Xi Jingping: Economic path ahead for China’s disciplined leader remains unclear

07-Oct-2017 Intellasia | AFR | 6:00 AM Print This Post

For Australians pondering what strategist, Hugh White, calls fatefully the “China choice”, this year has presented perhaps the most bracing set of alternatives since victory in the Pacific War more than 70 years ago.

In Washington, Donald Trump is the most ill-disciplined occupant of the White House in living memory, and judging by his failure to pass significant legislation with a Republican-controlled Congress, ineffective to boot.

In Beijing, by contrast, Xi Jinping has emerged as the most decisive, disciplined Chinese leader in a generation, and, given China’s rise in relative strength compared to the West, the most powerful in more than a century.

Xi has swept aside potential rivals at home in his first five-year term, re-established the primacy of the Communist Party in all realms of politics and civil society and run the most far-reaching anti-corruption campaign in the history of the People’s Republic.

Xi’s resounding political authority means that he is certain to be anointed for a second five-year term at the Party Congress, which opens on October 18 in Beijing, and he may have the means to extend his rule beyond that.

More than any of his predecessors since China’s opening to the world in the late 1970s, Xi has focused ruthlessly on re-arming the party with the tools to maintain control of the country and perpetuate its 70-plus years in power.

He has centralised decision-making in his personal office, pushing aside the cabinet and its ministers who in the past were crucial to policy execution in China. He has purged a legion of once powerful comrades and their families in his anti-graft campaign, and pulled the military and state security firmly under his control.

On foreign policy, Xi has displayed a similar sense of urgency and purpose. More than his predecessors, Xi has tried to leverage China’s diplomatic and military strength to press Beijing’s territorial claims in the East China and South China Seas, and lock in the country’s interests on its western flank.

In doing so, he has exploited a strategic opportunity in Asia, opened first by the Obama administration’s caution, and now the instability and incoherence of the Trump administration.

Under Xi, China is building, new institutions, such as the Asian Infrastructure Investment Bank, and the billion-dollar Belt and Road Initiative, to transform the Eurasian continent into a China-friendly strategic and commercial hinterland.

In the short term, Xi’s approach has worked. Chinese leaders since Mao Zedong have always had identifiable competitors among their senior colleagues. Near the end of his first five-year term, Xi has none.

Likewise, it is the party that is firmly in control of China’s direction under Xi’s leadership not the state nor the military, and neither, for the moment, the most powerful actor outside of the governing institutions, the market.

But while Xi’s decisiveness has produced striking outcomes within the party, on the economy, he has made less progress.

There are clear bureaucratic reasons for this. Whereas Xi has the ability to make political decisions and push them through to achieve short-term outcomes as party chief, he cannot snap his fingers in the same fashion to force change in China’s vast, complicated, and globally integrated economy.

Put another way, Xi’s autocratic style may help him in his ambition to strengthen party controls but it does not translate into effective economic policy making.

The argument in favour of greater party oversight and a cleaner CCP is that it will help clear the way for Xi to introduce further market reforms of the kind he espoused soon after coming to office.

Xi is “turning left to turn right”, to use a Chinese saying. In other words, he is using his first term to shore up his leftist base in the party, and then leveraging his accumulated political capital to strike out on a more liberal path in Chinese terms, “turning right”.

This is a neat, and for many Western observers, a reassuring theory. But it is one that does not fit with the policy priorities and belief system that Xi has displayed in office.

Since becoming head of the Communist Party, Xi has focused little on the private sector, either in speeches or policy terms.

Rather, he has sought to protect and consolidate the role of the state sector in the economy.

For Xi, the private sector, which is now responsible for about three-quarters of economic output, and more than 80 per cent of jobs in Chinese cities, is an indispensable tool that, managed properly, will enhance the party’s power. Its growth is not an end in itself.

Even if Xi gets his way at the Party Congress, and stacks the Politburo with loyalists, it is difficult, then, to say what policy changes will follow. With Xi already seemingly all powerful, what new initiatives will he want to pursue that he is now prevented from doing?

Xi may switch his focus away attention away from politics to the economy in his second term. But his political hard line will have a cost at some stage, with many of the enemies he has created waiting in the wings for him to stumble.

http://www.afr.com/opinion/columnists/xi-jingping-economic-path-ahead-for-chinas-disciplined-leader-remains-unclear-20171005-gyvfze

 


Category: China

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