The relentless economic slowdown and the unfolding panic in China's financial markets have blasted apart several long-cherished myths. One of them is that of a competent autocratic regime run by clever technocrats and decisive politicians. Recent stumbles by Beijing, such as the ill-fated and costly decision to save a crashing stock market bubble, the surprise devaluation of the yuan, or renminbi, and the subsequent massive intervention by the People's Bank of China to support the currency, demonstrate that Chinese technocrats may not be as clever as many thought. As for the country's politicians, they appear to be decisive, but only in making bad calls.
When it comes to China, policy competence is a far more valuable asset than in other countries. For the ruling Chinese Communist Party, competence is its claim to rule. Unelected by the people, CCP leaders have consistently tried to show that their ability to deliver economic benefits justifies one-party rule. So the party has an existential stake in competence because evidence of incompetence threatens its hold on power.