The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline, Yasheng Huang, Yale University Press, 440 pages

Whether you are a globalist or a supporter of economic nationalism, a China hawk or dove, you must consider a number of critical questions. What is the basis for the stability of CCP—how has the party managed to survive so many upheavals and not lose legitimacy? Does Xi Jinping’s rule signify a further strengthening of the Chinese Communist Party’s power, or will it lead to a weakening of its foundations? And finally, is China’s system capable of surpassing the West technologically, and therefore militarily and economically? Yasheng Huang’s latest book, The Rise and Fall of the EAST: How Exams, Autocracy, Stability, and Technology Brought China Success, and Why They Might Lead to Its Decline, offers a careful analysis of these questions that distinguishes it from the biased and predictable speculations of many commentators.

According to Huang, the sources of political stability can be found in the institution of keju, the civil service examination, that molded Chinese mentality and institutions. The tradition of examinations dates back to several centuries before Christ, but it was during the Sui Dynasty in the 6th century AD that the keju system was established. This system remained in effect until the fall of the empire in the 20th century.

Thanks to the keju, emperors were able to create a uniform class of educated bureaucrats. The exam enforced an intellectual monoculture; to pass, one had to master Neo-Confucian philosophy. It advocated absolute submission to the ruler’s will and strictly prohibited questioning his decisions. As Huang points out, the examinations focused on the inculcation of complex doctrines to the extent that “there was no time or energy to do much of anything else, whether that was exploring new ideas and natural phenomena, delving into mathematics, organizing a political opposition, or developing a crucial trait in the development of liberalism and science—skepticism. The human capacity was already taxed to its very limit.” This stifling intellectual environment meant that a culture of democratic discussion never emerged. 

The keju also curtailed the influence of aristocracy and its regional power; the emperor no longer had to rely on nobility, having a new class of bureaucrats to carry out his orders. Further, this system monopolized human capital. An intelligentsia like that of Czarist Russia—a country with a lower literacy rate than the Middle Kingdom—never developed in imperial China. The class of civil servants absorbed all intellectuals, instilling in them a Neo-Confucian loyalism. For the same reasons, a bourgeois class never emerged. Emperors viewed trade as a disruptive element, and in the hierarchy of Confucian values, market activities were regarded with contempt. 

Thus, the paths to social mobility were narrowed to one: the civil service. The enduring effects of the keju system help to explain CCP’s stability.

The longevity of the CCP is astounding, particularly in view of the shocks the party has weathered. These include surviving not only the disastrous Great Leap Forward and the Cultural Revolution but also the Tiananmen protests of 1989, the Asian Financial Crisis of 1998, the Global Financial Crisis of 2008, the SARS epidemic of 2003, and Covid-19. The Party has implemented draconian reforms, such as the One Child Policy and the mass layoffs from state-owned enterprises in the 1990s, during which between 30 and 50 million people lost their jobs. It has withstood internal power struggles, globalization, the growth of the private sector, and the expansion of the middle class.

Some suggest that the resilience of the CCP should be attributed to “performance legitimacy.” Yet a closer examination of the Chinese Communists’ governance reveals that its stability cannot solely be explained in this manner, especially considering its history of explosive growth alongside political catastrophes.

Huang proposes an alternative explanation for the CCP’s longevity: “axiomatic legitimacy.” According to this perspective, the state’s legitimacy is seen as unconditional; it has been deeply ingrained in the Chinese mentality through the keju, which emphasized obedience to the ruler and created a natural inclination towards statism. Given more than a thousand years of autocracy and intellectual homogenization, such a form of governance does not appear abnormal to the populace.

But can the legacy of imperial meritocracy explain why the PRC did not end up like Soviet Russia? Huang suggests that China’s political history can be understood through the prism of a pursuit of balance between heterogeneity—embracing diversity and autonomy—and the homogenization necessary for governing such a massive country. This delicate equilibrium between what Huang refers to as “scale and scope” has been achieved only a few times throughout the history of the Middle Kingdom, most recently by the CCP reformers.

Huang adopts the concept of M-Form and U-Form organizations from managerial theory to explain this. In U-Form organizations, decisions are made through a tight vertical hierarchy by general offices; for example, the sales department is responsible for sales across all regions. In contrast, in M-Form organizations, each regional branch operates its own sales department. This approach mitigates informational overload and conflicts of interest within individual offices. The Soviet economy worked according to the U-Form model, whereas the Chinese economy has adopted the M-Form structure since the late 1970s.

In Communist China, provinces were endowed with a significant degree of autonomy, creating a set of incentives distinct from those in Russia. Unlike USSR, where regions received funding from the central government, Chinese provinces lived off collected taxes from companies operating within their boundaries, encouraging a more pro-business attitude.

