy is on a slippery slope,” one recent internal CCP report warned. The reasons are plentiful: a collapsing real estate sector, a sharp drop in exports to Russia, and lingering financial scandals from the COVID-19 era. Professor Rui Meng of the China Europe International Business School in Shanghai explained that negative consumer sentiment has intensified due to a staggering 10.7 percent year-over-year decline in property values. “The party fears unrest,” Meng said.
Exports to Russia, once a bright spot for Chinese manufacturers, have cratered. Car exports alone have fallen by 44 percent compared to last year. Meanwhile, COVID-era corruption is now boiling over. One scandal revealed that local governments were selling abandoned pandemic hospitals—fully equipped with over 1,700 rooms—for just 20 percent of their original value.
Even the OECD has slashed China’s projected 2027 growth rate by 10 percentage points, down to 4.3 percent—numbers that should be triggering alarm bells in Beijing.
Mikhail Gorbachev, the last Soviet leader, told me in a 2005 interview that the Soviet Communist Party “believed it was providing paradise for the workers – or was just one step away from it – until the very end.” But behind the curtain, the economy was crumbling. Gorbachev admitted that his reforms were a desperate effort to save the system, not dismantle it while allowing the West to believe he was launching historic change.
Many Chinese dissidents now believe Xi Jinping is nearing that same tipping point.
The recent passage of China’s Private Economy Promotion Law, which officially recognizes private enterprise for the first time since Mao’s revolution, could be a harbinger of things to come. It marks a dramatic break from earlier CCP policies that included secret police intimidation, arbitrary confiscations, and total state control. Xinhua, the state-run news agency, described the law as a way to “support and protect entrepreneurs” – a rhetorical shift that would have been unthinkable just a few years ago.
One dissident and former CCP official, Professor Lùlǐ Jiao-long, said Xi is too embarrassed to admit the ideological U-turn. “He has always presented himself as a fervent Marxist-Leninist,” he explained. “Now he risks appearing as a traitor, loser, or fool. The party can’t admit this law is groundbreaking because it would expose their lies about the so-called ‘private sector’ in China.”
Indeed, while China has long boasted of its “mixed economy,” real private enterprise has operated in a legal gray zone. The new law, like Gorbachev’s reforms, aims to create a clear (but limited) legal foundation for private business. It includes a “negative list” of industries off-limits to private firms, again echoing the Soviet system under Perestroika, where entire cities and sectors remained secret and off-limits.
“The party’s headliners believed that an animal with two heads had a better chance of survival,” Gorbachev aide Alexander Yakovlev once quipped. Xi seems to be pursuing the same mutant model – half-free market, half-command economy.
Chinese pharmaceutical companies are one example. Dissident Professor Jun De Níng said that Trump’s new health care law, which reduces drug prices by tying them to foreign benchmarks, could devastate the Chinese industry, especially biopharma companies tied to the military. “It will decimate a significant part of the PLA bio-research hubs,” Jun told me. “That’s why they are attacking him.”
He cited the example of one lymphoma drug, which costs $67.99 in the U.S. but just $12.55 in China. Sales of this drug rose 63.7 percent in Q1 alone. Trump’s new law would wipe out the profit margins, slash valuations, and cripple the CCP’s biomedical ambitions. Already, Chinese pharmaceutical stocks have dropped 10 percent, and licensing deals worth $45 billion are at risk.
Unlike the USSR, which remained largely isolated from Western markets and media, modern China is deeply entangled with both. The CCP manipulates American public opinion and buys influence in Western universities and corporate boardrooms. But even with these tools, dissidents believe Xi may have lost control.
Professor Jun, once an advisor to reformer Hu Yaobang, believes Xi’s reliance on outdated slogans and blind loyalty has hollowed out the party. “Negative selection within the CCP allows incompetent individuals to rise to the top,” he said.
Even within the party, many officials now privately question Xi’s decisions. A former agriculture official told me that internal debates over Hong Kong have become a potent metaphor. “They compare Hong Kong to a farm where chickens laid golden eggs,” he said. “Now, there are just a few birds left on life support.”
The contrast with Trump is stark. “Xi promotes suffering as Mao instructed,” one young dissident told me. “But Trump speaks of wealth, gold, and prosperity. That’s what the youth want.” Many younger party members, he added, “secretly support Trump.”
China is not on the verge of imminent collapse. But the CCP’s rigid model is increasingly incompatible with the economic reality it faces. The free-market elements of the Chinese economy are the only things keeping it afloat – and Trump’s policies are forcing Beijing to finally admit it.
Xi Jinping may not want a Chinese Perestroika. But in trying to preserve his power, he may be stumbling into one.
Ben Solis is the pen name of an international affairs journalist, historian, and researcher.
Read full article here