Now The Hard Part Begins: The China Challenge

Posted on November 21, 2012

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Xi Jinping has taken the reins of the Communist Party. With multiple domestic and international challenges mounting, there is much to be done.

Xi Jinping at the Great Hall of the People in Beijing, where he has been confirmed as China’s new leader. Photograph: Feng Li/Getty Images

Relativity is the key concept in measuring the success of China’s power transition.  By this standard, one has to grudgingly congratulate the Chinese Communist Party for producing its first-ever, nominally at least, complete transfer of power from one top leader to another last week.  The outgoing party chief, Hu Jintao, retired from both his party post and his position as the commander-in-chief, allowing Xi Jinping, now China’s new leader, to claim full authority in one stroke.  Had Hu followed the precedent set by his predecessors, Deng Xiaoping and Jiang Zemin, and decided to stay on for two extra years as the chairman of the party’s central military affairs committee, this would have been a semi-failed transition.

The good news does not stop there.  As expected, the Politburo Standing Committee, the party’s most powerful decision-making body, has been downsized from nine to seven, thus making it easier for Xi to build a coalition in a body often paralyzed by decision-making through consensus.

Perhaps the best news for Xi is that the bar for his success has been set relatively low by the departing administration’s failure to pursue real reforms during the preceding decade.  So even minor initiatives to tackle some of China’s social and economic problems should make Xi look good by comparison.

Judging by his first, albeit brief, public speech, Xi certainly did not disappoint.  His remarks at the ceremony unveiling the new standing committee on November 15 were direct and notable for the lack of tired official slogans and rhetoric.  His confident demeanor strengthened his public image as well.

Unfortunately, that is where the good news ends.  Compared with Hu’s rise to the top a decade ago, Xi certainly has gained more power.  But it is worth pointing out that he will face enormous constraints, at least in the short term, in gaining decisive influence at the top level of the Chinese power hierarchy.

The most immediate obstacle to any prospects of major policy shifts lies at the very top.  The new standing committee has a strong conservative presence.  The perception of the new team is that it is dominated by relatively mediocre  and risk-averse leaders.  Xi may not find many allies who would support an agenda of bold reforms, assuming that Xi has such an agenda in mind (something we honestly do not know).  The line-up of the new committee confirms that the selection was based partly on seniority (all the two-term Politburo members under 68 were promoted), but mainly on the need to maintain a balance of power among various factions and interests.   Such considerations have produced a team that lacks reform credentials or shared policy preferences.  It would be too optimistic or premature to believe that such a delicately balanced body could address China’s problems quickly and decisively.

Xi must also be concerned with the influence of retired leaders, in particular, Jiang Zemin, 86, and Hu Jintao, 70. Jiang proved his enduring political clout by managing to put two to three of his loyalists on the committee.  Hu was less successful in appointing his supporters to the standing committee, but apparently got a good deal for “retiring naked” (quitting all positions).  Of the 15 new Politburo members, at least half are his protégés, including one 49-year-old rising star who will be well-positioned to contend for a spot on the standing committee in five years’ time.  If anything, Hu’s influence will remain considerable in the coming five years.

Because of these political constraints, Xi will have to balance the imperative for him to establish his image as a decisive and different leader with the political necessity of getting along with his colleagues on the standing committee and the retired leaders. The result of this delicate balancing act is likely a cautious start characterized by the adoption of relatively easy policy measures designed mainly to differentiate the new leadership from its immediate predecessor.

One such measure may be a thorough reform of the hukou system (household registration) that denies rural migrants full citizenship rights.   Allowing them to become full urban residents enjoying all the rights and benefits of city dwellers will be both socially just and economically beneficial.   In the past, opposition from large cities in coastal areas and the public security apparatus has blocked the reform.  But today, since more than 200 million migrants have settled in the cities already over the few decades, and improving their status can unleash enormous economic dynamism as well as create an instant constituency for Xi, it is highly likely that Xi will make this issue a top priority.

