Opening Remarks

As Xi Jinping Reforms China, Expect Power Consolidation, Not Democracy


As Xi Jinping Reforms China, Expect Power Consolidation, Not Democracy

Photo illustration by 731; Photographs by Oscar Siagian/Getty Images (Xi); Carlos Barria/Reuters (arms)

Chinese President Xi Jinping is all about reform. That’s “reform” as in “kicking butt.” The main take-away from the Third Plenary Session of the Communist Party’s 18th Central Committee is that Xi has consolidated power remarkably quickly and is eager to use it. Some parts of his agenda impress outsiders, such as further relaxing the one-child policy and closing reeducation labor camps. Such steps defuse popular anger toward the regime. Other Xi initiatives are decidedly less appealing, like the vow to “utilize and standardize Internet supervision,” which is code language for censorship. But whether liked or disliked outside China, everything Xi intends to do is directed toward one goal: to consolidate the Communist Party’s central and permanent role as the leader of the nation.

Democracy is the yielding of power from the party to the people. That’s not what Xi wants. He wants to gather power inward on the theory that only a strong leader can govern a country in which the mountains are high and the emperor is far away. Getting local governments to toe the line “requires a lot of political brute force, and it’s something you can only achieve if you are extremely vigorous,” says Arthur Kroeber, Beijing-based managing director of economic research firm GK Dragonomics. Kroeber says Xi’s anticorruption campaign seems to warn, “Look, this is the way it’s going to be, and if you don’t like it, we have a lot of space in the jails for you.”

The theme of the third party plenum, held on Nov. 9-12, was “reform and opening up.” That’s a phrase consciously copied from an earlier third party plenum—the one in December 1978 at which Deng Xiaoping began to launch China into the global economy. Deng helped lift hundreds of millions of Chinese out of poverty, giving the world’s most populous nation what is now the world’s second-biggest economy. Xi wants to show his countrymen he’s determined to carry on Deng’s legacy, yet he draws inspiration from the man Deng repudiated: Chairman Mao Zedong. Xi’s father, Xi Zhongxun, fought alongside Mao. According to the official story, Mao saved him from execution, and the elder Xi repaid the favor by sheltering Mao and his troops at the end of the Long March retreat from the Nationalist forces of Chiang Kai-shek.

As a princeling, Xi is determined to demonstrate his ties to the founding generation. Intent on returning China to a purer past, he has presided over a crackdown on corruption that has netted senior party officials—even as members of his own extended family have become rich. He’s brought back the Maoist notion of a “mass line” that enforces ideological discipline by requiring officials to “listen to the people,” introspect, and cleanse themselves of any deviations from party doctrine. He isn’t making it easy for the people to speak, though; in September, China’s top court said Web users could face jail time if “defamatory” rumors they put online were read by more than 5,000 people or reposted more than 500 times.

Xi doesn’t trumpet his differences from his predecessors as an American would. Chinese leaders worry that the people will lose faith in the party if it seems to be swerving in different directions. (“Unswerving” is a big word in China.) So in its 60-point resolution, the Central Committee dutifully name-checks “Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the important thought of ‘Three Represents,’ and The Scientific Outlook on Development”—those last two being the slogans of past presidents Jiang Zemin and Hu Jintao, respectively. It’s as if Barack Obama obsessively paid tribute to President George W. Bush’s “compassionate conservatism.”

The assertion of continuity makes it tricky for outsiders to divine what Xi has in store. Chinese ideologists are every bit the equal of Chinese gymnasts in their ability to execute back flips and jump through hoops. Consider an issue that’s critical to foreign business executives: the fluid divide between the public and private sectors. The plenum resolution asserts that China must “vigorously develop a mixed-ownership economy” and that “in allocating resources the market must play a decisive role.” That’s music to the ears of foreign investors; previous documents gave the market a merely “basic” role. Yet the document also says, “We must unswervingly consolidate and develop the public economy.”

Which reflects the government’s true desires? The Chinese word for paradox translates literally as spear-shield, from the parable of a man who tried to sell a spear and a shield. The spear, he said, could pierce any shield. The shield could ward off any spear. Xi seems to be promising a market economy that’s better than any government-led one and a government economy that’s better than any market.

The paradox is more linguistic than real. Xi’s heart is with the Communist Party. While the Central Committee document praises the “vitality and creativity” of the market, it says the party must “adhere to the dominant position of public ownership [and] constantly enhance its vitality, dominance, and influence.” Xi’s determined to maintain control of the levers of power and to dominate what Lenin called the commanding heights of the economy. That’s why his idea of reform tends toward purification rather than liberalization. The party, he knows, will lose leverage if more lending goes through nonstate banks, if more production is done in the private sector, if reeducation labor camps are no more, and if the loosening of the hukou household-registration system reduces the government’s control over who lives where. But by relieving pressure in the Chinese system, such moves also serve to bolster the party’s legitimacy.

On that score, relaxing the one-child policy may have been one of the Central Committee’s easier decisions, because it pleases the masses without surrendering much central power. While it got big headlines abroad, at home it was buried deep in the 46th item of the plenum document. Before, both parents had to be single children to be permitted to have two children—now if one parent is a single child, the couple can have two children. The difference may be small: A team led by Gu Baochang, a demographer at Renmin University of China in Beijing, found that more than 90 percent of rural families in Jiangsu province favor having just one child. In any case, this is a magnanimous gesture from the top, not action at the grass roots.

Can Xi pull off this balancing act—pursuing an agenda of “reform and opening up” while expanding both the party’s power and his own? He’s only one man among 1.4 billion Chinese, and quickly he’ll butt heads with powerful vested interests: state enterprises, local governments, banks, other well-connected princelings, and security authorities. Xi could appeal to the people for support against the special interests, but that would be playing with fire: A populace that felt empowered might sweep the whole lot of officialdom aside, him included.

Sinologists took it as a sign of Xi’s quick consolidation of power that he managed to include his concept of a “China Dream” in the plenum. The American Dream is personal: Work hard, and there are no limits to what you can achieve. The Chinese Dream is about national greatness: “the great renewal of the Chinese nation,” as the document put it. Xi has warned that the Soviet Union fell because of ideological rot and lack of courage; he wants to ensure that the same fate doesn’t befall China.

Is Xi a reformer? On his own terms, certainly yes. But those who associate reform with democracy are bound to be disappointed.

Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.
Dexter_roberts
Roberts is Bloomberg Businessweek's Asia News Editor and China bureau chief. Follow him on Twitter @dtiffroberts.

The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus