Now The Hard Part Begins: The China Challenge

Now The Hard Part Begins: The China Challenge

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Relativity is the key concept in measuring the success of China’s power transition.  By this standard, one has to grudgingly congratulate the Chinese Communist Party for producing its first-ever, nominally at least, complete transfer of power from one top leader to another last week.  The outgoing party chief, Hu Jintao, retired from both his party post and his position as the commander-in-chief, allowing Xi Jinping, now China’s new leader, to claim full authority in one stroke.  Had Hu followed the precedent set by his predecessors, Deng Xiaoping and Jiang Zemin, and decided to stay on for two extra years as the chairman of the party’s central military affairs committee, this would have been a semi-failed transition.

The good news does not stop there.  As expected, the Politburo Standing Committee, the party’s most powerful decision-making body, has been downsized from nine to seven, thus making it easier for Xi to build a coalition in a body often paralyzed by decision-making through consensus.

Perhaps the best news for Xi is that the bar for his success has been set relatively low by the departing administration’s failure to pursue real reforms during the preceding decade.  So even minor initiatives to tackle some of China’s social and economic problems should make Xi look good by comparison.

Judging by his first, albeit brief, public speech, Xi certainly did not disappoint.  His remarks at the ceremony unveiling the new standing committee on November 15 were direct and notable for the lack of tired official slogans and rhetoric.  His confident demeanor strengthened his public image as well.

Unfortunately, that is where the good news ends.  Compared with Hu’s rise to the top a decade ago, Xi certainly has gained more power.  But it is worth pointing out that he will face enormous constraints, at least in the short term, in gaining decisive influence at the top level of the Chinese power hierarchy.

The most immediate obstacle to any prospects of major policy shifts lies at the very top.  The new standing committee has a strong conservative presence.  The perception of the new team is that it is dominated by relatively mediocre  and risk-averse leaders.  Xi may not find many allies who would support an agenda of bold reforms, assuming that Xi has such an agenda in mind (something we honestly do not know).  The line-up of the new committee confirms that the selection was based partly on seniority (all the two-term Politburo members under 68 were promoted), but mainly on the need to maintain a balance of power among various factions and interests.   Such considerations have produced a team that lacks reform credentials or shared policy preferences.  It would be too optimistic or premature to believe that such a delicately balanced body could address China’s problems quickly and decisively.

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Andrew K P Leung
November 22, 2012 at 13:04

Professor Minxin Pei puts his finger on the most pressing challenges facing China's new President.

It is true that President Xi now pas much more power compared with out-going President Hu. A seldom-mentioned fact is that the so-called Jiang (Zemin) Office in Zhongnanhai, the nerve centre of Beijing's leadership, is now going to be abolished, probably as a deal for Hu to set an example for clean and complete transfer of power from one leadership to the next. This should augur well for the future stability of the Party.

This doesn't alter the fact that the Party remains a collective leadership albeit with a stronger President. However, even if a number of conservative-leaning old timers are now in the top leadership, they have to retire in five years time because of age. Some of the reforms are critical to the stability of the entire Party that even they may have a personal interest in supporting them.

See my Op-ed article "Old guard can still reform China" in the South China Morning Post.

http://www.andrewleunginternationalconsultants.com/files/old-guard-can-still-reform-china-alternatively-titled-up-to-the-task—scmp-14.11.2012.pdf

Amongst the most urgent reforms needed is how to rid the Party of its rampant corruption. Both out-going President Hu and in-coming President Xi have put this on top of the reform agenda. The term "life or death" of the Party and the nation was used.

It remains to be seen whether the Party is able to mandate open declaration of assets of officials and their families, and mount a vigorous and credible campaign to fight corruption at its roots. Promotion of public monitoring of officials (capitalizing on the ever-more vibrant social media) is on the cards. Holding officials to account, regardless of seniority, would be top of the priorities of new graft-buster Wang Qishan (currently China's "economic czar"). How to make the judiciary more independent, for example, by having all provincial judges appointed by Beijing instead of by local party secretaries, would no doubt help. Nevertheless, with a vast network of vested interests linked all the way to some people at the top, the prognosis is by no means rosy, at least not for the next five years.

As for democracy, I have explained many times that good governance holding officials to account to the people, rather than indiscriminate adoption of a Western model of rival multi-party politics, may be more suited to China's circumstances. Nevertheless, some progress is being to further deepen "intra-Party democracy". During the 18th Party Congress, for the first time in the history of the Party, a "differential voting" system of "selection" of party leaders for the highest level of leadership, the Politburo Standing Committee, was adopted. As can be expected, internal party politics (in which Jiang played a dominant role) eventually resulted in two pro-reform candidates being "voted out". But the adoption of such a system is in itself a welcome sign.

http://blogs.nottingham.ac.uk/chinapolicyinstitute/2012/11/01/an-election-for-the-politburo-standing-committee/
As for the One Child Policy, indeed its abolition is critical to China's tackling her fast aging demographics and the problems posed by the so-called Middle Income Trap. However, even if this Policy were scrapped right now, it would take decades rather years to have an impact on China's demographics. In any case, with world resources at a stretch, the long term solution for China is not by having more births but by embracing a low-carbon future.

See an analysis here of China's Middle Income Trap
http://www.andrewleunginternationalconsultants.com/chinawatch/2011/09/chinas-middle-income-trap.html

As for the South China Sea, rising Japanese right-wing politics, rising nationalism, and the redoubling of America's Pivot to Asia are making things very difficult for all sides. The Asian order is being tested in a shifting world of geopolitics.

http://www.andrewleunginternationalconsultants.com/files/op-ed-in-scmp—discord-in-asia—6-september-2012.pdf

However, in the interest of avoiding unpredictable and uncontrollable consequences of military escalations into a full-blow regional war or worse, it is nevertheless imperative for various stakeholders to exercise restraint and perhaps agree on a code of conduct at sea, without compromising territorial claims on all sides, leaving the latter to be settled by negotiations, bilaterally or multilaterally.

Best regards,

Andrew
www.andrewleunginternationalconsultants.com

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