No Change At The Top

THE QUINQUENNIAL CONGRESS of the Chinese Communist Party has, by recent convention, set the course of the Party’s future leadership. The 19th, just concluded, is no exception. The future leadership of the Party is for the foreseeable future, general secretary Xi Jinping.

Two signs of Xi’s sway are, first, that his ‘Thought’ has been written into the Party’s constitution by name. That not only elevates him to the level of Mao Zedong but makes any challenge to his authority a challenge to the Party as a whole. Second, he has been able to avoid installing a Politburo Standing Committee — the seven men (and it is all men, as seen above) at the apex of Chinese affairs — that contains any obvious successor.

That may be his most important achievement of all at the Congress. It avoids him being seen as a lame duck during the second of his two five-year terms as president, and leaves him the most flexibility in putting in place whatever arrangements he wishes for when that five years are up.

His options then are:

• to hand over the presidency to a loyalist who would perform the role as a ceremonial head of state (like a queen in a constitutional monarchy) while he exercises executive power from a post such as Party general secretary or head of the military commission (as Jiang Zemin did);
• to ensure that a hand-picked successor takes over the presidency and general secretary positions while he exercises control for behind the scenes as ‘core leader’ (as Deng Xiaoping did as ‘paramount leader’). That successor would be promoted from the Politburo without the customary five-year preparation period of being on the standing committee, though, as that is meant to be a time for the successor to establish his authority, that would not be needed as the authority would stay with Xi anyway;
• or he could baldly amend the national constitution to allow himself to continue as President for a third term.

In the meantime, Xi will embark on his second term with a Politburo standing committee that contains some allies but no fierce opponents, and all of an age at which they can have no expectation of taking the top job before they retire.

Five of the seven members of the previous standing committee have retired, leaving Xi and prime minister Li Keqiang as the only two carryovers. Among the newcomers, the two most important factions within the Party, Jiang’s Shanghai faction and the Communist Youth League of Xi’s predecessor Hu Jintao, have got places at that highest of high tables, notably Han Zheng for the Shanghai group and Wang Yang for the Youth League, which can also count Li. But both factions have been considerably weakened by Xi’s anti-corruption-cum-political-purge campaign.

To say that Xi has established his own faction may be over egging the pudding. If he is at the centre of one it is the amorphous group known as princelings, which has many cross-overs with other groupings.

However, jockeying for power is part of the warp and weft of China’s elite politics. Xi now has two firm allies. One is his former chief of staff and long-standing associate, Li Zhanshu, who will head the rubberstamp parliament, the National People’s Congress, in which role he would be critical if Xi did want to amend the natonal constitution to permit a third term as president. The other is the former head of the Party’s Organisation Department, Zhao Leji, who will head the Central Discipline Inspection Commission in succession to Wang Qishan, who led the anti-corruption operations that were instrumental in consolidating Xi’s power.

Yet, apart from supporting Xi, the overriding characteristics of the new standing committee, however, is experience and competence. These are people who know how to run a large operations as well as operate at the highest levels of the Party.

Xi also knows the importance of snuffing out factional struggles. In Hu’s last term, Xi and Hu spared over how quickly the outgoing president would successively yield his Party, state and military offices as he attempted to cement his legacy and power behind the throne.

Below the standing committee, the 25-member Politburo is broadly pro-Xi. The same can be said for the 200-member Central Committee beneath them.

Perhaps most critically, Xi loyalists now control all the key provinces and provincial-level municipalities that matter — Beijing, Shanghai, Guangdong, Chongqing and Tianjin, for example, and those where the could be unrest, notably Xinjiang. The mountains may be high and the emperor far away, as the old proverb has it, but Xi has his loyalists in place to ensure there is no repeat of city bosses like the disgraced Bo Xilai and his recently purged successor Sun Zhengcai getting uppity.

Our man in Davos sent word of how he remembered seeing a somewhat hesitant Xi being unveiled to the world at a World Economic Forum meeting a decade or so back and contrasted that with the assured, commanding figure that was seen at the 19th Party Congress. This Bystander also remembers some words penned here about Xi back in 2012 just ahead of the 18th Party Congress that would bring him to power:

Cunning, calculating and ambitious Xi plays politics like a chameleon playing poker.

He has played a winning hand, and still holds most of the aces.

Xi Sets Out What He Is Thinking

MAO TRANSFORMED CHINA. Deng Xiaoping transformed China.

Xi Jinping?