Another issue that may further enhance Xi’s political capital is the abolition of the much-hated one-child policy.  Political opposition to this reform is even weaker – one can think of only one interest group, the family-planning commission, that will try to block such a move.  Obviously, one important political consideration is that this bold move will effectively overturn a policy closely associated with Deng Xiaoping.  But on balance, Xi may conclude that this is a risk worth taking.

On the economic front, however, Xi’s room for maneuver is smaller.  While he may continue to expand some promising experiments on financial liberalization, significant reforms that will hurt the state-owned enterprises, local governments, central bureaucracy and families of the elites are certain to encounter fierce opposition.  Xi may choose not to pick a fight he cannot expect to win easily.

Political reform – at least of the kind that will introduce more democracy and civil liberties – is extremely unlikely.   The risks for Xi are simply too high.  The two Politburo members perceived to be reformers – Li Yuanchao and Wang Yang – failed to make it into the standing committee mainly because they are seen as likely champions of political reform.   Xi is obviously aware of what happened to the two top leaders, Hu Yaobang and Zhao Ziyang, who advocated political reform during the 1980s (Both lost their jobs).

Compared with the constraints he faces on the domestic policy front, foreign policy actually may be an area over which Xi will gain control more quickly and decisively.  Given the urgency of the escalating Sino-Japanese tensions over the Senkaku/Diaoyu Islands, Xi will have to act fast to  avoid a foreign policy crisis.  Of course, Xi’s long-term foreign policy objective is stabilizing Beijing’s relations with Washington since the underlying competitive dynamics are driving the two countries further apart.  But this goal will be elusive unless and until he fixes Sino-Japanese ties.

Whether Xi can pull this off is anybody’s guess.  He will have to invest some political capital and take real risks in moderating China’s positions and stopping the now routine patrols of the waters close to the disputed islands (such patrols are designed to contest Japan’s sovereignty claims, but may trigger a tough response from Tokyo that leads to further escalations).  Japan’s political establishment will also have to cooperate by not taking actions that make it impossible for Xi to make symbolic concessions.

So the bottom line in evaluating China’s new leadership in general, and Xi in particular:  he and his colleagues will have to walk the walk. His predecessors have done enough talking already.

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Minxin Pei

Can Xi Jinping bring about the change China needs?

When Xi Jinping, China’s new leader, appeared in public for the first time after being appointed on Thursday, the last major world power ruled by a Communist Party gained a new, human face, writes Jonathan Fenby.

In contrast to his predecessor, Hu Jintao, who always seemed to be reciting an officially approved text, the stocky, 59-year-old Xi seemed to speak with genuine personal feeling of what needs to be done in this nation of 1.3 billion people.

He talked of people’s desire for a better life, for better jobs, education and health care – and for less pollution. He flashed his chubby smile unlike the ever dour Hu. His slightly bearlike stance contrasted with the ramrod backs of the Communist Party elite standing with him on the stage in the cavernous Great Hall of the People in Beijing.

There was even an impromptu element in an unexplained hour’s delay in starting this final event of the week-long Communist Party Congress which has installed the country’s new leadership.

Some observers with long memories of the old Soviet Union compared it to the early appearance of Mikhail Gorbachev as he sought to move the USSR towards a more relaxed and responsible system. But any comparison with Gorbachev would be an anathema to Xi and his colleagues – Gorbachev is a dirty name in China as the man who relaxed the Party’s grip and brought disaster down upon it.

Therein lies the basic paradox as China moves into the Xi Jinping era.

On the one hand, its leaders acknowledge the major challenges facing them but, on the other, they are extremely reluctant to alter the power structure or the reliance of economic growth which have produced many of these problems. Meanwhile they indulge in backstairs politicking worthy of any Western party.

