There is a certain predictable rhythm to China’s history which, in some ways, is as immutable as the slab-like cliffs which line the nation’s great riverine artery, the Yangtze. These rocky sentinels have seen, time and again, the same ebb and flow of political fortunes as aspiring men and women with disparate personalities with wildly differing ideologies having reached for, and attained supreme power, then decide to take steps to perpetuate that power by institutionalizing their rule. It happened with Qin Shih Huang, Yuan Shikai, Chiang Kai-shek, Mao Zedong, Den Xiaoping, to name a few.
With the recent declaration from the Communist party that they are moving to abolish term limits for the presidency, Xi Jinping has made his move to join that club.
He is counting on a gathering of nearly 3,000 lawmakers to show nothing less than unequivocal support for his bid to govern China virtually indefinitely by setting aside a decades-old safeguard against despotic rule. The annual legislative session, which starts Monday, is set to approve a proposal to scrap presidential term limits. But anything less than a near-unanimous vote at the National People’s Congress could signal disquiet within the Chinese establishment and embolden critics of Xi in a country scarred by the disastrous policies of Mao Zedong.
Xi is in actuality popular with China’s rural and working classes, in large part due to his highly-publicized, far-reaching crackdown on corruption as well as a carefully-crafted brand image as an avuncular, down-to-earth leader who likes football (soccer) and who looks a rounder in a business suit than the usual, super-fit political world leaders. Vocal discontent with his efforts to consolidate power appears largely limited to China’s urban elite. The negative reaction to the news also seems to have come as something of a surprise. After an initial flurry of criticism online, widespread censorship was imposed, with banned terms including "immortality," "ascend the throne" and even the letter n as the ubiquitous censors began their scrubbing.
In fact, so wide-ranging has the crackdown been that even Winnie the Pooh has not be spared.
All references to that fictional bear, to whom in body shape at least Mr Xi bears some resemblance (although a panda might be a more apt avatar), were excised from Chinese cyber space. Vigilance against the teddy rose after internet users posted a picture of Winnie hugging a pot of honey and saying: “Find the thing you love and stick with it.” But most numerous among the prohibited searches, as well as the most suggestive of where Beijing’s political frailties may lie, were echoes from China’s own history, according to a list compiled by China Digital Times, a California-based website which monitors Chinese censorship. “The emperor’s dream”, “the wheel of history” and “Dream of Returning to the Great Qing (dynasty)” were among dozens of culled phrases. It is often said that the weight of Chinese history rests heavily on the modern psyche, but it seems satirical parallels from the past are particularly baleful to Xi, whose signature “China Dream” vision aims to revitalise his country by recapturing simply expressed glories.
State media has defended the constitutional revision, saying it brings the tenure for the presidency in line with Mr. Xi’s other posts, party chief and military-commission chairman, from which he derives his true authority. Those positions have no formal term limits, though party rules prohibit life tenure for any leadership post.
“This amendment doesn’t portend changes to the retirement system for leading party and state officials, nor does it mean life tenure for leaders,” the Communist Party’s flagship newspaper, People’s Daily, said in a Thursday commentary. Rather, the change will help “protect the party center’s authority and centralized, unified leadership,” it said.
By amending the constitution to entrench one-party rule,Xi also strengthens his professed commitment to “rule of law” and his self-styled image as a fearless punisher of corrupt officials and other miscreants, some legal experts say.
While past congresses have allowed officials to powwow over policy and, to some extent, vent critical views, Xi’s sheer dominance could mean this year’s two-week session offers little more than obsequious kowtowing displays of loyalty to the new Paramount Leader and his agenda.
Constitutional amendments require approval from at least two-thirds of congressional delegates. When the constitution was last revised in 2004, just 10 dissents and 17 abstentions were recorded among 2,890 valid ballots cast. While the congress has never actually shot down a government proposal, votes on controversial bills -- requiring a simple majority to pass -- have occasionally veered off script. In 1992, nearly a third of lawmakers voted against or abstained from a motion to approve the Three Gorges Dam project, which later caused environmental damage and displaced more than a million people.
