In April, the Chinese authorities imposed a seven-year jail sentence on a 71-year-old female journalist named Gao Yu. Gao, who suffers from serious heart problems, had been arrested a year earlier for reportedly passing a copy of “Document No 9”—which forbids members of the Chinese Communist Party (CCP) and college professors from talking about “seven taboo areas,” including democracy, media freedom and judicial independence—to a New-York based Chinese-language publication. Well before her detention, however, copies of the document had been disseminated by newspapers and websites in Hong Kong, Taiwan and in the United States. That the regime of President Xi Jinping should feel it necessary to imprison an elderly journalist shows not only its ruthlessness, but also its paranoia about challenges to its authority, big and small.
Xi, who became General Secretary of the CCP in late 2012, and State President soon afterwards, is the most authoritarian Chinese leader since Mao Zedong, the revolutionary founding father of the People’s Republic of China (PRC). Mao’s determination to transform China radically from a country of farms and peasants to a world power in industry led to the Great Famine of 1958 to 1961, and later to the Cultural Revolution in which those deemed ideologically unreliable were persecuted in huge numbers.
Just over two years since Xi formally took power, his moves to consolidate state control have confounded all those who thought that, as the son of a renowned liberal, he would continue the steady liberalisation of the past 30 years. He was only 59 when he became President, relatively young for a Chinese leader; surely, many thought, his values would have been shaped too by China’s increasing openness to the world during his adult years?
But like Mao, he has made the preservation of the power of the Communist Party his overriding goal. His motive appears partly to be to counter the growing demands of the new, large middle class, created by China’s recent transformation. In doing so, however, Xi runs the risk of reversing many of the extraordinary advances that China has made since the reforms introduced in the late 1970s and early 1980s by Mao’s successor, Deng Xiaoping, the leader who opened up China to the rest of the world.
Xi is what the Chinese call a “princeling,” the offspring of a party elder. Princelings are widely thought to take unfair advantage of their connections, and for that reason are feared and loathed in equal measure. But Xi is more popular among ordinary Chinese than were his immediate predecessors, Jiang Zemin and Hu Jintao. He has a down-to-earth style and uses language that is direct and easy to understand. One of the best-known photographs of the President was taken when he visited the city of Wuhan, in central China, in 2013. It was raining heavily, but Xi not only carried his own umbrella, he also rolled up his trousers the way ordinary construction workers do.
His wife is popular, too. Peng Liyuan, a folk singer, has been a household name for the past two decades. A song written in praise of the couple, “Xi Dada loves Peng Mama,” recently went viral on the internet. The lyrics went like this: “Xi Dada loves Peng Mama,/Love like theirs is a fairy tale./Peng Mama loves Xi Dada,/A world with love is the most powerful…” The anti-corruption drive that he launched in 2013, shortly after taking power, has earned Xi a reputation as a “Mr Clean” not afraid to take on venal officials. Few government agencies have been left untouched, and a number of senior functionaries have already been charged with violations of “discipline.” He is also popular with young, nationalistic Chinese who are proud of their country’s increasing prominence on the world stage.
While the party has tightened control over the press and the internet, Xi’s PR team has used new media to project the avuncular persona of “Xi Dada” (roughly, “Uncle Xi”). The CCP’s propaganda department has set up various Xi fan-clubs on the Chinese equivalents of Facebook and Twitter. Its latest creation is a Xi Dada app, which has been dubbed by some a 21st- century, electronic Little Red Book (a reference to Mao’s collected writings and speeches). The app gives Xi’s followers up-to-the-minute reports of the leader’s whereabouts, as well as his latest pronouncements.
In his public statements, Xi has paid homage to Deng as the “Great Architect of Reform.” A month after he became CCP General Secretary at the 18th Party Congress in November 2012, Xi made a pilgrimage to Guangdong, the province next to Hong Kong where Deng launched his reform programme. “The decision made by Deng Xiaoping on the reform and open door policy is correct,” Xi said, “and we will continue to walk down this correct road.”
Yet it is equally clear that he imagines himself as a kind of 21st-century Mao, and is intent on reversing many of the reforms Deng undertook in the early 1980s.
He has begun by extending his control over the machinery of government, ripping up many of the reforms Deng made to prevent the return of a Mao-style “cult of personality.” Deng laid out the rationale for those reforms in an article in the People’s Daily in August 1980, when he argued that China should replace the “rule of personality” with the rule of law and institutions. “If systems [of governance] are sound,” Deng wrote, “they can place restraints on the actions of bad people; if they are unsound, they may hamper the efforts of good people or, in certain cases, may push them in the wrong direction.”
