The reform agenda will decide his future
On March 17, National People’s Congress of China reappointed Xi Jinping as China’s president with no limit on the number of terms he can serve. The NPC also appointed former top graft-buster and a close Xi ally Wang Qishan to the formerly ceremonial post of vice president. Xi, the most powerful Chinese leader since Mao Zedong, was given the right to continue in office indefinitely after the legislature scrapped term limits for the president and vice president only a week earlier. Throned as a lifetime president, Mr Xi is now expected to expand his long-running campaign against corruption within the party to include all state employees through the creation of a new National Supervisory Commission. He will also continue his ambition to implement a foreign policy and policies to upgrade the slowing economy.
The abolition of the two-term limit on China’s presidency caused a seismic shock across the world and sparked a global debate on the revival of strongman politics in the world’s second-largest economy. The issue has also dominated coverage of the National People’s Congress, China’s legislature, which concluded a two-week session in march.
The argument in support of the audacious move by Xi Jinping, the president, is basically that “everything must change so that everything can stay the same”. In other words, it is the offer of a safe pair of hands to push forward much discussed and delayed economic reforms to fulfil Mr Xi’s goal of “national rejuvenation”.
While the dizzying pace of Mr Xi’s changes have kept analysts busy trying to work out what kind of China he wants to lead, observers should be aware that the full effects of his new profile will take time to emerge. Nevertheless, some strands are becoming clearer.
Judging by the results of this conclave, Mr Xi’s policy agenda continues to be marked by multiple distinct elements. Ideological repression, institutional reshuffles and great power ambitions internationally coexist with an ongoing campaign against corruption within the Party.
But looking ahead, two benchmarks are likely to be used to assess Mr Xi’s record in comparison to that of his predecessors; Mao Zedong and Deng Xiaoping, both former Communist party leaders.
First, it will be the economy on which Mr Xi’s reputation endures or falls. China’s eventual economic transformation from low-cost manufacturing to an innovative technology power remains at the top of Mr Xi’s priorities.
In this area, the direction of Mr Xi’s economic governance is not likely to change despite the term limits being lifted. He continues to stress “mitigating major financial risks” and “state-owned enterprises reform”; two intertwined elements he largely failed to deliver during his first five-year tenure under a policy called “supply side reform”.
The likely appointments of Liu He as vice-premier and a new governor of the central bank will provide the driving force within Mr Xi’s administration for economic restructuring for the better. Both of them will have their reputations determined by the successful implementation of this agenda.
On SOE reform, Mr Xi has offered some clues by conspicuously omitting all CEOs of powerful SOEs from the Chinese Communist Party’s Central Committee at last October’s congress. This means their status in the party has been downgraded by Mr Xi and his team, as party ranks usually outweigh formal titles. Clearing this obstacle will make it much easier for Mr Xi to push forward SOE reform.
Previously, it was possible for SOEs to give only nominal support to Beijing’s reform agenda. Now both the newly- formed “National Supervision Commission” and “Banking and Insurance Regulatory Commission” are expected to make SOEs a primary target, providing additional mechanisms for the keeping them in line.
As a result, expect a flurry of overseas investments from Chinese SOEs and earmarked loans from state-owned banks under Mr Xi’s signature “Belt and Road Initiative”. This will take away resources from the market and into the domain of government planners. The drive to cut excessive capacity amongst under-performing SOEs is likely to be met by sporadic invocations of the social responsibility of such companies to keep people employed. Mr Xi must, therefore, carefully weigh the public’s appetite for accepting economic pain and social costs as part of SOE reform.
The second benchmark on which to judge Mr Xi’s next term is whether Chinese government institutions can meet the challenge of taking on an international role as a global power while simultaneously pursuing their domestic economic reform programme.
This includes a bureaucratic clean-up to better co-ordinate foreign policy, which has begun with the creation of State International Development Agency and the possible merger of the Office of the Central Leading Group on Foreign Affairs and the Communist party’s International Liaison department. However, this is only a starting point.
Bureaucracies in Beijing and the provinces are fundamentally rooted in a Sino-centric approach to the world. Driven chiefly by inward-looking impulses and intended primarily to meet pressing domestic needs, it is almost impossible for various ministries to see China’s national interests the same way or to speak with one voice.
Beijing must be fully aware that its words and deeds should not merely treat emerging economies and great powers as vehicles to advance China’s economic needs. If China continues to do so, backlashes that tend to isolate China are more possible.
The rest of the world still has a profound interest in a reform-oriented China. Mr Xi’s decision to abolish term limits has dashed western elites’ hope of China experiencing a democratic transition. Yet, even many of China’s most vocal critics appear to recognise that a more turbulent China may not be an easier or more co-operative partner.
Mr Xi is speeding up the shaping of China in his image. However, the lack of institutional constraints and differing opinions create the danger that hubris may infect governance. Leadership by control has not had an illustrious history.
He believes that moving China into a global leadership role requires major domestic economic reforms, and that achieving domestic reforms requires a centralisation of power in his hands. The risk is that giving himself these powers has already had and will continue to have the side effect of damaging China’s reputation internationally, threatening its foreign policy gains.
