The Great Unequalizer
The Pandemic Is Compounding Disparities in Income, Wealth, and Opportunity
A soldier on a private beach reserved for government officials in the resort of Beidaihe. (Courtesy Reuters)
As the summer comes to an end, Chinese leaders are preparing for a once-in-a-decade turnover in leadership. But unlike past transitions, this time around, there are no revolutionary-credentialed party elders to mediate among the party's squabbling cliques. This means the jockeying for powerful positions in the new Politburo's lineup could be more combative, as rival kingpins push aggressively for their favorites. Coming off their annual summer provincial inspection tours, the chief powerbrokers of the Chinese Communist Party (CCP) will soon be setting off for their summer retreat at the seaside resort town of Beidaihe where the process will begin in earnest.
About 175 miles east of Beijing, Beidaihe is always more about backroom politics than determining policy. Since the time of Mao Zedong, the resort has served as a refuge where political bosses from around the country can come together quietly to build alliances, or, when necessary, go head to head away from the unyielding demands of unity in the public eye. The resort's informal setting, requiring leaders to leave the titles and trappings of Beijing behind, also creates a more level playing field for the wide cast of party magnates -- especially those who are officially retired but still wield substantial influence. As such, the setting rewards those most skilled at backstage political maneuvering, sometimes resulting in surprising realignments in the leadership's balance of power. In fact, President Hu Jintao, who was uncomfortable with the place because its opaque deal-making clashed with his emphasis on transparency and "inner-party democracy," tried to ban the gathering early in his tenure. But the allure of handshakes near the seashore is so ingrained in the CCP's political culture that his campaign went nowhere.
This year, the ostensible goal of the meeting is to achieve consensus on a new slate of top party leaders. But that agenda is complicated by the fact that the leadership is gathering in the shadow of the Bo Xilai scandal. The party formally dumped Bo from the Politburo in April, after he was tripped up by his own deceit, abuse of power, and unbridled ambition. Granted, the leadership took a big step last week by formally charging Bo's wife, Gu Kailai, with the murder of Neil Heywood, a British businessman who worked for the couple as a fixer. But Gu was always the low-hanging fruit, marked as the sacrificial lamb from the beginning, when the state media announced her as a formal suspect in the Heywood killing.
Yet, unlike in April, there was no simultaneous announcement concerning Bo, suggesting he remains adrift in the netherworld of the party's extrajudicial detention system. What is more, it remains unclear what will happen to Bo's erstwhile security chief, Wang Lijun, whose flight to a U.S. consulate in February touched off the whole scandal in the first place. The lack of synchronization suggests moving forward on Gu may be a holding action rather than the beginning of the final act. If so, the CCP's early hopes of wrapping up the entire Bo case, and all of its unbecoming implications, well ahead of the fall turnover have hit a snag.
In dragging its feet on resolving Bo's fate, the CCP has missed an opportunity to demonstrate, both at home and abroad, that the party's leadership is marching in lockstep into the transition. Its failure to make speedier progress is curious, as important interim steps could have been taken by now. A simple announcement, similar to that on Gu, that the party was handing Bo over to the state judicial authorities for formal prosecution would allay any lingering doubts among party insiders or foreign investors by sending an unambiguous signal that the leadership has at least agreed to an initial list of charges.
Instead, Hu and other top leaders have reportedly been messaging with internal edicts to argue that Bo's case be treated as a breach of law and party regulations rather than as an attempt to split the party. Trying to limit Bo's transgressions to the narrower allegation of violations of party discipline helps avoid destabilizing factional splits, but a flurry of recent reports suggesting that he has stopped cooperating with interrogators could make any resolution even more illusory.
The Bo saga is not playing out in a vacuum. As more time passes, the stakes are getting higher. For example, the CCP's leadership is now considering downsizing the Politburo Standing Committee, the regime's top decision-making body at the fall Party Congress, from nine seats to seven. Earlier this month, the front page of the overseas edition of the party's flagship newspaper, People's Daily, carried an unusual paean to the current configuration. But more recent stories appearing in Hong Kong and other unofficial overseas Chinese media suggest that there are also stakeholders building a coalition to scale back the committee to seven members, which, they argue, would streamline its deliberations. It is reasonable to believe that these conflicting reports are the result of targeted leaks designed to shape the deliberations at Beidaihe.
The debate turns on what danger the party elites fear most. First, there are worries about greater autocracy. The article praising the current setup noted that the nine-member Standing Committee represents all the regime's leading institutions, ensuring a "collective presidential system" that is stable, more democratic, and less subject to the whims of an individual leader. Advocates of shrinking the committee, however, argue that the current structure has promoted too many entrenched, vested interests at the top. They say concentrating power in fewer hands would promote greater efficiency by empowering the new team to tackle the party's most vexing challenges such as taking on official corruption and pressing ahead with economic and Chinese-style political reforms.
Even the discussion of shrinking the Standing Committee will make the jockeying for a spot more feverish, as key powerbrokers worry that their interests may not be fully protected if their candidates lose out. This, in turn, could make them less willing to accommodate their rivals as the pressure to demonstrate the strength of their political networks mounts. Of everyone, Hu is likely feeling the heat the most. As the departing leader, he must show that he can safeguard his interests heading into retirement, but only a few of his closest allies have all the right credentials, including membership on the current Politburo, to make an easy case for promotion to the Standing Committee.
With the leadership preoccupied, it is no surprise that policy confusion has become the order of the day, even on issues of substantial import. On the South China Sea, for example, Beijing's approach is drifting "from maintaining stability to safeguarding sovereignty," as the well-connected Chinese academic Jin Canrong recently argued in People's Daily. The last time the sea became a flashpoint, in 2009-10, the leadership stepped in to remind the country's hawks that defending sovereignty was important but ultimately subordinate to focusing on economic development. With politics now in command, it is unlikely that anyone will risk looking soft on defending China's "core interests" by calling for restraint.
Management of the economy, too, has appeared muddled. Beijing has repeatedly issued edicts in the last few weeks underscoring its resolve to keep real estate prices under control in the interest of social stability. During a recent provincial tour, Vice Premier Li Keqiang, the putative future steward of the economy as premier, separately reiterated the regime's commitment to rebalance the economy by promoting domestic demand. But local officials know that delivering high GDP growth in their regions, most often underwritten by land sales and property development, is a key criterion for promotion. Likewise, the party must weigh its desire to create a positive atmosphere for the Party Congress by boosting the economy against concerns that a return to an investment-led strategy in the second half of the year would further delay the rebalancing agenda.
Once the smoke clears from the handover of power, there is every reason to believe that the new team will tackle these issues in due course. The question for China -- and the world -- is whether the transition will get out of the shadow of the Bo scandal and beyond the debate over the size of the Standing Committee to come out strong enough to handle the challenges on the other side.