The decision by China’s legislature to scrap the term limit of 10 years in the presidency pulls the curtain aside on Xi Jinping’s radical transformation of the regime. He was elevated to party boss in 2012. Since then he has tightened all the reins of dictatorship. Any semblance of opposition has been crushed, even small feminist groups that were organising protest against sexual harassment on public transport. Their sin was not in their cause, but in the act of organising outside of the party system. Human rights lawyers have been detained or put out of business en masse. Censorship and internet control is more penetrating than ever. Internally in the Party, discipline is the mantra, and all potential opinion has been silenced with the help of the anti-corruption campaign. Xinjiang, the predominantly Muslim province in the west, has been turned into a surveillance state laboratory, including with the deployment off the most advanced electronic tools of the trade. The political activist Yang Maodong was right when, in his trial in 2014, he defied the court with an eloquent defense statement in which he compared today’s China “blow by blow” to the nightmare state of George Orwell’s 1984. That likeness has since become ever more perfect.

The world looks to China and sees an economic giant. But the China they ought to see is a political giant. Xi Jinping’s project is to make totalitarianism work. For that he needs a strong and growing economy, but in his project the economic is in the service of the political. What always counts is the regime itself and its perpetuation.

Xi inherited a regime of pragmatic authoritarianism under collective leadership. Now pragmatism has been superseded by ideological fervor, Xi’s omnipresent “China Dream” of national rejuvenation and greatness. Collective leadership has been abolished, now formally so with the clearing away of any time limit on the Red Emperor’s reign. With both pragmatism and collective leadership gone, Xi stands on a pedestal of power previously occupied only by Mao.

China is an economic giant and governments and corporations obviously want to do business. But when you do, you should know that you are dealing with a totalitarian dictatorship, inspired by nationalistic ideology, with a confident one-man supremo at the helm. If you think that kind of state is a cuddly teddy of benevolence, you have not learned much from history.

Rather than engaging in balanced collaboration China is pursuing domination. It is undermining the rule of law in Hong Kong. It is threatening Taiwan with annexation, in which matter the will of the people of a democratic country is to count for nothing. It has de facto turned 3 million of the South China Sea’s 3.5 million square kilometers into its own territorial waters, in contravention of international law and a ruling of the Tribunal of the Law of the Sea, and is building bases, some of them military, in other countries’ waters. Australia and New Zealand are on the forefront of China’s purchase of influence abroad, in persistent interference in politics, media and universities, described in a recent Australian book as a “silent invasion.”

Beijing may not be imposing its model on others, but it is imposing something else: silence. If you want to collaborate, be you a business, an organization or a government, you are not allowed to say or do what the men in Beijing see to be unfriendly.

Recently, Mercedes-Benz happened to mention the Dalai Lama in promotional material outside of China, met criticism in China, and quick as a flash removed all reference to His Holiness and apologized for “hurting the feelings” of the people of China.

If you were to cross the regime, you will be in danger of retribution, such as exclusion from operations in China. Environmental NGOs like Greenpeace, the World Wide Fund for Nature and Conservation International are silent on China’s environmental destructions in the South China Sea.

Last year, China and Norway “normalized” relations (which had been cut off for six years after the Nobel Peace Prize had been awarded to the human rights activist Liu Xiaobo). What Norway had to pay for “normalization” was a promise to undertake no action that could disturb the new harmony between the two governments. Since then, a government whose identity in the world rests on its championship of democracy and human rights, has had not a word to say about human rights abuses in China.

It is not a matter of general concern that power shifts in the world. The west, America, have no God-given right to preeminence. But it is a matter of concern that the rising power is a state that is repressive towards its own population and hostile to others’ liberty. It is a matter of concern that a state that has annexed vast territorial waters and is threatening to annex a neighbouring democracy is able to use its economic clout to buy silence on the part of countries that claim to live by democratic values and international law.

What to do? First, we must understand and acknowledge that in China we are dealing with a totalitarian state with immense powers behind it. We must free ourselves from Western wishful thinking that with economic growth and opening up, China is becoming more like us and more benevolent at home and collaboration abroad. That has not happened. Xi’s regime is exercising totalitarianism with more strategic discretion than any before it – smart totalitarianism, I have called it – but totalitarian it is.

Secondly, we – the democratic governments of the world – need a coherent strategy for meeting the challenge of China. The liberal democracies, says the German sinologist Kai Strittmatter, must find their voice up against assertive autocracy. China deals as much as it can with each country on its own, in which case most countries are small fry next to the giant. We need a collective strategy. Currently, the hope, if distant, is for the European Union to mount such a strategy, since President Trump has placed America on the sideline.

A collective strategy should have three components:

1. We should engage with China on all levels, politically, economically, in science, in culture and so on. That it inevitable and is also strategic. The more we can pull China into engagement, the more Chinese institutions will be under the influence of international law and standards of collaboration.
2. We should speak up in clear language, to Chines authorities and in public, against repression and breaches of human rights in China. This we should always do with reference to the Chinese State Constitution and to Chinese law, which are in these respects sound (although ineffective).
3. We should speak up in clear language against Chinese aggression internationally, notably in its neighbourhood, and against interference in politics and civil society in other countries. This we should always do with reference to the many relevant international treaties and conventions that China has signed up to.