They fear that political reform would bring the whole edifice tumbling down, Gorbachev style. They stress Party unity above all, particularly since the drama surrounding the fall of the maverick politician, Bo Xilai, who crashed to earth this year accused of crimes, corruption and womanising after the mysterious death of the British businessman, Neil Heywood, in his southwestern fiefdom of Chongqing – but whose real sin was to have emerged as a challenger to the consensus machine that runs the People’s Republic.

The bureaucracy and powerful vested interests, especially in the huge state sector of the economy, oppose reform that could affect their privileged positions. Popular protests, running to some 150,000 a year, have been met by an expansion of spending on state security, now larger than the military budget. Media are tightly controlled and censors patrol the internet.

While individual liberties have greatly increased, anybody who tries to organise political opposition is likely to end up in jail, as in the case of the Nobel Peave Prize winner, Liu Xiabao who is serving 11 years for having organised a petition in favour of democracy. Xi may smile for the cameras but this remains an iron-fisted regime which has control in all forms at its heart.

Yet, outside the serried ranks of delegates in the Great Hall of the People, everyday life in Beijing and across China went on last week in a way that takes as little account as possible of the ruling autocracy. Rather than Communism or Confucianism, the “ism” that rules in today’s China is materialism. Having had a terrible 30 years under Mao, the Chinese have grasped the opportunities of market-led economic reform with both hands.

Their consumption has become a major force in driving the world economy.

They see life in down-to-earth terms of material betterment, epitomised by the young woman who said on a television dating show that she would “rather cry in the back of a BMW than laugh on the back of a bicycle”.

Economic growth has changed society radically. Social media runs rings round the censors. Corruption and poorly enforced safety standards, notably for food, has bred widespread cynicism and distrust.

When a magazine reporter asked primary schoolchildren what they wanted to be when they grew up, most said they dreamed to becoming rich business people, pop idols or sports stars. But one six-year-old replied that she wanted to be an official. “What kind of official?” the journalist asked. “A corrupt official because they have all the nice things,” came the reply.

One joke after the Congress appointed a senior figure to head an anti-graft campaign was that he had been chosen because he had no children who had profited from his position.

Until recently, foreign travel was a rarity but now 70 million Chinese travel abroad each year. Western hotel chains lay on Chinese breakfasts.

Smart London stores have cash machines from Chinese banks. Chinese visitors take the train from London to snap up bargains at the Bicester Village factory outlet centre and make the pilgrimage to the Somerset village of Street to visit the museum there dedicated to Clarks shoes, which are all the rage in the People’s Republic.

Fees from Chinese students boost university funding in Britain, Australia and the United States; Chinese leaders may extol the riches of their country’s culture and civilisation but they often send their children to study abroad – Xi Jinping’s daughter is at Harvard under a pseudonym and Bo Xilai’s son also studied there after having gone through Harrow School and Oxford.

The disjunction between the opaque, hermetically-sealed one-party system and this rapidly evolving society is the main challenge for the regime. For all his apparent normalness on Thursday, Xi’s steady rise through the ranks of the provincial bureaucracy to power at the centre as Communist General is symptomatic of how things actually work in China.

This is not the meritocracy which China boosters proclaim as being superior to messy Western democracy. You only move up the ladder in China if you belong to the Party, and that covers only 6 per cent of the population. How you rise certainly depends on your performance, but also on your contacts.

Xi is the son of a revolutionary general who was purged in the Cultural Revolution of 1966-76 – the young Xi was “sent down” to the countryside where he lived in a cave and looked after pigs. When his father was rehabilitated as Deng Xiaoping launched economic reform at the end of the 1970s, the son worked for a prominent general and then rose through administrative and Party posts in booming coastal provinces.

Friends from early days describe him as “supremely pragmatic and a realist” and also as “exceptionally ambitious”.

What was the key to his rise to the top? He is a man with whom the various interest groups on the Chinese totem pole feel comfortable, the consensus choice in a regime which has evolved from the wild adventurism of the Mao Tse-tung era into a management system that happens to be running a country of 1.3 billion people rather than a big company.

