China’s Economic Reckoning
The Price of Failed Reforms
What is Xi Jinping afraid of? For several years leading up to this year’s 19th Party Congress in Beijing, his government has been tightening the screws on lawyers, academics, civil society activists, and public intellectuals. It has been intensifying control over media while heightening propaganda about the brilliance of Xi’s leadership and demanding ever more intense loyalty from party members and bureaucrats. Its anti-corruption campaign has continued to weed out high-level officials who demonstrate insufficient personal loyalty to Xi.
The most striking recent case was the fall, in September, of Sun Zhengcai, a Politburo member and Communist Party secretary of the southwestern megacity of Chongqing. Like all purged high officials, Sun was denounced for corruption, sexual license, and other crimes—charges to which virtually every one of his colleagues is vulnerable—but his likely real crime was failing to put enough effort into promoting Xi’s popularity in Chongqing, where Xi’s former rival, Bo Xilai, is said to remain more popular than Xi, even five years after a spectacular fall from power. Sun has been replaced as that city’s party secretary by the most fervent of Xi loyalists, Chen Min’er, whose primary task will be eliminating Bo’s legacy from Chongqing.
At the party congress, Xi packed the Central Committee and its two higher organs, the Politburo and the Politburo Standing Committee, with loyal followers. Fifteen of 25 Politburo members have histories with Xi dating back to his early service in Fujian and Zhejiang provinces (or even, in one case, to his days as a “sent-down youth” in Shaanxi during the Cultural Revolution). The other ten include technocrats, a token woman, and the standard two military officers, who owe their promotions to Xi—no one represented a meaningful political challenge. And not one of the seven members of the standing committee is qualified by rank and age to succeed Xi, signaling that he intends to serve more than the usual two five-year terms as general secretary. The inclusion of a new guiding ideology in the party constitution, called Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, suggests that even if Xi were to eventually step down, he still intends to dominate.
Xi’s report to the congress—a three-and-a-half-hour recitation of slogan after slogan, with no explanation of what any of them meant—boasted that party and government officials would be promoted based on performance. But it defined performance as “following the leadership of the core [that is, Xi], keeping in alignment with the central Party leadership [Xi],” and “upholding the authority of the Central Committee [Xi].” Xi has redefined meritocracy as “followocracy.” In subgroup meetings during the congress, officials vied to reach new heights of ardor in praising Xi’s leadership.
Why this intense concentration of power and emphasis on obedience? Xi claimed that China is on the brink of achieving its great dream of national rejuvenation. But many of the moves that have been taken as signs of his strength are as much evidence of his anxiety. As Xi himself put it in his congress address, “The prospects are bright but the challenges are severe.”
THE MOST DANGEROUS DECADES
The first challenge is the resistance to China’s rise that Beijing anticipates from Washington. Chinese strategists widely adhere to the realist thinking associated with John Mearsheimer and Graham Allison, which holds that a dominant power can be expected to resist the emergence of a peer competitor. Ten years ago, when he was still heir apparent and not yet general secretary, Xi articulated the theory of a “new kind of major power relations,” with the hope of persuading U.S. policy-makers to accommodate what China described as its “core interests.” But under President Barack Obama and Secretary of State Hillary Clinton, Washington instead pursued the “pivot to Asia,” involving such policies as the negotiation of a Trans-Pacific Partnership (TPP) trade deal, revitalization of military alliances in the region, and cultivation of defense cooperation with Asian partners who were not formal U.S. allies. To China’s leaders, such policies represented an attempt to undercut Chinese power and perpetuate U.S. dominance.
The advent of Donald Trump has brought relief from American pressure. Trump has withdrawn from the TPP, shaken allies’ confidence in U.S. defense guarantees, and played a supporting role in building up the Xi cult. But as latter-day Marxists, the Chinese leaders think that structural interests are more important than personalities. Sooner or later, somehow or other, Trump or no Trump, the United States will try to stop China’s rise. In their eyes, the coming final decades of the drive toward national greatness (Xi’s target date is 2049) are especially dangerous. Even now, what the Chinese see as Washington’s mismanagement of the North Korean situation—hyping a crisis and threatening war instead of de-escalating and negotiating—is taken by some Chinese analysts as a devious American ploy. Tension on the Korean peninsula, the thinking goes, is meant to force China to give up the North Korean buffer against U.S. power and to goad U.S. allies in Asia to upgrade their armaments and perhaps even acquire nuclear weapons.
With such fears in mind, Xi reiterated in his party congress speech the need to “carry out major country diplomacy with Chinese characteristics, [a diplomacy that] aims to foster a new type of international relations and build a community with a shared future for mankind.” In other words, keep trying to get Washington to accede peacefully to China’s rise for as long as possible.
MORE LAWS, MORE THIEVES
The other challenge to Xi’s regime is internal. As he put it in his report to the congress, “What we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life.” He was referring to the revolution of rising expectations—for cleaner air, more affordable housing, safer products, and better public services—on the part of China’s growing middle class and aspirant working and farming classes. This revolution comes amid slowing economic growth and an urgent need for difficult reforms to deleverage local government and bank debt, invigorate state-owned enterprises, and remake China’s energy economy.
Many societies undergo internal stress and strain without the governing regime collapsing. (American society today is a good example, with seemingly everyone fuming over the state of politics and the economy.) But in China, even a peep of discontent is considered an existential threat to the ruling party. This was illustrated a few weeks ago when the government quickly clamped down on expressions of public outrage about an alleged child abuse scandal at a Beijing kindergarten. It is necessary to suppress unscripted public expressions of anger before they spread because, as Xi reminded the congress, “The defining feature of socialism with Chinese characteristics is the leadership of the Communist Party of China.”
The Taoist classic Tao Te Ching advises, “The more laws and commands there are, the more thieves and robbers there will be.” By insisting on a monopoly of power, the Chinese Communist Party has made every independent voice an existential threat. And yet its self-defined purpose for existence is to create a modern society, and in such a society, independent voices continuously emerge. The more the regime succeeds, the more repressive it must become. Xi’s ongoing rule—whether it lasts five more years, ten, or even longer—will test what people have started to label as “the China model,” which hinges on the belief that advanced modernization is compatible with repressive authoritarian government.