Tag Archives: leadership transition

A New Gang Of Seven To Rule China

A list of the seven men who will comprise China’s new inner ruling elite is emerging. Only two of the nine current members of the Politburo standing committee are not retiring in this once in a decade leadership transition. They are Xi Jinping, heir presumptive to President Hu Jintao, and Li Keqiang, who is expected to take over the prime ministership from Wen Jiabao.

Only five of the seven retirees, it seems, are going to be replaced. A smaller Politburo standing committee will make it easier for Xi to assert his sway over a body that rules by consensus. That he needs a smaller group to achieve that indicates the depth of the divisions remaining within the Party. Not that the fact that factions within the Party vie for power and position comes as any surprise. The Bo Xilai scandal bears ample evidence to that, albeit an only too rare example of it breaking into public view.

The list of names now doing the rounds suggests that the jockeying continues. China’s factional infighting is a matrix of constantly waring but shifting alliances. Broadly, on one side, are  those who believe the Party’s future legitimacy to rule depends on delivering rising living standards through the existing mechanisms of state capitalism and maintaining the stability that requires through traditional political and social control. On the other side, are those who believe that China has developed to the point at which delivering ever higher standards of living can only be done by embracing fundamental economic reform, even at the cost of disrupting deeply entrenched vested interests. The vested interests line up as opportunity suits them.

How this scrap plays out is more than an matter of idle political pugilism. As we have noted before (see: The Battle Behind The Birthday For A Billion), this leadership transition takes the Party across a demographic Rubicon. The new leadership’s working political life has only known China transforming itself as a rising political and economic power, even if its members are as pragmatically committed as their predecessors to the Party’s monopoly on power. The split, as noted, is whether the basis for that should be ideological or economic. With China’s economy at a critical moment of transition, how that resolves itself will matter greatly to the rest of the world.

The gang of seven reflects the forces on both sides of that divide, and the outgoing leadership’s attempt to bridge it (harsher critics might say, to paper over the cracks). Most obvious is the apparent omission of Wang Yang, the 57-year old Guangdong party boss who is the most public advocate of political reform, save perhaps for Wen, in the upper echelons of the Party, and the inclusion of Liu Yunshan, the Party’s 65-year old hard-line head of propaganda. Wang’ passing over may be price that has been paid for Bo’s ousting.

Wang Qishan, now a vice-premier, is the leading economic reformer among the seven, with Zhang Goali, the Party boss in Tianjin, in support. The remaining two of the septet, Zhang Dejiang, who was sent to clean up Chongqing after Bo’s ousting, and Li Yuancho, who heads the Party’s organization department, are Hu loyalists. There are to protect his legacy and ensure the stability he sees as vital. They will act as cautious brakes on too rapid reform. How much impetus Xi choses to give to reform will be the deciding factor.

The list bears the imprint of former President Jiang Zemin,  a powerful if increasingly spectral background figure still. It is said to be the work of him, Hu and Xi, a consensus list for a consensus leadership that will be led by a compromise candidate, acceptable to princelings (of which he is one), nationalists, party apparatchiks, generals and reformers alike, all groups, it should be said, that overlap and interweave.

It is also not the final word. It still could face challenges from powerful party elders who fear they or their interests could be attacked or marginalized under the new regime. Reformers could make a bid to get Wang back on the list. There might be a move to include a woman, possibly Liu Yandong, the state councilor responsible for health, education and sport education. The standing committee could yet stay at nine-strong.

The Party plenum starting on November 1st is when the list will be finalized. It will then go to the Party Congress due to start on November 8th to be rubber stamped. Then comes a couple of years of Xi sparring with Hu as the outgoing president successively yields his Party, state and military offices while attempting to cement his legacy and power behind the throne.

It is worth remembering that Hu first championed Li as his successor but threw his support behind Xi when it became clear that Xi was outflanking his competitor. Cunning, calculating and ambitious Xi plays politics like a chameleon playing poker. The new team may be more in his own image than at this point we imagine.

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Reading Between The Lines Of The Official Bo Xilai Narrative

There are three aspects to a leadership transition, a well-connected Chinese economist told this Bystander: the personal and factional jockeying for power; the ideological/directional debates; and the exceptional cases. The downfall of Bo Xilai, now stripped of all his Party posts, falls into the third category, she reckons, though it clearly cuts across the first two.