Deng insisted above all on the principle of collective leadership, whereby the party and country were run by the Politburo Standing Committee. Deng wanted the General Secretary—the leader of the party—to be first among equals in the Politburo. In the system he introduced, each Standing Committee member had a different portfolio. When votes were cast to settle controversial issues, each member carried equal weight. Deng also promoted the separation of party and government: the CCP leadership focused on long-term goals and planning, while the day-to-day running of the country was left to professional administrators and technocrats in the State Council (or Cabinet) and regional governments.
If Xi’s track record over the past two-and-a-half years is anything to go by, he rejects Deng’s political reforms wholesale. Traditionally, the General Secretary is responsible for foreign and military policy. Xi, however, has asserted his authority over other areas as well, including the internal security apparatus (which runs the police, the secret police and the quasi-military People’s Armed Police), internet security and the development of the IT industry.
He has also taken command of economic policy, where other Standing Committee members now play second fiddle to him. Most strikingly, he has marginalised Li Keqiang, Premier of the State Council (effectively the Prime Minister). Traditionally, the Premier has had the final say on economic policy and heads the Leading Group on Finance and Economics, the nation’s highest economic decision-making body. No longer; Xi now chairs that group, leaving Li to rubber-stamp economic policies devised by the General Secretary and his advisors.
“The fate of the CCP depends on whether it can defend the battlefield of ideology and thought.”Equally significantly, Xi has created three powerful new bodies at the apex of the party: the Central National Security Commission (CNSC), the Central Leading Group on Comprehensively Deepening Reforms (CLGCDR) and the Central Leading Group on Cyberspace Affairs (CLGCA). The CNSC is in charge of the quasi-police state apparatus; the CLGCDR is the highest decision-making organ on economic reform; and the CLGCA runs the nation’s cyber police and cyber warfare operations. And Xi is the head of all three. In internal party affairs, Xi has abandoned two more of Deng’s most cherished principles: the need to avoid factionalism and to give more clout to regional administrations. It is true that Xi’s predecessors, Jiang and Hu, also assembled personal factions, but he has gone much further. He has groomed cadres with “revolutionary bloodlines” for top jobs, in the process violating Deng’s instruction that the offspring of party elders should focus on business, not politics. Compared with Jiang and Hu, Xi has appointed more officials with central government experience to regional positions in an attempt to tighten the party’s grip on local administrations.
Xi’s handling of economic policy shows the same desire to assert the authority of the party. He believes in a model of “state capitalism” that combines centralised diktats with market-orientated policies. Although the non-state sector now accounts for around 60 per cent of China’s industrial production and provides 70 per cent of urban jobs, about 100 state-owned enterprises (SOEs) or conglomerates enjoy monopolies over key sectors, ranging from petroleum and steel to banking and transport. In 2010, the combined profits of just two state-owned conglomerates—China National Petroleum Corporation and China Mobile—were larger than those of the country’s 500 largest private firms combined. Sixty-five of the 70 Chinese firms that made the 2012 Fortune Global 500 list were giant SOEs. Xi wishes to cement the dominance of these companies.
A wide-ranging government statement on economic policy issued in 2013, which attracted intense interest in the west, declared that the authorities must “unwaveringly consolidate and develop the public economy, preserve the dominant position of public ownership, give full rein to the guiding function of the state-owned economy, [and] incessantly strengthen the vitality, control and influence of the state-owned economy.” It also specified that firms serving “national strategic objectives” would continue to enjoy monopoly status. More disturbing still is Xi’s insistence that economic strategies that could be construed as “subversive”—meaning detrimental to the CCP’s status as the country’s “perennial ruling party”—should be dropped. Deng used to say that “economic construction is the centre of the work of the party,” a repudiation of Mao’s belief that ideology trumps economics. Xi, however, has given equal billing to economics, on the one hand, and ideological rectitude on the other. As the ultra-conservative newspaper Beijing Daily put it: “The fate of the CCP depends on whether it can defend the battlefield of ideology and thought.”
In all these ways, Xi has successfully reined in Li Keqiang’s free-market inclinations. Li is not only the sole English-speaking member of the Politburo, but also its keenest advocate of market-based reforms. “We must further stimulate the creative powers of the market and of society,” he has said. “The market is the creator of social wealth. Let go of the powers that should be let go.” But Xi has decreed that the CCP must retain its authority over the “top-level design” of economic policy on matters ranging from production to distribution.