Xi has placed his marker at the 19th Party Congress — ‘socialism with Chinese characteristics for a new era’. Significantly, state media are starting to report it appended to his name: ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’. Xi’s formal induction into the pantheon of Party ideology alongside Mao Zedong Thought and Deng Xiaoping Theory cannot be far behind.

Xi Jinping Thought comprises 14 bullets points that, in short, reiterate that the Party leads everything. However, the sense of marking an epoch is as palpable as it is deliberate.

Xi portrays his China as one that will have become a global leader with international influence, a modern economy, advanced culture and world-class armed forces.

This future will come in two 15-year phases, 2020-2035 and 2035-2050.

The first phase will focus on turning fast growth into high-quality development, the deliverance of a ‘moderately prosperous society’. The second will turn China, by then likely the world’s largest economy, into Beautiful China, some nirvana-like flowering of a great modern socialist country-cum-superpower, and to do so, conveniently, in time for the 2049 centenary of the revolution that brought Mao and the Party to power. (Poverty is to be eradicated by the centenary of the Party’s founding, 2021.)

The first phase involves moving ahead with the rebalancing of the economy towards consumption-led growth that has been haltingly underway for some time. The financial system will become more market-based, and state-owned enterprises will be turned into world-class, globally competitive firm. China will become more open to foreign investors. Rule by law will be enhanced. Greater environmental protections introduced. The modernization of the PLA will be completed by 2035, giving China a world-class military, for which read on par with or better than the United States’.

Diplomatically, China will pursue global development in partnership with other countries, though it will create an alternative (and Beijing-led) global order architecture to be the framework for that. Alongside that, it will seek to strengthen its cultural soft power. Meanwhile, internally the anti-corruption campaign will continue to ensure the Party does not rot from the inside. And loyalty to the party and central leadership group must be absolute.

If this sounds like a political laundry list drawn up by a committee that is because, at heart, it is. Nor does it contain any new initiatives. Though delivered by Xi as his ‘work report’ and bearing his indelible stamp, the three and a half hour speech and its underlying text is the result of a year of consensus building involving thousands of officials.

Its purpose is to show the Party’s rank and file the signposts to the long-term actions expected from them by the leadership in all policy areas. That leadership, though, is now firmly Xi’s. The next question is how long he will feel he needs to exercise it.

Xi Jinping: Two Eyes To The Future

Xi Jinping

THE CRITICAL 19th Party Congress is due to get underway on October 18. A three-day preparatory meeting of the Party’s top leadership wrapped up today in Beijing.

It is commonly held that President Xi Jinping will emerge from the forthcoming Party congress with an even greater grip on power.  That may well be true; Xi will certainly be reappointed to the Party’s top post, general secretary, and might well be able to prevent Politburo Standing Committee promotions that indicate a designated successor in five years time — suggesting that Xi might stay beyond the now customary two terms.

An extension for Prime Minister Li Keqiang is less likely, with Hu Chunhua, Party boss in Guangdong (a post Xi’s father once held), being lined up to succeed him.

However, Xi’s enhanced power will not be as absolute as the personality cult building up around him might suggest. He will still have to horse trade with nodes of power and influence within the Party that have been diminished but not extinguished by his anti-corruption campaign.

The outcome of those compromises will offer a measure of the willingness of China’s elite to accept another five years of Xi’s tightening and highly personalised political control.

Little of that horse trading will be on public view at the Party Congress. Instead, there will be much play given to the ‘great rejuvenation of the Chinese nation’ and the ‘Chinese dream’, two somewhat ill-defined distillations of Xi’s “four identifications” that he believes all Chinese should make (with the motherland, the Chinese race, Chinese culture and the Chinese socialist road).

Part of that, also likely to be prominently presented is China-centric alternatives to the US-dominated Western international order, if not couched in quite such confrontational terms. Ambitious attempts to redraw the global geostrategic map, such as Xi’s pet ‘One Belt One Road’ project, will be presented not in terms of Chinese assertiveness and expansionism on the global stage but ‘win-win’ partnership and cooperation. China will also be presented as the rational counterpoint to US President Donald Trump that the world needs now, with Xi himself as its embodiment.

Meanwhile, much of the backroom dealing will already have been done.

Xi’s goals are twofold. First, he will wish to drive forward his self-appointed mission of reinventing both party and country so that the Party retains its monopolistic grip on power, which history suggests is at risk as China becomes richer.

