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Chinese Politics: More Twists and Turns

By Jonathan Brookfield 

A year ago, I noted the importance of speed for Xi Jinping.  In particular, it seemed incumbent on Xi to move quickly to establish his authority and engage in activities that could help ensure his control of the Politburo Standing Committee (PSC), the highest policy making body in the People’s Republic of China (PRC).  A year later, Xi’s intention to move quickly to consolidate his leadership position seems increasingly clear, and politically, he seems to be operating with an increasingly deft hand.  That said, with the property sector cooling off and economic growth in the PRC coming in on the low side of expectations, all of Xi’s political skills are likely to be put to the test as economic constraints begin to tighten.   

As far as speed is concerned, after the third Plenum in 2013, many foreign commentators were impressed with the potential breadth and depth of Chinese economic reform.  More recently, Barry Naughton, a China specialist at the University of California San Diego, has described Xi Jinping as being engaged in a kind of “shock and awe” campaign.  He sees Xi as currently engaged in economic reform, an assertive nationalism, anti-corruption, and a crackdown on the free expression of ideas, while simultaneously looking to re-establish strong party leadership.  In particular, by heading up the Leading Small Group for Comprehensively Deepening Reform, Xi has effectively taken over responsibility for economic policy making.

In that context, some analysts have worried about the disappearance of top-level design (ding ceng she ji) as an idea.  With incremental reform stalling, the idea of broad, structural reform initiated by top leaders, as opposed to a more cautious, Deng Xiaoping “crossing the river by feeling for the stones” (mo zhe shi tou guo he) approach to development, seemed to hold out the promise of substantial economic liberalization.  If, however, the concept turns out to be an empty slogan, the likelihood of significant economic change in China seems greatly reduced.

Ultimately, I am not so concerned about top-level design as an economic idea, as I see the concept as less an economic reform package and more a political opportunity for Xi Jinping to strengthen his authority and power within the Chinese political system.  To that end, a major program with no clear goals, where anyone could potentially be wrong, seems far preferable to something with clear objectives and targets.  If Xi were looking to put some pressure on opposing forces, it is hard to imagine a better environment.  Moreover, as far as evaluating the success or failure of the program afterwards, as the saying goes, “if you don’t know where you’re going, any road will get you there.”

This is not to say that the Chinese political landscape is progressing exactly as expected.  I find Xi’s decision to take charge of reform and his early efforts to sideline Li Keqiang somewhat surprising.  Personally, I thought Xi would allow Li to grab the poisoned chalice of responsibility for the economy, and then use any kind of economic underperformance to sideline the Premier. 

Recent headlines also present something of a mixed picture as far as intuiting the future.  In mid-September, The Wall Street Journal reported that China’s central bank (the People’s Bank of China) injected a total of 500 billion yuan ($81 billion USD) into the country’s five major state-owned banks.  While the additional government stimulus could be read as an indicator of a vigorous, active government trying to avoid a significant slowdown in economic growth, the action appears to be a relatively modest, grudging, targeted effort to support the economy, rather than a return to anything like the broad credit opening of 2009.

Given the mild response by China’s central bank, however, the recent Wall Street Journal report on efforts to remove Zhou Xiaochuan as head of the People’s Bank of China may be something to keep an eye on.  Zhou has been described as having “a long and impressive resume as a designer, implementer, and advocate of market-based economic reform.”  If Zhou were to step down and not be replaced by another reform-oriented official like Guo Shuqing, that would seem to indicate a distinct edging away from economic liberalization and financial sector reform.

Still, as far as Chinese politics is concerned, the road always seems to involve a number of twists and turns.  In March, Xu Caihou, former Poliburo member and vice-chairman of the Central Military Commission, was taken from his sick bed in Beijing and detained, and in June, accused of accepting bribes, he was expelled from the Communist Party and turned over to military prosecutors for a court martial. This is significant because Xu Caihou has often been considered an ally of former Secretary General of the CCP Jiang Zemin.  In addition, after reports earlier in the summer that Wang Jiankang had been detained, in August it was reported that Wang had re-emerged in public at a meeting where he gave a briefing on agriculture.  With Wang being Ling Jihua’s brother-in-law and Ling Jihua having been one of Hu Jintao’s key lieutenants, this latest report is also interesting.      

Taken together, if the two stories represent a slowing of Xi’s efforts to go after Hu and a ratcheting up of pressure on Jiang, that would be news indeed.  It would also seem to indicate abilities on Xi’s part to prioritize and build coalitions of convenience, skills one could imagine being quite handy for surviving the intense political environment in Beijing.  In line with a number of commentators, Nicholas Lardy, a specialist on China at the Peterson Institute for International Economics, has stressed the importance of rebalancing China’s economy.  With the PRC facing falling property prices and slower growth, initiating any kind of significant rebalancing may prove unusually challenging, and Xi is likely to need all his political skills to negotiate the road ahead.  

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Jonathan Brookfield is an Associate Professor at the Fletcher School of Law and Diplomacy at Tufts University.

[Photo courtesy of APEC and Wikipedia ]

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