Now The Hard Part Begins: The China Challenge (Page 3 of 3)

On the economic front, however, Xi’s room for maneuver is smaller.  While he may continue to expand some promising experiments on financial liberalization, significant reforms that will hurt the state-owned enterprises, local governments, central bureaucracy and families of the elites are certain to encounter fierce opposition.  Xi may choose not to pick a fight he cannot expect to win easily.

Political reform – at least of the kind that will introduce more democracy and civil liberties – is extremely unlikely.   The risks for Xi are simply too high.  The two Politburo members perceived to be reformers – Li Yuanchao and Wang Yang – failed to make it into the standing committee mainly because they are seen as likely champions of political reform.   Xi is obviously aware of what happened to the two top leaders, Hu Yaobang and Zhao Ziyang, who advocated political reform during the 1980s (Both lost their jobs).

Compared with the constraints he faces on the domestic policy front, foreign policy actually may be an area over which Xi will gain control more quickly and decisively.  Given the urgency of the escalating Sino-Japanese tensions over the Senkaku/Diaoyu Islands, Xi will have to act fast to  avoid a foreign policy crisis.  Of course, Xi’s long-term foreign policy objective is stabilizing Beijing’s relations with Washington since the underlying competitive dynamics are driving the two countries further apart.  But this goal will be elusive unless and until he fixes Sino-Japanese ties.

Whether Xi can pull this off is anybody’s guess.  He will have to invest some political capital and take real risks in moderating China’s positions and stopping the now routine patrols of the waters close to the disputed islands (such patrols are designed to contest Japan’s sovereignty claims, but may trigger a tough response from Tokyo that leads to further escalations).  Japan’s political establishment will also have to cooperate by not taking actions that make it impossible for Xi to make symbolic concessions.

So the bottom line in evaluating China’s new leadership in general, and Xi in particular:  he and his colleagues will have to walk the walk. His predecessors have done enough talking already.

Comments
1
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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