Five years ago, managed economic reform was at the forefront of Xi’s agenda, but has been thwarted by vested interests, which have had to be systematically removed, mostly through the anti-corruption purge. Economic reform needs to be restarted, and before the country’s debt problem causes political problems. He still does not have the control over the economy that he does over the state security apparatus, military and, increasingly, the Party.

Second, he will want to put in place people who can carry forward that mission if and when he is gone, and to make sure they do not suffer the purges that Xi has used to decimate his rivals.

We use the verb deliberately. Roughly one in ten officials have been warned, put on probation, demoted or expelled from the Party since the crackdown started. According to Central Commission for Discipline Inspection figures published earlier this month, 1.34 million township-level and 648,000 Party members and officials in rural areas have been punished in the five years of the campaign, as well as more than 70,000 officials at or above the county-head level. More than 35,000 officials have been prosecuted.

That is a lot of ‘flies’, but several ‘tigers’ were tamed, too, including Sun Zhengcai, a Politburo member seen as a potential successor to Xi, and Wu Aiying, 65,  justice minister from 2005 until this February past and one of only a handful of senior female officials in China. The flies represent, as this Bystander noted before Xi ascended to power, how he is driven by a sense of a loss of the Party’s traditional moral values of honesty, dignity and self-respect; the tigers reveal his political ruthlessness.

This crackdown consolidated Xi’s control but also broke the implicit post-Mao pact that effectively banned large-scale purges within the elite. Xi’s followers no longer have that self-preservation guarantee, either. Xi needs to gather more power to himself now to protect them, and thus his legacy, in the future.

There are risks. The anti-corruption campaign has had a chilling effect on officialdom and morale is low. The security apparatus and military can be kept onside through expanded missions, new toys and reorganisations that elevate Xi loyalists. But the civil administration is a different matter.

Xi will need China’s massive administrative apparatus to implement his economic reforms. Their disciplined enthusiasm for doing so will be critical, especially as they will no longer be able to skim off their piece of economic progress. The anti-corruption campaign appears to have eased back on the Communist Youth League, the faction that draws heavily from cadres and government officials.

Xi’s leadership is likely to be more openly challenged within ruling circles should the economy run into serious problems, perhaps as a result of the debt crisis being mishandled or from an external shock, such as a trade war with the United States, although the state security apparatus would likely prevent either from triggering social unrest. Similarly, failures connected with his signature international projects, notably One Belt One Road, could undermine him domestically.

Settling China’s Future Behind Closed Doors

Weighty decisions were made at the Party plenum just concluded. The most important won’t see the light of day for some time; such was the secretiveness of the four-day meeting in Beijing of the 200 top officials who comprise the Party’s Central Committee  along with their 165 alternates. That doesn’t diminish their importance as China crosses a political and demographic Rubicon.

There was no substantive mention in the post-plenum communique of the leadership succession that will formally get underway with the Party Congress due to open on November 8th, though much of the plenum would have been spent on preparing for it. Last-minute bids for position and promotion would have been pressed, particularly among the supporting actors of those who will be elevated to the inner sanctum of the ruling elite, the Politburo’s standing committee.

The communique did mention the far from unexpected ratifications of the expulsion from Party membership of former Chongqing party boss Bo Xilai and former railways minister Liu Zhijun. Both will now face a criminal trial. What must have been a key point of discussion at the plenum, though there was no mention of it in the communique, is the charges Bo will face. With what point on the spectrum from corruption to coup does the top leadership feel politically secure? The answer is a measure of how strong the factional opposition to the Hu-Wen to Xi-Li transition remains from the neo-Maoists for whom Bo was a figurehead.

Another point of discussion, we surmise, will have been the top leadership’s response to  the recent The New York Times report about the alleged wealth built up by Prime Minister Wen Jiabao’s family, and one a couple of months previously by Bloomberg about president assumptive Xi Jinping’s. Both articles are thought to have been fed by information from Bo’s supporters, in the hope of generating popular outrage at the self-serving corruption of the top leadership. (This Bystander can only think that it is a sign of how far out of touch the neo-Maoists are if they think most Chinese would be shocked to learn there was corruption at the highest levels; Wen’s offer to make details of his personal wealth public, or at least open to Party officials, was rejected by his colleagues, we understand, because of the precedent it would set.) Word is that there is a similar attack on President Hu Jintao in the works, though that would be the equivalent of Bo’s supporters going nuclear at this late point.

