Xi’s ‘China Dream’ Comes to Coal Country

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Xi’s ‘China Dream’ Comes to Coal Country

Frustration with corrupt and inept local authorities in Shanxi fuels support for Xi Jinping’s push to be core leader.

Xi’s ‘China Dream’ Comes to Coal Country

The construction site of a residential compound is reflected on the glass facades of a office building in Taiyuan, Shanxi province (January 15, 2013).

Credit: Reuters

“It was a real boom. My father became very rich, very fast,” says 26-year-old Cheng Li. “But it did not take long before the phone started ringing, and it wouldn’t stop.”

It is with no apparent emotion, as if speaking of something perfectly obvious, that Cheng – son of a coal-mine owner in China’s Shanxi Province – recalls how his father came under pressure and threats from corrupt officials.

At the other end of the phone were unscrupulous Chinese state and party officials, both local and regional, trying to pocket their share of his father’s luck.

“Some asked him for cars, other asked him to pay for their child’s tuition fee abroad in exchange for delivering a document or stamping a permit,” explains Cheng. “For the bigger things, he had to directly pay money or even buy them a brand new apartment.”

Chengs testimony would make headlines anywhere, but in his home province of north China’s Shanxi province, such stories are so common they became unremarkable – almost boring.

400 km west of Beijing, the backwater province of Shanxi has unexpectedly become a strategic battlefield for Chinese President Xi Jinping’s two major campaigns – the transformation of China’s heavy industry-based economic growth model and his anti-corruption drive in the ranks of the Communist Party of China (CPC).

On the frontlines, fighting Xi’s war, are the Shanxi people – whose deep frustration with corrupt and inept local elites gave rise to a hunger for a savior figure who could bring deep, swift and decisive change.

“We need change. Shanxi needs change. And change in China only comes through a central leader, strong enough to take on the corrupt officials at our level, and actually do something for the people,” explains Cheng. “That’s the only thing that matters now.”

Rocky Road

With a population of 36 million people and home to China’s largest coal industry (25 percent of the country’s annual coal production), Shanxi province was deeply affected by the recent economic slow-down and efforts of Beijing to cut overproduction – which were likened by Prime Minister Li Keqiang to “taking a knife to one’s own flesh.”

Coal was and remains the critical energy resource fueling China’s development, accounting for around 70 percent of energy production and consumption in the country. Ensuring cheap coal supply through artificially induced low prices was always a fundamental ingredient of the Chinese recipe for development.

In its effort to modernize, the central government gradually lifted price controls on coal and began implementing market-based reform in the 1990s. In 1999, with the exception of thermal coal, the black gold was fully liberalized. This led to the boom which made Cheng’s family – and many other small coal producers in Shanxi province – so rich, so fast.

But this period of euphoria could not last forever. While small-scale coal mines were always an important source of the precious minerals (with a combined output of 600 million metric tons by the late 1990s), they were also unsafe, inefficient, and extremely polluting for Shanxi’s air and water.

For Beijing, the only way to solve the problem was to force the consolidation of the fragmented industry. The 2008 financial crisis, and the subsequent coming to power of President Xi Jinping and his plan for a “supply-side economic reform” gave momentum to the idea that having fewer and stronger coal mining companies was preferable to multiple small, family-owned companies. The dramatic fall in coal prices over 2012 and 2013 gave Beijing an opportunity to act. Soon, state-owned mining companies were swallowing small mines all over the country.

This is how Cheng Li’s family business came to an end. Too small to strive under new regulations, his family’s mine was quickly integrated by a bigger firm.

“That was the thing to do. Of course I sympathize with my father and grandfather; their whole life was intertwined with coal, and overnight, everything was lost. But considering the water and air pollution, it was not sustainable in the long term,” says Cheng. “The good years of coal are behind us, now we must force the region to transform.”

The “Left-Behind” Province

On the ground in Shanxi, the perspective of an economic transformation – from a resource-based extractive economy to tourism-oriented development – breeds hope, but also grievances.

There is a deeply-entrenched feeling among local people that Beijing has been “plundering” local coal resources for years to enrich large coastal cities, while keeping the province from reaping the benefits of its own resources.

In 2014, this frustration expressed itself in a fiery article which had strong echoes among Shanxi Internet-users. Written by Li Lin, a professor at Taiyuan University of Technology, the article bears an eloquent title: “China must apologize to Shanxi.”

The scathing rant depicts a terrible picture of the province’s development since the establishment of the People’s Republic of China in 1949. The central thesis of the author is that the people of Shanxi have not received their fair share of China’s economic miracle. Beijing’s price-control policy forced Shanxi to sell its precious black gold under market prices, thus denying the province billions in revenue over the years.

“If Shanxi is poor, is it the fault of Shanxi people?” asks Li. “No, if Shanxi is backward and poor, it is because the industrious and kind-hearted people of Shanxi have been constantly forced to pay, pay, and then pay again.”