Term limits on China’s presidency may be removed as part of several constitutional amendments to be considered at the annual congressional meeting that starts March 5. While somewhat controversial, the abolition of term limits is expected to be approved. This will have negative implications for China’s economy, which has experienced a slowdown in growth in recent years, even in the best case scenario.
Xi has worked hard to assert his authority over the sprawling apparatus of power, steadily dismantling the model of collective leadership that started taking shape in the 1980s under Deng Xiaoping. Seeking to prevent a return to the Mao-era over-concentration of power, Deng’s administration set a constitutional cap of two presidential terms in 1982 and established clearer divisions of duties between party and state.
Since becoming party chief in late 2012, he has assumed control of the economy, traditionally the domain of China’s premier, quietly shunting the current incumbent Li Keqiang, into more of a bureaucratic role as technocratic overseer rather than instigator of ideas. Via his powerful majordomo Wang Qishan, Xi has pursued a sweeping anticorruption drive that has lasted far longer than previous campaigns, and expanded his targets to include officials deemed disloyal and inept as well as potential rivals from the factions of previous state presidents. Western observers, often baffled by the tea-coloured opacity of Chinese Communist Party politics, seem united in perceiving a purge-like quality to some of these actions.
He has personal oversight over high-level appointments, ending his predecessor Hu Jintao’s experiment with internal straw polls, and swiftly promoted his own allies into top ranks. In October 2017, the party proclaimed Mr. Xi as its greatest living theorist and gave him a second five-year term without naming a likely successor -- a rather unsubtle signal of his plans to stay in power for the long haul. A main task of this month’s congress is also to fill an array of government jobs, with Xi allies likely to assume key portfolios.
Lawmakers are also expected to enshrine Communist Party rule as a constitutional principle, approve the creation of a powerful anticorruption agency that expands CCP oversight over all public servants, and review plans for restructuring China’s sprawling bureaucracy – all key steps in Xi’s efforts to install himself at the center of the party and government.
The stakes are high for Xi, whose name is closely linked with every major policy spanning the economy, development, environment and diplomacy. He must manage a long-term slowdown in an economy weighed by high debt loads and an aging population. His administration also faces the threat of a trade war with the U.S., and geopolitical tensions, particularly around North Korea’s nuclear program.
Moreover, Xi needs history on his side as Beijing joins a battle for the moral high ground between two competing political systems -- the capitalist democracies of the west and China’s market-driven authoritarianism. Flushed with the success of four decades of “reform and opening”, China’s ideologues are not holding back on their criticism of the west as they extol the decisiveness of Beijing’s top-down polity and its vaunted ability to deliver developmental progress.
Not only has China lifted more than 800m people out of poverty in the past 40 years, according to the World Bank, it is also on track to create a cohort of middle-class consumers 550m strong by 2022, according to the consultancy firm McKinsey. Much of this success has come because of the ability of the Communist party to mobilise resources and build infrastructure at a pace that puts the rest of the world to shame.
By contrast, the West has in some ways struggled. The global financial crisis of 2008, compounded by a welfare crisis in the US and some European countries, contributed to a stagnation or decline in living standards for many people, while the wealthiest one per cent grew richer. The growth of populism and anti-globalisation sentiment, meanwhile, emboldens right-wing political groups. The dislocations of Brexit have challenged the cohesion of the European project and created an uncertain future for the UK. And now with the unpredictable Donald Trump at the reins, financial markets will more than ever be seeking metaphorical safe harbours and more stable prospects than the president might be able to offer.
Those expecting Xi Jinping to enact sweeping fiduciary changes might be disappointed though. He clearly isn’t a market reformer. Under his tenure, China has focused on supply-side reform to reduce overcapacity and improve the financing of state owned enterprises. Financial stability has been another priority, coming at the expense of true market-oriented reform.