The goal to maximize GDP has spurred innovation within the Chinese system. Successful experiments could be, and often were, replicated across other parts of the country. In contrast, Russia dictated all changes from the center, which lacked the feedback from local levels. Huang observes that regional autonomy prevented Beijing from enforcing central planning. The shift towards a market economy occurred not because the central authorities decided to make this transition, but because they lost the capacity to execute central planning effectively.

GDP served as the meritocratic element within this decentralized structure. Regional leaders were primarily evaluated based on this metric, which, in turn, granted them room for maneuver—the focus was on growth, regardless of how it was achieved. When GDP becomes the primary objective, concepts like class struggle or mass campaigns fade into the background, resulting in a more rational and stable system.

The Gaokao, China’s college entrance exam, and CCP schools represent the communist version of the keju meritocracy. Just as in imperial China, human capital today is channeled through the civil service examination system. The route to the top of the party passes through provincial governance, where GDP serves as the most important metric for assessment. 

This system may be witnessing a transformation; Xi is eroding its meritocratic character and restricting its autonomy. 

According to Huang, Xi’s leadership represents a profound shock to the reformist system established by Deng Xiaoping and his successors. Xi has steered China away from the political moderation that characterized the party’s approach since the 1990s. 

Although Xi’s predecessors also engaged in anti-corruption crackdowns, their efforts were surgical and, in contrast to the current campaigns, did not involve millions of people. Another instance of Xi’s new rigidity is the curbing of fintech and gaming industries, private educational services, and the real estate sector. The equilibrium between autonomy and control, or scope and scale, that has been so rarely achieved in China’s history has been unsettled by Xi’s actions, affecting not only the economy but also the very essence of the CCP system. The meritocratic emphasis on GDP has been overshadowed by vague criteria such as “political integrity,” paving the way for arbitrary political decisions. While the author acknowledges that the focus on GDP has led to issues like the fabrication of statistics or a disregard for environmental concerns, it is crucial to recognize that the alternative, that is political criteria, could prove to be far more detrimental.

As for the downfall of the USSR and the survival of the PRC, Xi has his own interpretation. According to him, the culprit is the so-called “historical nihilism”: the regime was destined to collapse as Marxist faith waned. Huang argues, however, that Xi overlooks the strengths of the reformist system built by previous CCP generations. As a result, the scope for political, intellectual, and economic autonomy has further narrowed: University curricula increasingly focus on Marxism and the Xi Jinping Thought, and private companies are required to introduce Party cells into their organizations. Contrary to viewing the private sector as the “crown jewels” of the economy, he believes China’s development stems from the design of party officials. 

This is where Huang’s thesis may show an excessive emphasis on market mechanisms. Undoubtedly, Chinese companies have demonstrated remarkable vitality, yet this vitality might not have been stimulated without the subsidies, preferential loans, or tax breaks provided by the state. The term “industrial policy” is scarcely mentioned in Huang’s book, which is regrettable. A more careful consideration of CCP’s neomercantilism could have lent more nuance to his argument.

Nevertheless, this observation does not diminish the strength of the thesis that under Xi, the issue of succession in the CCP has gained unprecedented importance. In the Chinese empire, succession was determined by heredity; in the PRC, its outcome is shaped by political maneuvering and factional struggles. Huang notes that in modern autocracies, 68 percent of power transitions occur through coups d’état. By contrast, in imperial China, violence accounted for only 38 percent of succession cases. While tensions over succession have frequently sparked crises within the CCP, they have not led to systemic collapse. 

On the other hand, under Xi, the author expresses concern that China may be drifting toward the pattern seen in modern autocracies. The elimination of internal opposition, the removal of term limits, and the cult of personality mark a clear departure from the “gentle politics” framework established by Deng Xiaoping, within which the PRC has functioned for the past several decades.

To China’s leadership, technology represents the paramount advantage in securing national power. Take for instance this study from a think tank affiliated with the Ministry of Security, which argues that in the realm of great power competition, technology is the critical determinant of success—a perspective repeatedly endorsed by Xi. 

In addressing the so-called Needham question—that is, why China, despite once having a significant technological advantage over the West, has lost its edge—Huang offers an original answer: the keju system. He argues that the intellectual homogenization and monopolization of human capital undermined the conditions necessary for innovation. The delicate balance between autonomy and control, crucial for the generation of new ideas and innovations, was reestablished only by the Communist reformers and lasted until the Xi era. Two critical factors contributed to the construction of this balance: Hong Kong and scientific cooperation with foreign countries.

Globalization has facilitated the development of international collaborations with research centers around the world, enabling Chinese universities to bypass the need for liberalization. Huang notes that “international collaborations provide access to foreign talent, capabilities, and ideas, as well as to the ‘think-different’ attitude that has been lacking and repressed domestically.”