The new left–the neo-Comms and Maoist revivalists, among whose number Bo was counted–have been put on the back foot by Bo’s ousting. The relatively small number of places in the new Politburo and its all-important standing committee, the inner sanctum of Party power, have likely been already broadly decided, but the reformers should now be able to put more of their supporters into key positions in the bureaucracy and provincial government. The neo-Comms and Maoist revivalists have not necessarily lost the ideological debate, or at least not definitely. Bo was both a populist and popular. Support for his ideas persists both among the public and within the Party, if not sufficient to save his political career.

There is likely to be a show of consensus, however. Top Party leaders will seek to keep a tight grip on the judicial investigation into Bo, his wife Gu Kailai and the former head of the Chongqing police, Wang Lijun, whose visit to the U.S. consulate triggered this incident, and where, it now emerges, the first accusation was made that British businessman and Bo family associate, Neil Heyward, had been murdered, with Gu and a family employee involved.

What needs watching is how the official narrative of Bo and his wife is played out. State media are starting to lay down the exceptional-case story, and emphasizing that no Party member, their spouse or family is above the law, even if that family is a princeling–or, more particularly to our eye, that even a princeling family isn’t above the law if it embarrasses the Party or puts political stability at risk .

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Beijing Shakes As Bo Xilai Suspended From Politburo

As aftershocks go, this will have stronger reverberations than even the original earthquake. Bo Xilai, the sacked Party boss of Chongqing, has been suspended from the Politburo and the Central Committee for suspected “serious violations of discipline”. His wife, Gu Kailai, has been placed under judicial investigation, along with a family employee, Zhang Xiaojun, in connection with the death of a British businessman and long-time family associate, Neil Heyward, who was found dead in a hotel room in the city last November. State media say police are now considering it to be a murder case.

Bo’s fall from grace has already sent tremors through Chinese politics in the run up to a leadership transition in which he had been expected to be promoted to the Party’s ruling inner sanctum, the Politburo standing committee. One of the Party’s rising leaders and, like his wife, a princeling, the charismatic and popular Bo’s sacking triggered–or was triggered by, it is hard to be sure in the opaque world of Party politicking at the highest level–the biggest political crisis since 1989 and the days of Tiananmen Square.

What comes next is anyone’s guess, or at least of anyone outside Zhongnanhai, the leaders’ compound in Beijing. There is a deep, if not clean factional divide between those who want the Party’s legitimacy to monopoly rule to be based on ideology derived from the mandate of Mao (in which camp Bo and his supporters fall), and those who wish to continue to base that legitimacy on the Party’s ability to go on delivering rising living standards for all Chinese, a course that now turns on scaling back the state’s role in the economy and giving the private sector more scope to expand. That raises, first, the question of how far can the Party scale back its economic control without yielding political control, and, second, how to deal with the challenge economic reform poses to many of the vested interests among the princelings and the military who derive their power, money and influence from the institutions and honeypots of a heavily state-directed economy.

Bo’s suspension from the Politburo means he has now lost all his key Party posts. As such it marks an important turn in that debate. How its consequences will shake out, and particularly if there will be a wider purge of the old guard — Zhou Yongkang, the Party’s security head and considered a Bo ally, may be the key figure to watch in this regard — takes a braver observer than this Bystander to hazard guesses at at this point. The political ground in Beijing is still shaking, and we are yet to see who else will be rattled.

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Mr Xi Visits America Again

Xi Jinping, the Chinese vice-president the rest of the world is taking to be China’s next president, visits the U.S. this week. It is a land he knows better than apparently the U.S. knows him. Xi is seen above (center, with plastic cup) at a picnic in Muscatine, Iowa 27  years ago with a visiting Hebei provincial agricultural delegation. He will be returning there with great PR fanfare during his latest trip. This Bystander thought it timely to republish a piece we first published last July  looking at Xi and China’s most important leadership transition in the three decades since Deng Xioaping set the party and country on the road of economic reform.