We know something of his personal life. He likes American war films because the good guys win. He exercises by swimming. His first marriage broke down and his second wife is a highly popular folk singer who is major-general in the army entertainment corps but who retreated from the limelight as her husband rose to the top.

She says she picked him for his “inner qualities”, describes him as frugal, hard working and down to earth and adds in perfect wifely fashion: “When he comes home. I’ve never thought of it as though there’s some leader in the house; in my eyes, he’s just my husband.”

Having followed a conventional route to the top within the Party bureaucracy, Xi is unlikely to go off message. Though he is now the top man in an autocratic system the dictatorship which rules China is that of the Communist Party and its state, not that of an individual – and the party state is a complex animal.

The jigsaw of powers encompasses the political machine, reaching down from the leadership compound beside the imperial Forbidden City in Beijing to every village in the land.

All companies of any size have a Communist cell which has to approve important decisions. The bosses of big state enterprises, who have on their desks a “red telephone” connecting them to Party officials, are as powerful as ministers. The Party runs its own Discipline Commission which can pick people up at will, and hold them for six months without charge in a secret location.

The national military force is called the People’s Liberation Army (PLA) but is, in fact, a tool of the Party – the chairman of its supervisory commission is the Communist General Secretary and powerful political commissars ensure it is kept in line.

But the power structure can no longer simply assert its will, as it did under Mao and in the massacre of protesters and ordinary citizens in Beijing on June 4, 1989, when the regime used the PLA against its own people around Tiananmen Square.

The Congress in Beijing, meeting within a stone’s throw of the scene of the killing of student protesters 23 years ago, claimed the Party to be the one true representative of the Chinese people but those people are no longer marching to the beat of a single Party drum – not to mention the dozens of Tibetan monks who have burned themselves to death this year to show their rejection of Chinese rule.

So Xi has a tricky task ahead of him at home while abroad he has to work out how to deal with Beijing’s scratchy relationship with Washington under the second Obama administration and, closer at home, is faced with an array of disputes with other East Asian states, including Japan, over conflicting claims to maritime sovereignty. Though China is anxious to project its power more strongly, particularly by building up its navy, the new leadership’s main concern is with the domestic situation. China’s growth inspires shock and awe leading some to see China ruling the world.

Never have so many people been pulled out of absolute poverty in such a short space of time than in the People’s Republic since Deng Xiaoping launched economic reform in 1978. Never has a relatively poor country has such an effect on the global economy or built up foreign exchange reserves of more than £2 trillion.

But behind that achievement lie the problems Xi pointed to on Thursday and many more he did not identify.

The economy, though still growing much faster than in the West, is slowing down and needs rebalancing towards consumption and away from infrastructure, property and exports – a tricky process when the population has grown accustomed to runaway expansion.

The country will not collapse as has been predicted by China bears for more than 10 years. Its unique system of bureaucratic capitalism and a command economy has staved off the bad consequences that orthodox economics has repeated forecast. But that has come at a big price for its citizens.

For them the power-broking at the Congress was irrelevant. Growing wealth, albeit very unevenly distributed, has spawned a new society which the regime is hard put to contain. Xi will need his popular touch in the years to come; his problem is that, as a child of the system, he is likely to be unwilling, and probably ill-equipped, to steer the country’s further evolution to the fairer, more relaxed society that would provide the safety valves to avoid the kind of upheavals which have marked so much of China’s turbulent history.

Xi Jinping: the ‘big personality’ taking charge in China

The man anointed as China’s new leader is a very different figure from his predecessor, Hu Jintao

Xi Jinping, who has been confirmed as the man who will lead China for the next decade, cuts a contrasting figure to his predecessor, Hu Jintao.

While Hu is determinedly anonymous, Xi is “a big personality”, according to those who have met him. Standing over 6ft tall, he is confident and affable. He boasts a ready smile and a glamorous second wife – the renowned People’s Liberation Army singer Peng Liyuan. He has expressed his fondness for US war movies and, perhaps more surprisingly, praised the edgy independent film-maker Jia Zhangke.

