Why China Can’t Pick Good Leaders

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Why China Can’t Pick Good Leaders

China’s next generation of leaders are expected to be chosen later this year. But factional strength and patronage may well trump talent.

As China’s top leaders get ready for their summer retreat in Beidaihe, the exclusive beach resort  225 kilometers north of Beijing, the rest of the world remains in the dark about the jockeying for power inside the world’s largest ruling party. By convention, the appointments for the party’s top positions are usually finalized when Chinese leaders escape the oppressive summer heat, pollution, and humidity engulfing Beijing to swim and relax toward the end of July in Beidaihe, known for its cool weather and clean air.

The ugly purge of Bo Xilai may have removed a lethal threat to leadership unity at the top for the moment, but that hasn’t ended the fierce competition for the most senior and desirable positions or reduced the uncertainty over the impact of leadership change on China’s domestic and foreign policies. Compared with previous leadership transitions, the impending shift is perhaps among the most significant in terms of scope and timing.

Of the nine members of the Politburo Standing Committee (PSC), seven will retire. There will be seven new faces if the party decides to maintain the PSC’s current size. Should the party reduce the size of the PSC to seven, a move that may streamline decision-making, five new members will be chosen at the next party congress scheduled for the autumn. While analysts have focused most of their attention on the leading contenders for the PSC, the party’s most powerful decision-making body, it’s worth noting that the 25-member Politburo itself will have at least 15 fresh faces. Of these, two or three new members under the age of 52 will likely be strong contenders for the party’s top two positions in five years. In other words, this transition will select not just the next generation of leaders, but also identify the promising candidates to succeed Xi Jinping and Li Keqiang, respectively the incoming general secretary of the Communist Party and the premier of the State Council.

In terms of timing, the transition is taking place at a critical juncture of the party’s rule.  Economically, the much-hyped “China Model” is seen as exhausted. Economic growth is slowing, due to slumping exports and weak final domestic demand. Huge risks in the financial system are piling up. The real estate sector is on the brink of a spectacular bust. Most sensible people, including those inside the government, have realized that growth driven by investment and export can no longer continue. Difficult structural reforms await the next leadership.

Politically, the Bo affair has revealed the deep rift within the ruling elites over the distribution of power and protection of their private interests. Elite unity, the glue holding together the regime, has shown signs of fraying. Chinese citizens increasingly want to have a say in how the country is governed. Despite the party’s costly censorship system, the spread of the information revolution, particularly Weibo, the Chinese version of the Twitter, is challenging the authority of the party.  Dissidents have become more defiant, as the example of Chen Guangcheng’s daring escape from illegal house detention in late April shows. Calls for democracy and political reform, long suppressed by the party, have resurfaced in the Chinese media.   These are the warning signs that the post-1989 political paradigm, which combines selective repression with promises of ever-rising standards of living, is about to unravel.

So the question is whether the new leaders are up to these challenges?

In the eyes of most Western elites, businessmen and politicians alike, Chinese leaders are practically synonymous with “smart, capable, dynamic, decisive, and forward looking.” Many of them are impressed, usually after relatively brief meetings, by the perceived sophistication, intelligence, and leadership skills of Chinese officials.

The truth is, of course, quite different.  Compared with their revolutionary predecessors, the current generation of leaders is obviously better educated, younger, culturally more sophisticated. But does the current system in China actually promote the most capable leaders to the top? Can such leaders actually govern effectively once installed?

Evidence based on academic research and press reports in China suggest that personal patronage and factional strength, not demonstrated achievements, are far more important in the selection of top leaders than objective factors such as record of administration. For example, Victor Shih of the University of California in San Diego and his collaborators combed through extensive personnel data and local economic growth rates to find whether promotion of officials in China actually depends on their demonstrated ability to deliver economic growth.  Their conclusion is that political patronage (specifically ties with powerful leaders), not growth rates, determines promotion.

This finding equally applies to the selection of top leaders. With a small number of exceptions, most candidates slated for top positions in the PSC and the Politburo don’t have records that inspire confidence and admiration. Other than the most strict and objective limit – their age – the only factor that influences their chances of being elevated to the top is whether they have powerful backers.

Political patronage at the top in the leadership transition process can only produce a fragile coalition, cobbled together through bargaining and horse-trading. Key appointments are made not based on individual competence or proven record, but on personal loyalty and considerations of how such appointments help balance the distribution of power among factions. Under such circumstances, mismatch of skill sets and policy portfolios is the norm, not the exception.

But the most damaging effect of this Byzantine system of leadership selection is that it inevitably results in a collective leadership prone to factional compromise, even policy paralysis. The fact that China has failed to undertake much-needed economic reforms to rebalance the economy in the previous decade must be attributed to such a fundamentally flawed system of picking leaders.

To be fair to the Communist Party, such political pathology is not unique to China. All autocratic regimes without strongman rule pick leaders through oligarchic bargaining, with predictable outcomes: these regimes ossify and ultimately fall from power.

It’s doubtful whether Chinese leaders are willing to do anything to change the current system, even though they must be aware of its fatal flaws. So the Beidaihe summer conclave will produce plenty of suspense and drama, but not the right leaders for steering China in a different direction.