China’s next top leaders will, for the first time, be men born after the Party seized power in 1949. With their ascendancy, modern China will cross a political and demographic Rubicon. Their generation is the great, great grandchild of Mao’s first generation of leaders. Their youth occurred during the Cultural Revolution, when many of their families were purged, but they embraced the Party nevertheless, and many advanced through its ranks by being “redder than red”. They are more worldly than their predecessors, mostly educated at top Chinese universities, more likely than their predecessors to have social science rather than engineering degrees, and be more likely to send their own children to top U.S. and European universities. Their working political life has only known China transforming itself as a rising political and economic power, yet they are as pragmatically committed as their predecessors to the Party’s monopoly on power, if divided over whether the basis for that should be ideological or economic.

The distinction matters. China is at a critical stage of its economic development. It has, self-evidently, developed at great pace through the initial phases of industrialization and urbanization over the past 30 years. Now it must kick on and leap the great wall that has stopped other developing nations completing the transformation to a developed economy.

When per capita income reaches $10,000-12,000 a year (in 2007 dollars), developing economies tend to stop developing without institutional change. China’s annual per capital income is $4,000. At current growth rates that gives it less than a decade–the watch of the new leadership–before it hits the wall. It will need to make deep structural reforms, both economic and political, if it is going to be able to vault it. Regardless of the fact that even if it does clear the wall, China will still be a middle-income country–absolute size of the economy is irrelevant in this respect, even if China passes the U.S. to become the world’s largest economy–no country has yet managed to be both developed and a single-party state.

That sets up a dilemma. If the Party’s legitimacy to monopolistic rule depends on continuing to deliver the economic growth that keeps its citizens getting richer and the country stronger and if China’s rapid economic growth cannot continue beyond a certain point without institutional reform, then managing the role of government in the economy and overcoming state-owned vested interests–in other words reforming itself–becomes the new leadership’s most important concern.

If, on the other hand, the Party’s legitimacy to monopolistic rule rests on an ideology of the mandate of Mao, it will still need to forge a statist economy that can deliver the economic development to ensure social stability and regional clout, and be unable to escape the fact that economic growth cannot continue beyond a certain point without institutional reform to support its move up the arc of development and prevent the ossifying of incumbent interests. So, again, managing the role of government in the economy and arbitrating between state-owned vested interests becomes the new leadership’s most important concern.

China is not only self-evidently non-Western, but it has a self-consciously distinct history, culture and political system, so it could develop a distinct economic system. Chinese exceptionalism is not anymore unreasonable than American exceptionalism. But in that event, the Party will still have to operate and against a back-drop of a globally connected economy in a world that is already wary of China’s perceived mercantilism and rising power and status. Though unlikely, that could make China turn inward and neo-isolationist, relying on its growing internal market and a demographic bias to becoming a deficit country over the next decade, to drive the next stage in its economic development.

For now, there is every indication that China will continue on its present course. Indeed, there is a plan for that. The new leadership will come into position midway though the current five-year plan. Yet what looks from the outside to be a seamless transfer of power from one generation of leadership to the next belies the factional infighting that occurs out of public view.

So far, it is the princelings, the descendants of Mao’s original revolutionary leaders, an elite collective dynasty of some 400 families who hold extensive sway over the Party, army and the economy, that are coming out on top. One of their own, Xi Jinping, born 1953, is emerging as Hu Jintao’s successor as paramount leader, successively taking over from Hu the positions of Party general secretary in 2012, president in 2013 and chairman of the Central Military Commission in 2014. By then the top Party, state and military jobs will again be united in one man, if Xi successfully consolidates over the course of the two-year transition his position as the first ranked in the Politburo’s standing committee, the small group of men, currently nine, that constitute the inner sanctum of the Party’s–and China’s–power.

Xi has outflanked Li Keqiang, the only other post-49er to make it to the Politburo’s standing committee, where he ranks seventh out of nine, one place below Xi, and who was Hu’s protege until Hu bowed to political realities and switched his support to Xi. Li, like Hu rose through the Party’s other leading faction, the Communist Youth League (YCL) whose power base is the party’s grassroots. Princelings dismissively refer to the leaders who come up through the YCL as “sons of shopkeepers.”

