SYSTEMIC CHANGE UNDER XI JINPING

In the run up to the quinquennial Party Congress of the Communist Party of China (CPC) being held from October 16^th 2022, there is a frenzy of publications by the China-watching community in the media. They cover several topics and explore many facets, but retain an overwhelming focus on the likely personnel changes at the leadership level: particularly in the Politburo and its Standing Committee.

Another issue attracting the attention of China-watchers is the likely changes in foreign policy, especially with respect to the Taiwan issue in the backdrop of the Ukraine war and Beijing’s display of military power following the visit of the US House Speaker Nancy Pelosi. However, the most important underlying shift is the ‘systemic change’ taking place in China under Xi Jinping. This is not a concealed phenomenon and is being shouted from proverbial rooftops in the form of the slogan of the ‘New Era’ unveiled by Xi Jinping.

The ‘Before’ Xi Patterns

It is easy to miss the importance of the radical changes introduced by Xi since the beginning of his rule and even more so since the 19^th Party Congress in 2017. His anti-corruption campaign has attracted more eyeballs as have his Zero-Covid measures and crackdowns against private businesses. However, Xi embarked on a fundamental change in the ruling philosophy almost from the moment he assumed power.

Prior to him, Deng Xiaoping instituted a system in China which delivered a fundamental break from the Maoist ideology. It took Deng more than a decade to institutionalize his ruling philosophy. He diluted the extreme importance of class struggle, reduced the role of Party from the daily life of individuals, gave up on competing with the rest of the world in terms of ideology and shifted focus to economic growth even if it meant the infiltration of western culture and ideology which could adversely impact the CPC.

The private sector was encouraged and given the leeway to grow and contribute to society and China worked within the US dominated international system and prospered. Deng of course insisted on the primacy of the Party and ideology, but accommodated all changes under the new theory of ‘China being in the initial stage of socialism’ and ‘Socialism with Chinese characteristics’.

Deng’s successors took forward his theory with some adaptations. Jiang Zemin co-opted the newly successful private entrepreneurs within the Party under the theory of ‘Three Represents’. Hu Jintao emphasized redressing the inequalities and injustices brought about by the capitalist system: corruption, environmental degradation, labour exploitation etc. While there was consensus on the need to tackle such issues and curb vested interests which prospered through corruption, no fundamental change in the system instituted by Deng Xiaoping was envisaged.

Launch of Xi’s New Paradigm

Xi Jinping, soon after taking power in 2012, during his first visit to Guangdong province, in a now famous leaked speech, spoke about challenges to the survival of the CPC and argued that the Communist Party of the Soviet Union collapsed because of diluted ideology and separation between the Party and the military. Along with the anti-corruption campaign, he also began to mandate frequent Mao-style ideological studies, not only within the Party and PLA, but also in universities and schools. Later in 2017 he famously declared that “Government, the military, society and schools, north, south, east and west – the party leads them all”.

In his first term Xi also paid close attention to the reform of PLA through the anti-corruption campaign and a rigid ideological regime to make them a better fighting force capable of taking on new challenges facing China. During this period, Xi was still not challenging the international system, was promoting a new style of major power relations, and did not attempt to alter the fundamentals of the Chinese economic system. In fact, in the resolution of the third Plenum of the 18^th Central Committee in 2013, there was emphasis on the major role of markets in resource allocation.

The 19^th Party Congress and the New Principal Contradiction

The real turning point came at the 19^th Party Congress when Xi Jinping’s ‘Thoughts on Socialism with Chinese Characteristics for the New Era’ was enshrined in the Party Constitution. The Congress resolution also altered the fundamental contradiction (which is Communist speak for the guiding philosophy) to one “between unbalanced and inadequate development and the people’s ever-growing needs for a better life” from one Deng had defined as “the ever-growing material and cultural needs of the people versus backward social production”. This was a major change, whose implications were not very clear at that stage and no specific policy was put in place immediately to implement it.

Xi’s change in focus became evident shortly after that, when the role of the Party was emphasized with all private businesses (Chinese and foreign) compulsorily required to have party cells in their businesses with party leaders even having a role in decision making. This was a major change from Deng’s policy. This of course did not mean that private business would not be allowed to operate. However, they are required to work for country and the people and not for profit motive only. In this context, Xi, in a clear message, days after IPO of Jack Ma’s Ant Group was cancelled in 2020, praising an early 20^th century businessman Zhang Jian, stated that “Outstanding entrepreneurs must have a strong sense of mission and responsibility for the nation and align their enterprise’s development with the prosperity of the nation and the happiness of the people”.

Later in the summer of 2021, along with the slogan of ‘Common Prosperity’ came a much wider crackdown on the consumer-facing tech sector and real estate companies. There has been a clear reversal from the 2013 third plenum resolution of markets playing a major role in resource allocation to one where the Party decides what are the specific industries in which capital should be allocated. Companies were also forced to donate much larger sums to philanthropy, to meet the goals of Common Prosperity. The campaign’s focus on the “disorderly expansion of capital” encapsulates these policies. What Xi is doing is best summarized by academic Yuen Yuen Aung as “ordering away the ills of Capitalism” through party dictates instead of gradual transformation through rule of law, independent judiciary, progressive transparent legislation and free press. Xi undermined the feeble free press, subordinated the judiciary completely and believes that Party can rectify itself.