Both at home and abroad, the surprising decision to abolish term limits will be judged on its results.
Many unmurmured questions resonated at the heart of the recent decision during the surprise third plenary session of the 19th Communist Party Central Committee to lift term limits on the presidency amid the declaration of a new era under Xi Jinping “thought”. Three of the most important and taboo questions are: Can the system produce leaders? Does collective leadership work? And, to what extent are some of the key elements of Deng Xiaoping Theory being negated?
While Deng’s political reforms created a system that many non-Chinese observers have praised in hindsight given their dismay at the new reforms, the system didn’t work very well. Deng put in place four basic components: age limits, term limits, an intraparty election system and a talent cultivation scheme that groomed successive generations for leadership.
Nevertheless, this system did not produce a single top leader. Deng and the other senior party elders elevated Jiang Zemin directly in 1989, Deng tapped Hu Jintao to follow Jiang in 2002, and Xi rose 10 years later, a princeling who was, unexpectedly, a masterful politician. What did Deng’s system produce? It contributed to the rise of new factions and patronage networks, political gridlock and unchecked corruption.
Many have remarked that Xi’s status as a “princeling” or the son of a former powerful official, helped him to circumvent the system Deng put in place. But most princelings avoid politics, which is difficult and dangerous. It’s safer and easier to use political connections to acquire fortunes in less-challenging arenas. In fact, being a princeling sometimes works against you. One of the truisms of Chinese politics is never let the competitors know your ambitions or next moves; otherwise an incredible amount of opposition will organise to bring you down. Because princelings would be identified early on as aiming for top positions, it requires an incredibly deft hand to survive over the long term. Instead of guaranteeing success, being a princeling can make you a marked man.
Some years ago, there was a dinner party story circulating in Beijing among senior female cadres that the secret to understanding Xi’s success is best understood juxtaposed with another princeling and former adversary, Bo Xilai. The key to success, they argued, can be described as “wife and mother politics”. Whereas the latter’s mother died when he was young and his estranged wife’s criminal activities contributed to his downfall, Xi’s mother is still alive and his marriage to a savvy military celebrity appears strong and is the centrepiece of a “harmonious family” propaganda campaign.
It is well known that the mother in China is primarily responsible for the child’s education, and this is especially true when learning the art of politics. If we frame this in an older discourse, we might say that one is a princeling because of his father, but will rise as the emperor because of his mother.
There is a precedent for this in China’s dynastic history, sometimes called di shu zhi zheng, the “battle between the lines”, where the most politically astute empress or concubine would outmanoeuvre the others and assure her son’s and her own survival. Today, of course, things are different, but perhaps some elements of this culture remain. Additionally, there is the concept of xian nei zhu, which refers to women as “good helpers”, who capably improve their husband in all respects, including smoothing relations with the husband’s colleagues through grace and the wives’ network behind the scenes.
Concerns of misogyny and paternalism aside, Xi’s wife and mother are viewed by many as being masterful “helpers” and, therefore, central to his success. But the point here is that these elements, whatever their importance, were not part of Deng’s system. In fact, in the three generations before Xi, we rarely saw the women who were closest to the senior leaders, a legacy related in part to Mao Zedong’s public marriage to Jiang Qing, the vilified leader of the Cultural Revolution’s Gang of Four.
Is Deng’s system finished and is collective leadership a pipe dream? In part, both are being suspended, at least at the highest levels, but the talent cultivation system will continue to identify and groom capable leaders who, at the very least, will serve across generations as line managers, if not more. Quite possibly, breaking down factionalism and patronage networks will improve the meritocratic qualities of the system, especially if coupled effectively with proposed reforms aimed at hiring and supervision.
Meanwhile, the emphasis on Xi as the “core”, the canonisation of his thought in the party and state constitutions, the lifting of term limits and the fact that no successors have been named, all indicate that collective leadership has been suspended for the most part, at least at the top level. While many will view this as a tremendous step backwards, it is perfectly sensible all the same. After all, Deng’s system didn’t really work, and the extent to which it did, produced the very problems that have resulted in today’s reforms. Anyway, the party was never going to reform itself step-by-step into a multiparty system with checks and balances, as some well-known scholars romanticised at the height of factional gridlock.
By elevating his thought above his predecessors’, even Deng Xiaoping Theory (in Chinese, “thought” outranks “theory” typologically), and by negating some of Deng’s key reforms, it is clear that Xi is targeting Deng primarily. Critics will fret that this marks a return in some respects to the Mao era. Beijing, however, will rationalise these developments in Chinese Marxist terms, as the negation of the negation, as responding to changing conditions and new requirements.
Another truism in China is that political theory follows politics, and not vice versa. But, at a recent high-level conference of Chinese Marxist scholars, one remarked that it is not yet clear that Xi’s break with Deng is decisive. He noted his work on a new book on Chinese Marxism, and his lack of conviction that Xi deserves his own chapter, the way Mao and Deng do. That’s all well and good because it is too soon to draw conclusions. Indeed, a true Marxist imagines the possibilities but never prognosticates. And that’s assuming there are any true Marxists left at the table.