Xi rise from provincial official to national leader has been rapid. Cunning, calculating and ambitious Xi plays politics like a chameleon playing poker. He has worked in the countryside and in cities, north and south, in villages and in big cities, giving him a broad network of connections. He is a student of Marxism but not known to be ideological. Though never in the army, he has strong links with the armed forces. His father, General Xi Zhongxun, was a founding father of Mao’s revolution and his wife, Peng Liyuan, is both a celebrity folk singer and a major general in the PLA. He has a reputation for being pro-business (his father was purged by Mao for promoting economic opening and became one of Deng Xiaoping’s key mentors and lieutenants in instituting economic reform, particularly the early experiments in Guangdong and Shenzhen) but he is also famous for being ‘clean’, having cleared up corruption in Fujian in the 1990s and Shanghai in the 2000s, and is disdainful of China’s nouveau riche. He is calm and cautious, and above all seen as a team player–while all the while skillfully climbing a ladder of political patrons.

Though scarcely charismatic, Xi will be a more imposing figure on the world stage than his predecessors (though Hu set a low bar). Physically, he is tall and stocky so photo shoots with other world leaders will play well at home. With a sister in Canada, a brother in Taiwan and a daughter at Harvard in the U.S., to which he has been a visitor since the 1970s, he knows more about the world than the world knows about this plain- if rarely outspoken man who plays his political cards close to his chest–or about what he and his fellow new leaders want to do once they reach the apex of power they have scrabbled so hard to ascend.

As already noted, they will take over half way through the current five-year plan, so their initial path is set. But the next Politburo’s composition (all of its nine members save for Xi and Li are expected to retire in 2012) will also reflect the balance of power between those who believe that maintaining economic growth is necessary to legitimize the Party’s right to monopoly rule, in short the economic reformers, and those who think that legitimacy should be based on ideology, a group for whom the current Maoist nostalgia stands proxy. Many other currents–political, nationalistic, regional and demographic–cut across that divide. Even the princelings are not a monolithic bloc. Factional alliances exist among those who want to develop a more harmonious form of capitalism with a strong safety net, a narrowing of the wealth gap and more environmental protections; those harderliner economic reformers who want to diminish the power of the public sector and open up political reforms to embrace a new propertied class; and the so-called neo-comms, who want to asset China’s global power through cultural diplomacy, military strength and taking a greater role in international institutions.

Who gets promoted from the Politburo to its standing committee, and how they rank, will reveal to some extent how those divides lie and thus how China develops over the next decisive decade. But all are united in preserving the Party’s grip on power.

Footnote: State media have published the transcript of written answers Xi gave to questions from the Washington Post on the eve of his visit to the U.S. His comments on Sino-American relations were mostly pro-forma, including a note of warning sounded to the U.S. over its military stance in the Pacific.

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Chinese Lessons For North Korea’s New Leadership Generation

One way to look at the leadership transition in North Korea, and the prospects it holds, is to put a Chinese generational template over it. China’s new leadership that will be taking over from next year comprise the fifth generation since Mao’s revolutionaries. In North Korea, Kim Jong Un represents only the third generation of leaders, and, because of his young age, its vanguard, perhaps even only the forward scout of the vanguard.

It is the second generation–Kim Jong Il’s generation–that rules North Korea. The Dear Leader was only 69 0r 70 when he died, so there is still wind in his contempories’ sails. They are what any Chinese would recognize as princelings, the privileged offspring of the original revolutionary leaders–and overwhelmingly the sons in North Korea’s case. Like their Chinese counterparts, while they will have factional interests, they have a much greater vested interest in maintaining the status quo on which their position, power and privilege depend. Any interest in economic or political reform is subordinate to that.

The second generation of North Korean leaders bear some similarities to China’s third generation of leaders in that they were all Soviet or Soviet bloc educated, but unlike China’s third generation, and their own fathers, they neither fought against the Japanese in the 1940s nor against the Americans and South Koreans in the early 1950s. Nonetheless the military holds greater sway over the civilian elite than it did in China. The National Defence Commission governs the country and the industrial-military complex is pretty much the economy.