All these moves to increase control appear to reflect his fear that the CCP will go the way of the Soviet Communist Party (CPSU), which collapsed suddenly and irrevocably in 1991. During his visit to Guangdong in December 2012, Xi revealed in a speech to party officials his nightmares about the CCP losing its grip on the country. With Mao’s dictum that “power grows out of the barrel of a gun” in mind, Xi ascribed the demise of the CPSU to its failure to gain absolute control over the “gun” (the military) and the “knife” (the police and secret police). “When the [Soviet] party collapsed, the soldiers and the police stood idly by,” Xi said. “There was not a single citizen who was man enough to stand up and defend [the CPSU].”
Fears about China’s governability have tormented its leaders for much of its history. Even Mao acknowledged, in 1939, that the country’s sheer size had “disadvantages for the Chinese people’s revolution.” But the astonishing consequences of the reforms unleashed by Deng would put any leader now—regardless of his instincts—in a difficult predicament, as is much-analysed by commentators worldwide. A large and growing middle class is likely to demand more political power to match its economic clout. And while China now has the largest economy in the world on some measures (according to estimates by the International Monetary Fund, it is worth $17.6 trillion, compared to the US’s $17.4 trillion), its growth has slowed, because of the 2008 financial crisis, rising raw material costs, corruption, pollution and other problems. In 2014, China missed its growth target of 7.5 per cent—the growth achieved of 7.4 per cent was the weakest for 24 years.
Xi asserts that China can have it both ways; that “socialism with Chinese characteristics” is the key to ensuring that China’s “economic miracle” continues. But are his changes damaging economic growth? For a start, they appear bad news for foreign companies, a number of which have complained about the worsening climate in this market of 1.3bn people.
Since Xi became General Secretary in 2012, numerous multinationals—including car manufacturers and parts makers from Japan, Germany and the US—have been fined billions of yuan for alleged price fixing and overcharging of customers. The Chinese offshoots of Audi and Chrysler, for instance, paid penalties totalling $45.8m in late 2014. At the same time, 12 auto-parts makers from Japan were subjected to fines of $202m. Although China joined the World Trade Organisation in 2010, the Xi administration is placing new—and much harsher—restrictions on multinationals, in an apparent effort to protect indigenous industries. And this has gone beyond banning IT giants such as Google, Facebook and Twitter, which are seen as politically destabilising; the state now makes life difficult for foreign firms that refuse to share the latest technology with their Chinese counterparts.
On the other hand, since the financial crisis, Beijing has consistently made some shrewd decisions, which Xi has continued. It has used massive investment by central and local government in infrastructure and housing to maintain a relatively high growth rate (although this investment has been criticised by some for being excessive). The reliance on government stimulus to reach this year’s growth target was reaffirmed at a Politburo meeting in late April. The ruling council announced in a statement that “we must develop the critical role of investment in [boosting] the economy.” It also promised that more would be done to prop up the real-estate market, which is on the brink of a severe downturn. The Politburo also recommended a more vigorous monetary policy, despite strenuous efforts already made recently to pump up liquidity by lowering the interest rate by 0.25 per cent and cutting the banks’ reserve requirement ratio by 1 per cent.
This has been largely successful in shielding China from the impact of the 2008 crisis. But there are other problems, notably rising debt. A report earlier this year by McKinsey, the management consulting firm, indicated that China’s total social debt—mainly borne by state-owned enterprises and local government—had quadrupled from $7 trillion in 2007 to $28 trillion in mid-2014. The size of loans taken by the country’s ballooning “shadow banking” sector—comprising unregulated financial institutions—is estimated at close to $5 trillion. While McKinsey noted that the debt level of 2014—which was equivalent to 282 per cent of Gross Domestic Product—was “manageable” in the short term, a large-scale financial crisis could occur unless Beijing shifts to a model that places more emphasis on nurturing the entrepreneurial spirit of the private sector.
Many economists think a “hard landing” for the Chinese economy is unlikely in the near future. Economic output was $10.3 trillion in 2014 and consumer spending, previously a concern, has also risen. But the flaws in the model which has brought about dramatic transformation in barely a generation are becoming more obvious.
