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With Bo Xilai on Trial, China Adopts Chongqing Model

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China Power

With Bo Xilai on Trial, China Adopts Chongqing Model

While moving forward with his prosecution, Xi Jinping and Li Keqiang are adopting Bo’s playbook.

This week former Politburo member Bo Xilai will go on trial for charges of bribery, embezzlement and abuse of power, finally marking the culmination of Bo’s spectacular fall from power.

But even as they put Bo on trial, the top leadership in China is quietly adopting much of his governance style and policies—the so-called Chongqing Model. This model had both political and socioeconomic aspects to it, and President Xi Jinping currently appears to be leading the charge on the political side while Premier Li Keqiang embraces the social and economic components.

The political aspects of the Chongqing Model contained both Bo’s personal leadership style, handling of Party and state subordinates and ideological campaigns.

Bo’s personal leadership style was unusual for the CCP, in that he sought to establish a cult-like base of supporters among Chinese masses through his charm and carefully crafted public image. Holding a graduate degree in journalism, he was very savvy with the media, including being far more blunt and outspoken than is usual of Chinese officials. In short, Bo was a “rock star” among the sea of dull technocrats in the Party.

Since taking over as General Secretary last November, Xi has seemingly tried to emulate this leadership style. When the new Politburo Standing Committee was first unveiled at the 18th Party Congress, Xi took the unusual step of giving an off-the-cuff speech to the media and the nation. Soon after he took a very public tour through southern China in the same manner that Deng Xiaoping had done back in 1992. While traveling the country, the Chinese media were allowed to follow him closely and even post live updates on Weibo accounts. Another Weibo account that gained notoriety earlier in Xi’s tenure had so many details on his movements that many speculated it was actually run by his inner circle. Other stories and gestures—like rumors that he had taken a taxi ride and stayed outside in the rain without an umbrella—have been publicized to raise Xi’s popularity among the Chinese people.

Like Bo, Xi also presents himself as someone who could easily intermingle with the Chinese masses. He reduced extravagances while traveling in country, trips, often speaks to seemingly random and ordinary Chinese and even eats in the cafeteria with the grunts while visiting military bases. He has sought to project the same “rock star” type image as Bo while traveling abroad with his famous and fashionable wife, Peng Liyuan, herself prone to impromptu gestures like jumping on stage to join the band for a song during state dinners put on for her and her husband.

While building a rock star image around himself, Bo also launched huge anti-corruption and anti-crime campaigns and forced officials to adopt more austere lifestyles.  For example, when Bo became mayor of Dalin its officials were notorious for frequenting expensive restaurants and having taxpayers foot the bill. To end this practice, Bo reportedly gave out beepers to all top officials, which he used to call them at all hours of the night to ensure they were at home or at the office.

In Chongqing he initiated a “connecting with your poor relatives” campaign where government officials would spend times in poorer regions and sometimes adopt poor families.” Then, of course, there was his “smashing black” campaign that was directed against organized crime as well as the corrupt police, judges and officials who enriched themselves by working with them.

As President and General Secretary, Xi has also made rooting out corruption arguably his top priority. Complimenting this is Xi’s unending efforts to cut down on official extravagance. His mass line campaign calls for Party officials to reconnect with the Chinese masses. Similar to Bo’s “connecting with your poor relatives campaign,” Xi has ordered PLA and police officials to spend two weeks on the front lines with enlisted men.  

Most controversially, Bo launched a “singing red” campaign that explicitly sought to revamp some of the most peculiar elements of Mao’s rule. As the Wall Street Journal reported over the weekend, Xi too is adopting some elements of Maoism. However, there is a crucial difference between Bo and Xi’s reverence for Mao; namely, Bo’s singing red campaign was more about rallying the masses while Xi’s references to Maoist symbolism have mostly been in dealing with the Party and military. Both leaders have sought to centralize power in themselves to a degree that is uncommon in the post-Deng era.

Many of the socioeconomic components of Bo’s Chongqing Model are also being adopted by the Chinese leadership that is persecuting him. This effort is being spearheaded by Premier Li Keqiang.

During Bo’s time as Secretary of Chongqing, the municipality enjoyed astounding levels of growth. These growth rates were made all the more amazing by the fact that the period coincided with the 2008 financial crisis.

Much of the economic boom was driven by investment in infrastructure and copious amounts of Foreign Direct Investment, which Bo attracted to Chongqing through good infrastructure investment, subsidies for foreign businesses and low corporate tax rates. But the most notable aspect of the Chongqing growth model was Bo’s emphasis on social justice and greater equality, which are the parts of the model that Li and the Chinese leaders will find most attractive.   

For example, during Bo’s tenure State-Owned Enterprises (SOEs) in Chongqing paid the highest taxes in all of China, according to a recent analysis by Oxford Analytica, a global analysis and advisory firm that recently forecast that Chinese leaders would adopt some of Bo’s economic policies. With these SOE taxes and large amounts of borrowing, Bo invested voraciously in low income housing projects and extended urban Hokou status to rural migrant workers in Chongqing. Indeed, Bo used Hokou reform to drive urbanization by offering rural farmers the chance to trade their residential land rights for urban Hokou residency. As a result, Chongqing has converted 3.2 million people from rural to urban residents in recent years; more than three times that of Guangdong, Shanghai Chengdu combined!

Li’s economic plan has already tried to pursue many of these goals through similar means, and more are almost certainly on the way. One example is Li’s pet project, the Shanghai Integrated Free Trade Zone (SIFTZ), which seeks to attract greater investment by offering “world-class transport and communications facilities and a tax-free environment for domestic and foreign enterprises.”

Similarly, the new stealth stimulus that is quietly being implemented is largely going to social housing projects, slum renovation and transportation infrastructure. As J Capital Research’s Anne Stevenson-Yang explained to Forbes, the stealth stimulus “is a genuine acceleration in infrastructure spending and [there will be] many announcements about how the government will accelerate ‘slum renovation,’ water projects, and roads.”

Li has made it abundantly clear that urbanization will be a top priority under his administration. Although few concrete details on implementation have been unveiled so far, there is an understanding that accelerating urbanization will require reforming the Hokou system so that migrants in the city can obtain urban status. It is also understood that urbanization will require building massive amounts of low income housing because migrant workers and the urban poor cannot afford housing in the booming real estate markets in Chinese cities.

Even Bo’s eco-friendly polices— such as his tree-planting campaigns and efforts to move high-pollution factories out of the cities— is being adopted in tone if not substance by Li and the Party leadership.  

It’s by no means surprising that Li is looking to the Chongqing Model for his economic policies. After all, although Chongqing is the largest Chinese municipality in terms of population, it is also one of the most developed inland cities in the country. This is important because Li’s big push for urbanization will focus on developing second and third-tier cities mostly in the Chinese interior along the Yangtze River. Thus, Chongqing would be the most sensible place to look for policy ideas.

Yet there will have to be two crucial differences between Bo’s economic agenda in Chongqing and Li’s national one. First, as noted above, Chongqing enjoyed nearly unparalleled growth rates during Bo’s reign whereas China as a nation is going to have to accept lower growth rates than it has been enjoying. Growth also differ substantially between different localities, however, and if Xi’s political campaigns can keep the Party and PLA in line this should be manageable.

More challenging for Li is that Bo’s massive socioeconomic plan in Chongqing relied on heavy borrowing and investment, both of which China is trying to move away from. By targeting investment better, and in particular directing it at underdeveloped inland cities, Li might be able to get better returns on investments than his predecessors did near the end of their tenures. Continuing to take on more debt will prove more problematic and risky