Like celebrities who are famous for being famous, North Korea’s second generation ruling elite is primarily interested in maintaining its position as the ruling elite. The third generation that Kim Jong Un’s succession may usher in is an unknown quantity. Many of its members have been schooled in some part in Western Europe and the U.S. (Like Kim Jong Un they study abroad under assumed names and pass themselves off as the children of embassy staff.) Whether that gives them a different world view to their predecessors and whether, if it does, the elite Kim Il Sung University to which they return snuffs it out, is anybody’s guess.

They are too young–with one obvious exception–to have risen to positions of power in the military or the Workers Party of Korea yet. They may be the best long-term bet for changing the focus in North Korea from the poverty of socialist self-sufficiency to economic reform along Chinese lines, but this Bystander, at least, wouldn’t bet the bank on them to do more than ensure their own positions are secure. That may be the bargain that Beijing will have to strike to nudge its neighbor towards the economic development that China, and most everybody else, sees necessary for regional stability.

Nor, as far as we know, is there a North Korean equivalent of Deng Xiaoping waiting to make a political comeback and launch economic reform. When the Dear Leader  purged, like his father before him, he purged for the generations.

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The Battle Behind The Birthday For A Billion

China's top leaders mark the 90th anniversary of the Communist Party of China in Beijing, July 1, 2011.

China’s Communist Party is celebrating the 90th anniversary of its founding on July 1, 1921 with even more pomp and pageantry than it exhibited two years ago on the 60th anniversary of its coming to power in 1949. But behind the “birthday party for a billion” (though the Party has only 80 million members) is its most important leadership transition in the three decades since Deng Xioaping set the party and country on the road of economic reform.

China’s next top leaders will, for the first time, be men born after the Party seized power in 1949. With their ascendancy from next year, modern China will cross a political and demographic Rubicon. Their generation is the great, great grandchild of Mao’s first generation of leaders. Their youth occurred during the Cultural Revolution, when many of their families were purged, but they embraced the Party nevertheless, and many advanced through its ranks by being “redder than red”. They are more worldly than their predecessors, mostly educated at top Chinese universities, more likely than their predecessors to have social science rather than engineering degrees, and be more likely to send their own children to top U.S. and European universities. Their working political life has only known China transforming itself as a rising political and economic power, yet they are as pragmatically committed as their predecessors to the Party’s monopoly on power, if divided over whether the basis for that should be ideological or economic.

The distinction matters. China is at a critical stage of its economic development. It has, self-evidently, developed at great pace through the initial phases of industrialization and urbanization over the past 30 years. Now it must kick on and leap the great wall that has stopped other developing nations completing the transformation to a developed economy.

When per capita income reaches $10,000-12,000 a year (in 2007 dollars), developing economies tend to stop developing without institutional change. China’s annual per capital income is $4,000. At current growth rates that gives it less than a decade–the watch of the new leadership–before it hits the wall. It will need to make deep structural reforms, both economic and political, if it is going to be able to vault it. Regardless of the fact that even if it does clear the wall, China will still be a middle-income country–absolute size of the economy is irrelevant in this respect, even if China passes the U.S. to become the world’s largest economy–no country has yet managed to be both developed and a single-party state.

That sets up a dilemma. If the Party’s legitimacy to monopolistic rule depends on continuing to deliver the economic growth that keeps its citizens getting richer and the country stronger and if China’s rapid economic growth cannot continue beyond a certain point without institutional reform, then managing the role of government in the economy and overcoming state-owned vested interests–in other words reforming itself–becomes the new leadership’s most important concern.

If, on the other hand, the Party’s legitimacy to monopolistic rule rests on an ideology of the mandate of Mao, it will still need to forge a statist economy that can deliver the economic development to ensure social stability and regional clout, and be unable to escape the fact that economic growth cannot continue beyond a certain point without institutional reform to support its move up the arc of development and prevent the ossifying of incumbent interests. So, again, managing the role of government in the economy and arbitrating between state-owned vested interests becomes the new leadership’s most important concern.

China is not only self-evidently non-Western, but it has a self-consciously distinct history, culture and political system, so it could develop a distinct economic system. Chinese exceptionalism is not anymore unreasonable than American exceptionalism. But in that event, the Party will still have to operate and against a back-drop of a globally connected economy in a world that is already wary of China’s perceived mercantilism and rising power and status. Though unlikely, that could make China turn inward and neo-isolationist, relying on its growing internal market and a demographic bias to becoming a deficit country over the next decade, to drive the next stage in its economic development.