Hong Kong has played an equally pivotal role in providing Mainland companies with access to venture capital, enabling them to circumvent the constraints imposed on the private sector. Without access to Hong Kong’s financial markets, companies like ByteDance or Lenovo, along with thousands of small and medium-sized enterprises, would have faced capital shortages and would never grow in such a rapid way.

Geopolitical tensions have resulted in a reduced scope and frequency of foreign cooperation. The clampdown on Hong Kong has transformed it from a bastion of free market principles and the rule of law into just another Chinese city (some claim that, to the contrary, a tighter integration would be beneficial for economic dynamism). According to Huang, these actions will ultimately harm the PRC, undermining the very foundation necessary for technological competitiveness.

If this book were read by someone with a hawkish view on China, they might draw two conclusions that could be unsettling for liberal minds. First: Further integration of Hong Kong into the PRC is a good thing, precisely because it will be a self-inflicted wound. Second: There is an argument for tighter restrictions on scientific cooperation (making, for instance, the admission of Chinese scientists contingent upon their agreement to work exclusively in the West).

The Rise and Fall of the EAST is a book about the crisis of China’s authoritarian meritocracy, so naturally it provokes reflection on the state of meritocracy in the West, where the idea that ability should determine success has become controversial in recent years.

While meritocracy once received strong support from the left, viewed as a pathway for social mobility for the working class, today’s attitude towards this ideal has shifted dramatically. Criticism of the SATs, justified by claims that these tests are saturated with bias against racial minorities, increased the importance of factors unrelated to ability like ethnic identification.

Populist critiques of meritocracy highlight two primary failures. First, the elites produced by this system have demonstrated a poor track record: From the Vietnam War through the occupations of Iraq and Afghanistan to the financial crisis of 2008, the “best and brightest” have often fallen dramatically short of expectations. Higher education, rather than enhancing their abilities, often inflates their self-confidence to delusional levels. The second accusation targets universities: they have shifted from recognizing the most deserving individuals to perpetuating privilege. 

As Adrian Wooldridge notes in The Aristocracy of Talent, meritocracy is the worst system—except for all the others. The principle that an individual’s place in society should be determined by ability and effort arguably represents the most universal ideal uniting the West today. Far from inherently favoring elites, this ideal originally emerged in opposition to the undeserved usurpation of positions within the social, political, and economic hierarchy.

In America, its heyday came at the beginning of the Cold War. The launch of Sputnik raised fears in Washington that the Soviets might win the brain race, and thus the geopolitical competition. It was during the early stages of confrontation with the USSR that standardized tests gained prominence, as tapping into the largest possible talent pool—effectively democratizing education—became imperative for national security. As Julius Krein explains: “Driven in large part by great power competition, university education went from a narrow, elitist pursuit—led by the Ivy League and ‘Saint Grottlesex’ feeder schools, along with regional replications—to a national and meritocratic endeavor.”

With the Cold War’s end, both the role of universities and the nature of American meritocracy underwent significant changes. Neoliberal policies, embraced by both the left and the right, led to the abandonment of capital-intensive sectors and spurred deindustrialization. As factories closed, elites promulgated the mantra that education would provide those affected by offshoring with access to “jobs of the future.” These promises failed to materialize. Universities did not usher in a bright future where everyone became knowledge workers; instead, they turned into a form of job insurance for the offspring of privileged families.

Krein suggests that the Claudine Gay scandal may herald a return to reason, as more colleges started to reinstate SAT requirements. The harsh realities of great power competition may dispel previous illusions. Nevertheless, there remains much work to be done. Alongside Krein’s proposal to eliminate diploma prerequisites for many jobs, another idea worth considering (similar to a practice in Singapore) involves financing the education of the most talented students in exchange for their commitment to work in state institutions for a certain period of time.

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The drive towards economic nationalism highlights the importance of achieving a degree of self-sufficiency in domains such as semiconductors. The economist Alex Tabarrok points out that this sector—and many others that are technologically challenging—requires workers with exceptionally high IQs. This raises the important questions of how to select these individuals, and how to prevent their talents from being misallocated in fields like finance or law.

Another issue concerns political meritocracy. The projects that policy-makers aim to implement today are so complex and multifaceted that asking questions about the cognitive capabilities of those making these decisions should be inevitable, yet is often overlooked, as this study demonstrates.

Finally, if America wants to take in immigrants, which ones? Research suggests that their potential to thrive and contribute to the modern economy is influenced by their cultural heritage, with notable effects persisting into the second generation. The effort of rebuilding the American system requires not only inventing a new kind of mercantilism, but a new form of meritocracy as well.