One proxy for the continuing factional struggle would have been Hu’s work report to the plenum, which would have framed the official record of the Hu-Wen years, and Xi’s outline for the ones that will succeed them. The key question beyond whether the Hu-Wen political succession to Xi-Li is secure, will be the urgency with which continued economic reform and restructuring will be embraced. The clues from the communique, such as they are, is that it will be steady as she goes:

The meeting reached consensus that the Political Bureau has held high the great banner of socialism with Chinese characteristics and thoroughly implemented the spirits of the 17th Party Congress and its third, fourth, fifth and sixth plenums. The Political Bureau of the CPC Central Committee has been guided by Deng Xiaoping Theory and the important thought of Three Represents, and thoroughly carried out the Scientific Outlook on Development.

Steady as she goes would concern this Bystander. It suggests that the political will or ability to tackle some of the most entrenched vested interests blocking reform is not yet there. Yet the beatification of the Hu-Wen years as “the golden decade” is underway, even if a subsequent decade of necessary economic rebalancing is not assured.

One crumb to fall from the table was the appointment of  two new chairmen to the Central Military Commission, former PLA-Air Force commander Xu Qiliang and the head of the PLA’s Jinan military region (large parts of eastern China) Fan Changlong. The commission provides the Party’s political oversight of the military. The two appointments strike this Bystander as Hu tightening his control over the commission, whose chairmanship will be the last of the official positions that he will retire from.

The loyalty of the military–and the security services–to Hu is critical to smooth transition to the new generation of leaders, and his continuing influence over them. His predecessor Jiang Zemin, whose faction provides much of the support for the neo-Maoists, still casts his shadow of influence over both. Hu will be working to diminish that, just as Xi will be to working to establish his own independent of Hu’s.

The plenum also approved an amendment to the Party’s constitution. The communique doesn’t say what this is beyond it being connected to the Party’s theoretical underpinnings. Speculation has it that references to Mao Zedong Thought are going. Each generation of leaders since Mao has found it irresistible to add their theoretical two-cents to the constitution to back up their political agenda. Socialism with Chinese characteristics, Deng Xiaoping Theory, Jiang’s Three Represents and Hu’s scientific outlook on development have all been enshrined into the Party’s guiding ideology over the years.

Removing Mao Zedong Thought from the canon would be a highly symbolic as well as a political strike at the neo-Maoists. It would coincide with the ascendancy of first generation of top leaders born after Mao seized power in 1949. Their formative years were spent during the Cultural Revolution, but, as we have noted before, 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. They have been divided over whether the basis for that should be ideological or economic. This plenum and the Party Congress later this week should show how decisively they have fallen on the economic side of the divide.

Another Point Of Hu

Oxford Analytica offers a contrarian take on the recently concluded 17th party congress. It argues that the new line up of the politburo will limit President Hu Jintao’s power, rather than consolidate it. Not sure I agree in this case, but I like OxAn’s work, so this piece is worth the read. (Link is via Forbes magazine site; OxAn requires registration,)

Hu Rolls On

The party congress went much as scripted. The surprise would have been if it hadn’t.

President Hu Jintao got his “scientific concept of development” enshrined in the constitution, continuing the tradition of each leader adding his own embellishment to the country’s guiding principles. He also cleared the way for reshaping the party’s politburo standing committee — the nine people who really run China — by removing Vice-President Zeng Qinghong and two other senior politicians Luo Gan and Wu Guazheng from the party’s central committee, making them ineligible for reelection to the standing committee for further five year terms.

Zeng was both a princeling (offspring of a revolutionary veteran) and an old associate of Hu’s predecessor, Jiang Zemin. So was Wu, though he buttered his bread with the times, acting as the enforcer for both Jiang and Hu in the role of overseeing party discipline. He turns 70 next year.

Luo, who is 72, oversaw national security and was responsible for implementing the anti-crime campaign that has led to an increasing number of executions. He was a long-time ally of Jiang’s prime minister Li Peng.

Two vice premiers, Wu Yi and Zeng Peiyan, and defense minister Cao Gangchuan have also been put out to pasture.

This is being portrayed in western media as Hu tightening his hold on power, though after five years in office and the likely halfway point in his term, he already has a pretty firm grip. The clearing out of the Jiang old guard has been underway for some time.

Monday sees the secret ballot for the all-important politburo. Two names to look for are Shanghai party chief Xi Jinping and his counterpart in Liaoning, Li Keqiang. Both men, who are 54 years ofd and 52 years old respectively, are talked of as being successors to Hu when the 18th party congress meets in 2012.

None of this jockeying for power, though, is likely to make much difference to business. China’s economy will next week under the new leadership look much the same as it did last week under the old.