This is, in part, a generational and social shift. Xi is 59 and, like the other rising stars in Chinese politics, grew up in the era of reform and opening.

While Hu’s first visit to the US was in 2002, Xi and his peers have travelled frequently and several have personal links with the west. Xi’s daughter is studying at Harvard and a sister is thought to live in Canada. And like many of his peers, he is a “princeling” – someone who has experienced both privilege and prejudice as the child of a powerful Communist party figure.

Xi was born in 1953 to Xi Zhongxun, a Long March hero who later became a vice-premier, and Qi Xin. He grew up in the relative comfort of Zhongnanhai, the party elite’s red-walled Beijing compound.

Loneliness

But when he was only nine his father fell from grace with Mao Zedong. Six years later, as the cultural revolution wreaked havoc, young Xi was dispatched to the dusty, impoverished north-western province of Shaanxi to “learn from the masses”.

He spent seven years living in a cave home in Liangjiahe village. “I ate a lot more bitterness than most people,” he once told a Chinese magazine. He has described struggling with the fleas, the hard physical labour and the sheer loneliness.

There is, of course, a well-established Communist iconography of learning to serve the people. But political commentator Li Datong suggests this “double background” has proved genuinely formative for princelings such as Xi and might even lead them to bolder policy-making.

“One aspect is their family background as children of the country’s founders and the other is their experience of being sent to the countryside, which made them understand China’s real situation better. It gives this generation a strong tradition of idealism and the courage to do something big,” he said.

Although he has openly criticised the cultural revolution, Xi embraced the party; in a WikiLeaks cable an academic who knew Xi as a young man suggested he “chose to survive by becoming redder than red”.

Family links helped him to win a place studying chemical engineering at the elite Tsinghua University, followed by a post as aide to a powerful military leader, Geng Biao – the beginning of his useful People’s Liberation Army (PLA) connections.

Next came a more surprising move – his choice, says political expert Zhang Xiaojin – to an unglamorous post in Hebei province. He may have hoped to shake off suggestions of benefiting from his family name.

It was as deputy secretary of Zhengding county that he visited Muscatine, a US town of 23,000 until now best known for its melons and Mark Twain’s brief sojourn there in 1855.

“He was a very polite and kind guy. I could see someone very devoted to his work – there was no golfing on that trip, that’s for sure,” said Eleanor Dvorchak, who hosted Xi in her son’s old room, where he slept amid football wallpaper and Star Trek figurines. “He was serious. He was a man on a mission.”

Sarah Lande, who organised the trip, said his confidence was obvious even through a translator.

“You could tell he was in charge … he seemed relaxed and welcoming and able to handle things,” she said. “He had the words he wanted to express himself easily.”

The acquaintance who spoke to WikiLeaks claimed Xi always had his “eye on the prize” of a major party post. He transferred to southern Fujian province in 1985, climbing steadily upwards over 17 years. Most of his experience has been earned in China’s relatively prosperous, entrepreneurial coastal areas, where he courted investors and built up business, proving willing to adopt new ideas. The former US treasury secretary Hank Paulson called him “the kind of guy who knows how to get things over the goal line”.

After the toppling of Shanghai’s party secretary, Chen Liangyu, in a corruption scandal, Xi took charge of the city in 2007. Barely six months later his elevation to the politburo standing committee – the top political body – signalled that he was expected to succeed Hu. In October 2010 his appointment as vice-chair of the central military commission cemented his position.

He describes his own thinking as pragmatic, and throughout his rise he has cultivated a down-to-earth image; in the provinces he ate in government canteens and often dressed down.

In a burst of publicity shortly before his 2007 promotion his wife lauded his humble nature and devotion to duty, revealing that on their second date he warned her he would not have much time for family life. And in a system known for corruption, he also has a clean reputation. One friend told the LA Times the worst the paper was likely to find were overdue library books.