Xi’s approach to private businesses and capital obviously met not only with criticism and resistance¹, but also discouraged entrepreneurs in China. Xi had to moderate his policy implementation, particularly in the face of a sharp economic slowdown as it threatened to destabilize society in the crucial year of the Party Congress. Some analysts even see the resistance from Premier Li Keqiang when he spoke about Yangtze River not flowing backwards recently, meaning reforms and opening up would continue (role for private business was a crucial element of that). However, given the fact that Xi was able to get his thoughts endorsed at the Party Congress in 2017 and would look to further bolster it at the upcoming Party Congress, it is unlikely that his common prosperity policy would be reversed, though it may get moderated tactically.

Xi Jinping’s ‘rejuvenation vision' and the 20^th Party Congress

Xi’s new development model, under the rubric of ‘High Quality Growth’ emphasizes Science & Technology innovation, high-tech manufacturing with focus on domestic consumption and reduced reliance on cheap manufacturing exports. His dual circulation policy, while keeping China open to foreign technology and capital, is now restricting access to China’s markets and looking to capture foreign markets through technology standards set by China. The model also emphasizes new industries such as alternative energy vehicles, semiconductors, artificial intelligence etc. which are also environmentally sustainable. It is also much more conscious of security aspects, given that the new technologies are dual use and have military applications. However, the scope of this is even broader, with agriculture and food also considered a matter of security. In a way it is a systemic change from Deng’s model of reform and opening up.

In the meantime, like Mao in 1945 and Deng in 1981, Xi was able to get a resolution on Party History passed in November 2021 by the Central Committee, which endorses his ruling philosophy and style. Like Mao and Deng before him, this resolution also criticizes, though obliquely, his predecessors. Such resolutions have come after overcoming resistance and internal debates, and once adopted, have laid the Party line for the next 30 years or more. Hence, in this case too, Xi has already achieved what he set out to do in 2012 and more clearly spelt out in 2017. He has to now put in place personnel of his choice who are not only loyal to him but also adhere to his ruling ideology. Given his hold over the organizational department, propaganda organs, and PLA and security agencies, there does not appear any reason why he should not be able to put this in place. He may accommodate a few people who are not his loyalists, but they would not be in a position to derail his policies and ruling philosophy.

However, this does not mean that there would be no resistance within China to Xi or no tactical adjustments by Xi. Such trends were seen during both Mao and Deng’s time. But there was no real challenge to the new fundamental principle. The context is less challenging for Xi, as people see the business class as corrupt and not earning their fortune through hard work. Anyone opposing Xi’s principles would likely be seen as associated with the corrupt and against the people. In fact, in a distinct change in political style, unlike in the Dengist system, where people are not involved and only elites decided policy, Xi has reached out to the masses through propaganda campaigns and personally during his tours throughout the country, almost like an election campaign. He has mobilized them not only on nationalist sentiments, but also by highlighting the role of the Party and how people’s happiness remains the original motive of the Party. It is also likely that the welfare measures being put in place by Xi in terms of social security such as pension, medical care, cheap housing and education would be popular with the people.

On issues such as Hong Kong, Xinjiang and Tibet, Xi has followed a hard line. But the objectives are not confined to crackdown on separatists. The larger goal is to assimilate the regions completely, erase their distinct religion, culture or political freedoms in the case of Hong Kong and make them loyal to the Party and its view of China. While security measures were taken by his predecessors, there was some liberalization on the religious front and the policy of Sinicisation and assimilation was not pushed so forcefully.

The more practical signs of change are noticed in the mushrooming of institutes studying Xi’s Thoughts on various issues, People’s Daily publishing equal number of quotes of Mao and Xi on the eve of party centenary celebrations in July 2021 as against much smaller number of Deng, Jiang and Hu quotes. Number of photos of Xi at an exhibition on this occasion was also next to Mao, with Deng, Jiang and Hu neglected. The evidence that Xi would be successful in getting endorsed his policy and ideology platform at the 20^th Party Congress is seen in the visit on September 27, 2022 to a museum which displays the achievements of the Party since 2012, with the entire Politburo in tow.

Balancing China on the International Stage

The China Dream of Xi and great rejuvenation of China are not only about prosperity of China and its people. It is also about China’s role and influence in the international arena, which inevitably leads to competition with the West. Xi has often proclaimed that China is close to the “centre stage of the world” meaning it is close to becoming equal to US and believes that West is in decline. The One Belt One Road (OBOR) policy is practical element of this challenge to the West. Its activity is not confined to economic realm or even military affairs.

New Chinese concepts for global governance under Global Security Initiative, Global Development Initiative, and Community of Shared Future for Mankind are being pushed to establish a new international order in the long term. The West is clearly being criticized as continuing with Cold War mentality, indulging in small cliques, zero-sum games and so on. Overall, there is a concerted effort to promote a Chinese model of development. To further this model, the CPC reached out to 170 political parties during its centenary celebrations in 2021, held the second world political party conference in 2021 and promoted Xi’s pet themes and concepts.

It is obvious that Xi has worked over last decade to orient China towards a new kind of engagement with the world, which will get entrenched further in the Chinese system after the 20^th Party Congress. It would be extremely difficult to challenge this new paradigm and expect major adjustments. The international order is likely to witness more tensions and friction   in the decade to come given such Chinese objectives and the response already visible from other major powers.

Endnotes

1. Senior academics and intellectuals like Gu Hailiang (Peking University), Li Yiping (Renmin University), and Zhang Zhanbin (Central Party School) published articles, where they provide sophisticated arguments about the necessity of Common Prosperity.