Supply-side reform encompasses overcapacity reduction in state-controlled sectors like coal and steel. Excess capacity and overproduction resulted in an inventory glut of particular commodities in recent years, and reducing the number of factories producing these goods has helped to bring down the excess inventory, even though additional planned factories have come online in the meantime. Financial stability has emphasized controlling risks in the financial system that have been associated with overleveraging as well as innovations in the shadow banking sector. State owned enterprises, in particular, face high leverage, and much of the funding has come from the shadow banking sector when bank finance was insufficient.
Overcapacity as well as overleveraging and reliance on the shadow banking sector arose in the wake of the 2008 global crisis, as China implemented its fiscal stimulus packaged centered on constructing infrastructure across the nation. This resulted in intensified production of commodities and expanded borrowing in support of the effort.
These reform policies have reacted to problems in the economy, but have not pushed market-based changes forward. Reducing barriers to efficiency in potentially profitable areas in the services industry would increase China’s growth prospects. Allowing for market forces to function more freely in the financial sector would also improve GDP, dampen risks, and reduce the necessary role of the state in this area.
More of the same policies will cause China to linger in a phase of structural transition. Rather than successfully moving from a manufacturing-based economy to a service-based economy, China will remain somewhere between the two. The reason for this is that China has yet to truly embrace service sector reform. Even though China has encouraged the growth in new service industries like e-commerce and financial technology, inefficiencies and vested interests abound in traditional sectors like health care and public education. If China wanted to move out of its middle-income status, it would seek a strong, reform-oriented leader.
Xi has stressed consumption as a way to move China’s economy to the next level, but this is insufficient to generate long-term growth. This approach emphasizes the demand side, but once again, fails to address the service industry on the supply side, of which a large portion of consumption would draw from. In the U.S., for example, domestic consumption of services, particularly banking and health care services, comprises about 50% of GDP.
In addition, experts believe that Xi’s trademark corruption crackdown campaign negatively impacted economic growth by reducing sales of luxury goods. The effort didn’t address the overarching institutional reasons for corruption: the presence of the state throughout the economy and inadequate rule of law. While the crackdown was effective in underscoring Xi’s influence, it did not strengthen institutions that would address corrupt behavior in the long run. As Xi’s power only grows, it bears asking, in what ways will he squeeze government officials to legitimize his rule, and what effect will this have on the economy?
China does not have a good track record under political strongmen. The last leader to rule for a long period without term limits was Mao Zedong. Due to his vast power, Mao was able to carry out the Great Leap Forward, in which grain was transferred from the countryside to cities, resulting in massive famine in rural areas, as well as the Cultural Revolution, in which officials and citizens were heavily persecuted. These events were disastrous for human rights as well as for the economy, leaving China mired in poverty for many years.
So, it seems, at best, that Xi Jinping will carry out more of the same state- and stability-focused economic reforms while refraining from undertaking more serious market-oriented reforms. At worst, an even more powerful Xi may resort to heavy-handed tactics to deter any opposition, with seriously negative economic implications. The prospects are not encouraging, although I’d like to be wrong.
He said last year that China’s experience “offers a new option to other countries and nations who want to speed up their development while preserving their independence”. Since then a host of lesser officials have begun to talk about China’s example to the world, while insisting that Beijing will never force its “model” on other countries. In this context, the plan to scrap presidential term limits may exacerbate the clash of political systems. Xi’s actions will likely play into rising fears about China among Americans, who will further conflate China’s leadership with that of other authoritarian regimes like Russia and Turkey. Combined with Beijing’s bellicose and unilateral actions in the South China Sea, these concerns may ultimately be counterproductive towards Chinese attempts at regional hegemony, for while America under Trump may not be as overtly inclined towards an Asian “Pivot” a la Obama, they have given rise to a budding regional rivalry with none other than a resurgent Japan, led as it is by the truculent Shinzo Abe.
As for Xi, Chinese history shows that the fate of those who grab absolute power is often cruel. Only just over half of the country’s 282 emperors died a natural death while still occupying the Dragon Throne. Seventy-six more were done in by the elites chosen to tend to them, via murder or forced abdication or suicide. Perhaps this is the reason for the enthusiastic censoring of historical terms.
China’s greatest vulnerability lurks in the shadows of its past and lessons not learned.