As the U.S. sinks deeper into recession and China gorges itself on ever greater quantities of American debt, you will start to hear about the "Chinese model" and the end of American hegemony. Yet China remains tethered by a stiff leash which will ultimately choke the charging tiger once it runs out slack: its government. As Wu Bangguo, chairman of the Standing Committee of the National People's Congress (NPC), declared last week, the government has no plans nor desire to institute Western-style democracy:

We must more fully recognize the essential differences between the system of people's congresses and Western capitalist countries' system of political power...China's system of political parties is a system of multiparty cooperation and political consultation under the leadership of the Communist Party of China (CPC), not a Western-style multiparty system...The NPC Standing Committee must draw on the achievements of all cultures, including their political achievements, but will never simply copy the system of Western countries or introduce a system of multiple parties holding office in rotation, a system with the separation of the three powers or a bicameral system.

Americans take great pride in our freedom, and many imagine that freedom is the root of our economic power. But lack of freedom is not the leash that holds the tiger. While industry must have some latitude in order to grow, China has demonstrated that rapid growth is consistent with totalitarianism, and history contains many examples of dynamic economies under despotic regimes. Most notably, Germany suffered from 30% unemployment under the Weimar Republic, while the Nazis achieved essentially full employment, producing "the most rapid decline in unemployment in any country during the Great Depression."

But there is one critical attribute of Western democracy that China will never be able to replicate without meaningful political reform: change. Institutions inherently trend towards calcification. It happens to nations, corporations, organized religions, and other large organizations. A class of leaders embeds itself in the structure of the organization. Their ideas become outdated, they stop responding effectively to external changes, they protect their own from scandal, and they focus on retaining their own power rather than leading their organization forward.

What true democracy offers is the opportunity every once in a while to throw the bums out, as so fortuitously occurred early this year in the U.S. New blood and new ideas spill into the empty halls. Failed policies and useless personnel get dumped. Political criminals face prosecution. The nation moves on to a brighter future.

But Wu made clear that China is not interested in change, and the Chinese government has often proclaimed that stability and social harmony are its greatest priorities. Under an effective, dynamic government, stability and social harmony are worthy objectives, but under dysfunctional leadership, they become euphemisms for stagnation. A case in point is Japan, another Asian nation that stresses stability and social harmony. Japan is a democracy in name and form, but in practice, it has been led by the same party for half a century. As I've written previously, Japan enjoyed incredible growth for three decades, but now Japan's zombie banks are mirrored by zombie leaders whom the Japanese people stubborn refuse to oust.

Without political reform, China will eventually suffer an even worse fate. The roots of China's eventual deterioration have already set in a culture of corruption so endemic that there is a national sales spike in luxury goods before national party congresses. Over time, the politicians will become fatter and corruption more entrenched. Merit will cease to be rewarded, and ineffective leaders will mulishly pursue policies that promote their own hold on power at the expense of their peoples' well-being. Without democratic elections, the people will be unable to throw their bums out, and the tiger will choke on its rope.