From Forbes. Opinion by Rob Cain.

What we’re witnessing now is a historic downshift in the velocity of China’s economic engine, and the wrenching effects of the central government’s increasingly desperate efforts to manage it. As long-term growth inevitably slows to below 7 percent per annum and the shining beacon of ever increasing prosperity for all dims, the Communist Party’s grip on power will become more tenuous, and its behavior increasingly reactive.

As an unelected autocratic regime, the Chinese government has only two levers for maintaining its legitimacy as the country’s uncontested ruling body. It can keep the people satisfied with steadily improving wages and opportunities, or failing that, it can resort to threats of violence against them to quell dissent.

The recent rise and fall of China’s stock markets are direct results of the central government’s unsuccessful efforts to prop up a dramatically slowing economy and create the illusion that all is well. Just as the Communist Party leaders have claimed credit for the 30-year economic ‘miracle’ that has seen a nearly tenfold increase in the size of the economy and the rise of hundreds of millions out of poverty since 1989, they must now ready themselves for blame as job growth falters and new wealth creation opportunities diminish.

But autocratic regimes don’t handle blame well. When things go wrong they must obfuscate the truth and distract the populace from grim realities, much as Russia’s Putin has tried to mask his weakness and ineptitude by wreaking havoc in Ukraine.

Back in the Spring of 2010, while the free world celebrated the democratic uprisings that swept out oppressive regimes in the Middle East and North Africa, China’s Communist Party leaders watched with alarm, keenly aware that the same could happen to them.

As they well know, China has a long history of rebellion, revolt and revolution, with wrenching overthrow attempts having occurred 18 times, by my count, in the 22 centuries since the Yellow Emperor unified the country in 221 B.C. Eight of those popular uprisings happened in just the past 400 years. China’s leaders don’t wish to resort to violence, but they’ll do anything necessary to maintain their positions of power and privilege.

For now, at least, that means increasingly risky fiscal measures to forestall the inevitable long-term slowdown. Most governments would welcome a GDP growth rate of, say, 4 or 5 percent, but after nearly three decades averaging 9 percent per annum, for China a halving of its GDP growth rate will be catastrophic.

China’s government has no choice but to continue its experiments in manipulation of the economy. And when those experiments fail, as many will, the impacts will be felt around the world.

Read more at  Forbes.