Ordinary Chinese have taken immense pride in the country’s economic success, and this has taken a buffeting as growth has slowed. The Xi government has worked hard in response to stoke patriotism and even jingoism. In a further repudiation of Deng’s legacy, it has taken an increasingly aggressive stance in foreign policy.
Xi is the first modern Chinese leader to have ignored the foreign policy mantra of “keeping a low profile and never taking the lead” that Deng laid down after the crushing of the Tiananmen Square student protests in June 1989. Deng’s rationale was that China should make up for precious time and focus on developing its economy while minimising foreign misadventures. He also made it clear to the military top brass that the defence establishment must serve the country’s main goal of pursing economic growth and development. Xi’s foreign policy ambitions are closer to Mao’s than Deng’s. The “Great Helmsman” wanted China to be the leader of the Third World. Despite China’s desperate poverty in the 1950s and 1960s, Beijing not only developed nuclear weapons, but also sent a satellite into orbit (which beamed the tune “The East is Red” to the world). Mao was not afraid to take on both the US (the “paper tiger”) and the Soviet Union (the “cowardly revisionists”). And Xi has an advantage over Mao: $4 trillion of foreign-exchange reserves and an arsenal of up to 100 nuclear-tipped ballistic missiles with which to pursue his global vision.
Earlier this year, Michael Pillsbury, a former China specialist at the Pentagon, attracted a lot of attention with his book The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower. The Xi administration has certainly acted to reduce American influence in the Asia-Pacific region. In 2013, Beijing declared an “Air-Defence Identification Zone” over the East China Sea. The zone partially overlaps with those of Japan and South Korea. The People’s Liberation Army is dispatching, often on a daily basis, naval vessels and jetfighters within a few nautical miles of the Senkaku islands, which are claimed by both of China and Taiwan.
More provocative still has been the land reclamation work carried out by the army on several islets and rocks in the South China Sea. For example, the military engineering corps is building a 3,000-metre runway on Woody Island, which could accommodate most types of Chinese jetfighters. There have been fierce protests from the US as well as from those Asian countries involved in sovereignty disputes with China, such as Vietnam and the Philippines. And in April, G7 foreign ministers issued a statement condemning “unilateral actions, such as large-scale land reclamation which change the status quo and increase tensions.” For the past two years, Xi has done everything in his power to cement the CCP’s control over the military. Hardly a week passes without either a senior general professing military officers’ “total unison in thought and action with the central party authorities [and] with comrade Xi Jinping as General Secretary.”
Perhaps more effective than these tough tactics, however, have been the economic inducements that Beijing has used to win the support of its neighbours, particularly the 10 members of the Association of Southeast Asian Nations (Asean). In 2010, Beijing established the China-Asean Free Trade Area, which was the first salvo in what some analysts describe as China’s “economics-based diplomacy.” The apparent success of the Asia Infrastructure Investment Bank (AIIB)—which has gained the support of several key allies of the US, including the UK, France and Germany, as well as Australia and South Korea—has demonstrated the attractions of Chinese capital. (There was consternation in Washington at the UK’s involvement in the AIIB. One US official told the Financial Times: “We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power.”) The Chinese government has also set aside $40bn for a separate tranche of infrastructure-related loans for which Asian countries can apply.
The Chinese leadership aims to bind its Asian neighbours in what Xi calls “a destiny based on commonality of interests,” in the hope that they will choose the PRC rather than the US. Until recently, the Asean states had vowed to speak with a single voice in sovereignty negotiations with Beijing, and they were happy to play off the US against China. However, Laos and Cambodia, which are seen as clients of Beijing, have in the past two years broken ranks with “anti-China” members of Asean such as Vietnam and the Philippines. Xi is confident that China will be able, before too long, to drive a wedge between Asean and the Americans.
Xi’s appeal to nationalism has been popular with the young. And, for the moment, the repressive apparatus of the state seems to be working. However, as the American sinologist David Shambaugh argued in a much-discussed article earlier this year, the way the police-state apparatus has targeted “the press, social media, film, arts and literature, religious groups, the Internet, intellectuals, Tibetans and Uighurs, dissidents, lawyers, NGOs, university students and textbooks” demonstrates how fearful the regime has become. While it would be foolish to predict the demise of the Communist Party in China any time soon, Xi’s faithful impersonation of Mao, coupled with his failure to offer a new vision of how China might develop into a modern, democratic state, means that he is unlikely to be judged favourably by history—or by China’s growing middle class.