But while Xi is well-liked and adept at glad-handing, he appears to give little of importance away. Even his popular wife has retreated into the background as he has assumed increasing prominence.

The US ambassador, Gary Locke, recently observed that he was “very personable” but that US officials “really don’t know that much about him”.

Close association with particular policies or factions has its dangers. Becoming general secretary of the party, and thus leader of China, is “an issue of who opposes you rather than who supports you”, said Kerry Brown, head of the Asia programme at Chatham House.

Beyond his openness to economic reforms, Xi is known primarily as a figure who appeals to different groupings and as a safe pair of hands.

“In recent years he has taken care of large-scale events, including Olympics and anniversaries, and there haven’t been any big mistakes. Xi has steadily been through these tests,” said Zhang.

In 2007 he leapfrogged Li Keqiang – until then seen as likely to succeed Hu, but seen perhaps as too much Hu’s protege – as the consensus candidate in a system built on collective decision-making.

Xi’s networks are unusually broad, according to Brown: “Provincially; through his family; and with the military through Geng Biao. His elevation is in the interests of the widest group of people and opposed by the smallest group.” It is the same relatively small elite who will determine what he can do with the job.

Liberal

Some hope he shares his father’s liberal sympathies: Xi senior was not only a noted economic reformer, but an ally of reformist leader Hu Yaobang. Some say he criticised the military crackdown on Tiananmen Square’s pro-democracy protests in 1989.

They say that grassroots organisations burgeoned during the vice-president’s stint in Zhejiang, and there was progress in the election of independent candidates at local polls. But the Chinese Human Rights Defenders network has argued the province also saw “zealous persecution” of dissidents, underground Christians and activists: “His track record does not bode well,” it wrote. Other China watchers point to shattered hopes that Hu might prove politically liberal.

Nor does Xi’s confidence in overseas dealings necessarily indicate a more emollient approach to foreign relations. His most-quoted remark to date was made on a trip to Mexico in 2009: “There are some well fed foreigners who have nothing better to do than point fingers at our affairs. China does not, first, export revolution; second, export poverty and hunger; third, cause troubles for you. What else is there to say?”

In any case, to read Xi as a man in sole control of the agenda is to fundamentally misunderstand the Chinese political system. He will be “first among equals” in the nine-member standing committee, say analysts. Hu and other former leaders will still exert influence; and 2011’s five-year plan has plotted the immediate course.

The system “is in favour of moderation, and nothing can change quickly. Steady as it goes. The political rhythm first has to be installed … significant shifts will come later,” said Dr David Kelly, director of the Beijing-based political thinktank China Policy.

Some think Xi’s networks may allow him to strike out more confidently than Hu. Others think he will struggle to win support for bold decisions needed to tackle the country’s mounting challenges. “I think he’s a more instinctive and gut-driven politician and may surprise us. Others say the system and the vested interests around him are too strong,” said Brown.

His leadership will be shaped by his colleagues and framed by external forces. “What’s very important is the capacity to be on the right side of history,” said Cheng Li of the Brookings Institution in Washington. “He himself probably does not know what he will do.”

Pocket profile

Born: June 1953

Career: His father was a revolutionary hero and a steady rise through party ranks, aided by expert networking, is set to take Xi to the very top. His family background has dogged him at times but also speeded him on his course.

High point: Emerging as heir apparent to Hu Jintao at the 17th party congress in 2007. Many had expected Li Keqiang – now expected to become premier – to take the position.

Low point: Coming last in the vote for membership of the central committee in 1997, amid hostility to princelings. Connections won him a place as an alternate.

What he says: “Are you trying to give me a fright?” (when asked by a reporter, in 2002, whether he would be a top leader within the decade).

What they say: “He’s more assertive than Hu Jintao. When he enters the room, you know there is a significant presence here … [But] when they rise through their hierarchy, it serves no purpose to indicate differences or even alternative directions.” (Henry Kissinger)

Tania Branigan