China’s Leadership, Reshuffle and Xi’s New Era

A man whose name was largely unknown outside of China just a few years ago has become the rising Asian giant’s most powerful leader in decades. Chinese President Xi Jinping, now officially recognized as the supreme leader and the ‘core’ of the Communist Party of China, controls more power and authority than almost all of his modern predecessors. Since he took power five years ago, he has taken on around a dozen leadership titles, putting him at the head of numerous major political and military decision-making bodies. He has entrenched his position at the top, so much so that some China watchers wonder if he will step down at the end of his second term.

On October 25, China’s Communist Party elevated President Xi Jinping to the same exalted status as the nation’s founding father, Mao Zedong, by writing his name and ideas into the party constitution. The historic decision to incorporate “Xi Jinping Thought” in the constitution was based on a unanimous vote that took place at the end of a week-long party congress. The decision sends a clear signal to officials throughout China that questioning Mr Xi and his policies would be ideological heresy. The decision solidified President Xi’s position as China’s most powerful leader after only five years of leading the country, making it harder for rivals to challenge him and his policies.

To add to his outstanding record, President Xi has steadily increased his grip on power since becoming leader in 2012, which only means that any challenge to Xi will now be seen as a threat to Communist Party rule. Shortly after taking office for his first term, Xi launched a massive anti-corruption campaign that has since led to the downfall of over one million Chinese officials. Some observers have criticized the campaign as an attempt by the president to purge political rivals. But, reality is that he has done a great job in eradicating corruption. His power is so widespread in today’s China that anyone challenging him will be seen as committing a political crime. This shift in Chinese political thinking is symbolic of Xi’s growing power and presence in Chinese party and government affairs.

Officially, the Great Leader

The previous Chinese Communist Party leaders have had their own ideologies incorporated into the party’s constitution or thinking, but none, besides the founder Mao Zedong, have had their philosophy described as a “thought,” which is at the top of the ideological hierarchy.

Only Mao and Deng Xiaoping have had their names attached to their ideologies – Deng’s name was only added to the constitution after his death.

Moreover, the schoolchildren, college students and staff at state factories will now join 90 million Communist Party members in studying “Xi Jinping Thought” on the new era of “socialism with Chinese characteristics”.

The expression “new era” is the party’s way of saying this is the third chapter of modern China.

If the first was Chairman Mao uniting a country devastated by civil war, and the second was getting rich under Deng Xiaoping, this new era is about even more unity and wealth, and at the same time, making China disciplined at home and strong abroad.

Enshrining all of this under Xi Jinping’s name in the party constitution means rivals cannot now challenge China’s strongman without threatening Communist Party rule.

What made Xi an outstanding leader?

Restoring China to greatness is a central message of President Xi’s philosophy. That goal already has guided his policies of building up the military, strengthening domestic controls and raising China’s profile in contemporary global affairs.

After President Xi assumed power in 2012, he surprised many by quickly taking control of the country. This included putting his imprint on two of China’s most powerful institutions, the party and the military, which he did using a sweeping anti-corruption drive.

On the other hand, the Chinese economy, state and military are much more powerful now than they were under Mao, or even under Deng, which gives President Xi far more global influence than his predecessors.

President Xi has worked to reassert the party’s influence across all sectors, including in schools, the media and the private businesses that are driving China’s economy. His first five years in power have seen China adopt an increasingly assertive foreign policy, challenging the US military’s dominance in Asia. This has included a new assertiveness on the international stage, as evidenced by Xi’s ambitious economic and trade initiative – the One Belt, One Road plan – and his attempts to take up the mantle of globalization and environmentalism.

Xi’s new leadership has been more obvious in China’s foreign and military policy. More than his predecessors, Xi has tried to leverage China’s diplomatic and military strength to press Beijing’s territorial claims in the East China and South China seas, and lock in the country’s interests on its western flank. In the South China Sea, Beijing has continued the building up and militarization of islands, reefs and islets. Despite repeated and vociferous objections from the US, UK, Philippines, Australia and other parties, China has stared them all down and largely won the argument.

As President Xi has shored up his political power, he has also ramped up his control of the People’s Liberation Army (PLA). Speaking on the 90th anniversary of the founding of PLA in August this year, Xi emphasized the party’s “absolute leadership” over the military, which he has pushed hard to modernize and which has been a major target of anti-corruption efforts. In his speech, Xi emphasized the importance of the PLA’s combat readiness, saying that ongoing reforms of the army are key to ensuring its “readiness to defend state sovereignty and maritime interests.”

China has also improved military ties with Russia, staging a major joint naval drill near St. Petersburg in August.

Russia is also a big player in China’s One Belt, One Road initiative, a series of trade and economic deals which stretch Chinese influence across Eurasia and much of Africa.

Both Europe and Africa have been targets of Chinese investments and aid – increasing economic ties with the European Union and funding major infrastructure projects across much of East Africa and other parts of the continent. Beijing is also poised to replace Washington as the major donor for much of the developing world.

The Xi Jinping Thought

By adding “Xi Jinping Thought” to its constitution, the Communist Party of China has signalled that it will put environmental protection and other quality-of-life issues on more equal footing with its historical emphasis on growth.

Here are eight excerpts from the amendments, and how they may shape the economy:

1. Principal Contradiction

“The principal contradiction facing Chinese society has evolved and is now that between the people’s ever-growing needs for a better life and unbalanced and inadequate development; it reflects the realities of the development of Chinese society,” says President Xi.

This is an epochal change. Historically this contradiction was about balancing meeting people’s needs with upgrading production. The change acknowledges rising inequality and citizens’ demands for economic gains along with cultural, societal and environmental benefits. Economists say this suggests policymakers have more leeway to let near-term growth slip as they increase their focus on environment and social equality.

2. Open Development

“Innovative, coordinated, green, and open development that is for everyone.”

This emphasis is another sign, leaders want the economy to move up the value chain and also provide for a cleaner environment.

3. Better Quality

“Achieve better quality and more efficient, equitable and sustainable development”

This expands on the implications of the “principal contradiction” shift, further confirming that leaders wants to steer away from a growth-at-all-costs approach.

4. Decisive Role

“Give play to the decisive role of market forces in resource-allocation and ensure the government plays its role better.”

This call for allowing greater influence for market forces hasn’t lived up to expectations since it was first made at a high-level meeting in 2013. Still, its new place in the constitution shows cadres want the “invisible hand” to work alongside that of the state.

5. Advance supply-side structural reform

This often-repeated call forms the core of Xi’s recent emphasis on cutting over-capacity and reducing leverage while also boosting domestic demand. This year’s de-leveraging campaign doesn’t let leaders claim victory just yet, but they’ve made progress in crucial areas. Inclusion in the constitution might indicate greater emphasis to come.

6. Lucid Waters

“Lucid waters and lush mountains are invaluable assets.”

This is one of Xi’s pet phrases on environment protection. Chinese welcome the clean-up push, though it may prove to be a short-term drag on economic growth.

7. Belt and Road

Xi has called his plan to rebuild ancient trade routes the “project of the century.” Adding it to the constitution helps “strengthen the willingness of other stakeholders such as private sector firms and financial institutions to taking long-term investment stakes.”

8. Higher Standards

“Develop an open economy of higher standards.”

This offers assurance to foreign companies that have long complained Beijing puts up market barriers.