For now, there is every indication that China will continue on its present course. Indeed, there is a plan for that. The new leadership will come into position midway though the current five-year plan. Yet what looks from the outside to be a seamless transfer of power from one generation of leadership to the next belies the factional infighting that occurs out of public view.

So far, it is the princelings, the descendants of Mao’s original revolutionary leaders, an elite collective dynasty of some 400 families who hold extensive sway over the Party, army and the economy, that are coming out on top. One of their own, Xi Jinping (second from the right in the picture above), born 1953, is emerging as Hu Jintao’s successor as paramount leader, successively taking over from Hu the positions of Party general secretary in 2012, president in 2013 and chairman of the Central Military Commission in 2014. By then the top Party, state and military jobs will again be united in one man, if Xi successfully consolidates over the course of the two-year transition his position as the first ranked in the Politburo’s standing committee, the small group of men, currently nine, that constitute the inner sanctum of the Party’s–and China’s–power.

Xi has outflanked Li Keqiang (second from left in the picture above), the only other post-49er to make it to the Politburo’s standing committee, where he ranks seventh out of nine, one place below Xi, and who was Hu’s protege until Hu bowed to political realities and switched his support to Xi. Li, like Hu rose through the Party’s other leading faction, the Communist Youth League (YCL) whose power base is the party’s grassroots. Princelings dismissively refer to the leaders who come up through the YCL as “sons of shopkeepers.”

Xi rise from provincial official to national leader has been rapid. Cunning, calculating and ambitious Xi plays politics like a chameleon playing poker. He has worked in the countryside and in cities, north and south, in villages and in big cities, giving him a broad network of connections. He is a student of Marxism but not known to be ideological. Though never in the army, he has strong links with the armed forces. His father, General Xi Zhongxun, was a founding father of Mao’s revolution and his wife, Peng Liyuan, is both a celebrity folk singer and a major general in the PLA. He has a reputation for being pro-business (his father was purged by Mao for promoting economic opening and became one of Deng Xiaoping’s key mentors and lieutenants in instituting economic reform, particularly the early experiments in Guangdong and Shenzhen) but he is also famous for being ‘clean’, having cleared up corruption in Fujian in the 1990s and Shanghai in the 2000s, and is disdainful of China’s nouveau riche. He is calm, cautious, and above all seen as a “team player”–while all the while skillfully climbing a ladder of political patrons.

Though scarcely charismatic, Xi will be a more imposing figure on the world stage than his predecessors (though Hu set a low bar). Physically, he is tall and stocky so photo shoots with other world leaders will play well at home. With a sister in Canada, a brother in Taiwan and a daughter at Harvard in the U.S., to which he has been a visitor since the 1970s, he knows more about the world than the world knows about this plain- if rarely outspoken man who plays his political cards close to his chest–or about what he and his fellow new leaders want to do once they reach the apex of power they have scrabbled so hard to ascend.

As already noted, they will take over half way through the current five-year plan, so their initial path is set. But the next Politburo’s composition (all of its nine members save for Xi and Li are expected to retire in 2012) will also reflect the balance of power between those who believe that maintaining economic growth is necessary to legitimize the Party’s right to monopoly rule, in short the economic reformers, and those who think that legitimacy should be based on ideology, a group for whom the current Maoist nostalgia stands proxy.  Many other currents–political, nationalistic, regional and demographic–cut across that divide. Even the princelings are not a monolithic bloc. Factional alliances exist among those who want to develop a more harmonious form of capitalism with a strong safety net, a narrowing of the wealth gap and more environmental protections; those harderliner economic reformers who want to diminish the power of the public sector and open up political reforms to embrace a new propertied class; and the so-called neo-comms, who want to asset China’s global power through cultural diplomacy, military strength and taking a greater role in international institutions.

Who gets promoted from the Politburo to its standing committee, and how they rank, will reveal to some extent how those divides lie and thus how China develops over the next decisive decade. But all are united in preserving the Party’s grip on power.

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