For the author, Shanxi is truly a “left-behind” province, stuck between the coastal regions of east China – which have most benefited from China’s economic growth since 1979 – and sparsely-populated west China, which enjoy a myriad of advantageous policies to deal with their economic and social problems.

The article’s popularity indicates quite a few Shanxi people tend to agree with the author.

“We are a major electricity-producing region, so how come we are still experiencing power interruptions? Why can Beijing enjoy 24-hour electricity thanks to our coal plants, but we can’t? In what world is this fair?” says Zhang Yanhua, an economics Ph.D. student at Taiyuan University in Shanxi.

Zhang adds that young students in Shanxi face significant difficulties in their access to higher education, but cannot benefit from preferable policies such as lower standards for university entrance exams, as is the case, for example, in west China.

“There is a feeling among many students that we face severe difficulties, but that no help is coming for us,” says Zhang. “This is really a matter of fairness.”

Old Guard’s Fading Fortunes

More than a major battlefront for economic transformation, Shanxi is also the epicenter of Xi’s anti-corruption campaign.

Since Xi’s rise to power in 2012, the province has had more leaders arrested or jailed than anywhere else in China. Underlining the seriousness of Shanxi’s problem, Deputy Prime Minister Ma Kai compared corruption in Shanxi to a cancer. After 15,450 local officials were punished in 2014 alone, local authorities announced the province was facing a shortage of officials to close large vacancies left by the anti-corruption campaign.

Among those whose fall was the most brutal – and unexpected – is Ling Jihua, former President Hu Jintao’s secretary and previously vice chairman of Shanxi province’s top political advisory body. Ling was convicted of taking $11.57 million in bribes and sentenced to life in prison.

Ling was not the only high level official to fall. As of October 2016, seven provincial-level government officials and dozens of middle-level party cadres from Shanxi have been detained in corruption investigations.

More disturbing is the fact that Ling was accused by state media to have “formed a separate political faction” – referred to as the “Xishan Society.” According to rumors, Ling was the head of this secret group composed of prominent politicians and businessmen from Shanxi. Whether the Xishan Society really exists or not remains an object of speculations – but in a political system where networks and patronage are everything, such highly loaded accusations are not thrown lightly.

“I think it is clear that everyone who reached a certain level has been involved more or less in bad things, including corruption. This is how you go up, by buying your way to the top,” says Gao Ruimin, a 37-year-old police inspector from Datong City. “The only thing that matters now for me is – can they actually do something for us, for the people?”

Hungry for Real Change

While Shanxi’s old guard was falling out of favor with Beijing, other local officials – whose resolution to bring about change contrasts with the overall apathy of their peers – were rising.

Among them is Geng Yanbo. This party officer came into the spotlight when he took over as mayor of Datong City, north Shanxi, in 2008. Geng then decided to use the region’s glorious past as the capital of the Northern Wei Dynasty to “transform” the struggling coal-based economy into a tourism-driven industry. Specifically, this meant destroying and rebuilding part of the city center and displacing 500,000 people – which gave Geng his nickname, “Geng Chai-Chai” or “Demolition Geng.”

In his obsession for economic transformation, Geng is an objective ally of Xi Jinping. And much like Xi, Geng is a controversial figure, accused of authoritarianism by his opponents while enjoying popularity in China rarely seen among political leaders. In 2013, he was promoted at the head of Taiyuan City, the provincial capital.

“When he got promoted to Taiyuan, people were out in the streets asking him to stay with us. I have seen men kneeling down to him, begging him to stay,” recalls Gao, the Datong police inspector.

Geng is the subject of the documentary The Chinese Mayor, which offers a rare glimpse at his strict leadership style, his high standards for himself and for his subordinates, but (more interestingly) his frustration with the political system. In one scene, Geng complains of the limitations put on him by China’s CPC Central Committee.

“All our problems are rooted in the political system. What I’m doing is impossible under this system. I’m making it possible,” he says in the film. “The Party committee controls everything. I’m just the mayor. The government cannot give orders to the other branch of the system.”

In this sense, there is a striking similarity between Geng and Xi. Both seem to consider that an authoritarian concentration of power in the hands of a “savior figure” is the only way to bring about real change in China.

The new title that was bestowed upon Xi during the sixth plenum of the 18th Central Committee of the CPC in October is another sign of this trend. Xi will now be known as the “core of the Party,” making him not just the first among equals, but the clear leader of his generation.

This move carries with it a clear message for both local and provincial officials. Now with more power than ever, Xi will be able to stand up to “political cliques,” “conspiracies,” and “nepotism” at the provincial level.

For Cheng Li, whose own father was both a victim and a beneficiary of this corruption-ridden system, this new development is more than welcome, it is long awaited.

“I think that now, with Xi Jinping at the top, and with people like Geng Yanbo here, the people see that there is hope of change and of a better future,” he says. “In the past, there was nothing.”

François Dubé is a Journalist at ChinAfrica Magazine, based in Beijing, China.