Blowing Down the CPC’s House of Cards
Deng Xiaoping understood that a rules-based system was essential to avoid a repeat of the fanatical terror unleashed under Mao Zedong. But his conviction could not overcome his self-interest, and, as President Xi Jinping has shown, the institutional edifice Deng built in the 1980s turned out to be hollow.
The Only Direction for Xi’s Dictatorship
Over the past decade, Chinese President Xi Jinping has exploited Communist Party leaders’ fear of losing control to increase his own power to levels unseen since Mao Zedong. Party members preparing to hand Xi a third term this month are ignoring their country’s own recent cautionary tale about the dangers of one-man rule.
LONDON – After a decade in power, Xi Jinping is all but certain to be confirmed as China’s first three-term president at the Communist Party of China’s 20th National Congress this week. But before they make Xi a potential dictator for life, the party faithful should bear in mind that dictatorships never end well. Despite his iron grip on power, Xi’s is no different.
To see where Xi’s autocracy might lead, CPC members need only look to Russian President Vladimir Putin’s extraordinary recklessness. Alternatively, they may want to examine their own history and recall the murderous mayhem and infighting that characterized the Cultural Revolution during Mao Zedong’s last decade.
Mao’s brutal one-man rule prompted his adroit and wily successor, Deng Xiaoping, to introduce the two-term limit that Xi later pushed to abolish. To prevent a single individual from amassing so much power, Deng devised a system in which the top leader would have to operate under party elders’ guidance and in consultation with a small group of senior advisers and powerbrokers – a cabinet of sorts. But Xi chucked this model and in 2018 had Chinese lawmakers amend the country’s constitution to clear the way for his third term.
But how will Xi rule once his leadership has been cemented? His slow-but-steady rise through the CPC ranks may be instructive. The son of a senior party official imprisoned by Mao as an alleged rightist, the 15-year-old Xi was sent to the countryside for “re-education” during the Cultural Revolution. Under Deng, the family’s fortunes improved; Xi’s father re-emerged as a reforming provincial boss. Xi himself became a political adviser to the military, then a party apparatchik. While he did not stand out for his political or intellectual prowess, he continued to ascend the party ladder. His status as a princeling played a large part: because his father was an economic reformer, people assumed that Xi would be one, too.
Though it is difficult to pinpoint the exact causes of Xi’s political rise, it is clear that several enabling trends predated his presidency. For example, the CPC had already begun consolidating power by the time Xi became its top leader. Under Xi’s predecessor, Hu Jintao, party leaders worried they were losing their grip on the economy and attempted to reassert government control over the private sector.
Moreover, the notion that the CPC must engage in an “intense struggle” against Western values – the subject of the now-infamous “Document No. 9” that was widely circulated among party members in 2013 – was likely agreed upon before Xi came to power. To be sure, once installed, Xi threw himself into the struggle with gusto.
Similarly, party leaders had been spooked by an alleged attempt by two prominent political figures – Bo Xilai, the then-party chief of Chongqing, and Zhou Yongkang, the party’s former security chief – to seize power in 2012. At the same time, the rise of Big Tech, together with the splintering effects of globalization and urbanization, had made the CPC’s top brass increasingly nervous. So, when Xi insisted on being given greater powers than his predecessors before taking over, they did not put up much of a fight.
Once in power, Xi proved adept at exploiting this growing nervousness to strengthen his control over the party, the government, and the country. His desire to maintain the CPC’s authority over every aspect of life in China has fueled a growing cult of personality that places Xi’s “Chinese Dream” at the heart of the Communist creed.
Increasingly convinced that Western democracies – namely, the United States – are in decline and that the future lies with his model of authoritarian governance, Xi has also overseen a shift in Chinese foreign policy toward grievance-based nationalism. Asserting control over Taiwan is central to this agenda. So is dismantling existing global-governance institutions, which, according to Xi, were founded by Western democracies to protect their own interests.
The many victims of Xi’s quest for Mao-like powers include Muslims in Xinjiang, the citizens of Hong Kong, China’s bullied neighbors, religious groups, and China’s civil society. And now, China’s economic boom seems like another potential casualty of his unchecked rule.
Beset by fundamental weaknesses and crippled by Xi’s zero-COVID policy, economic growth is expected to slow to about 2.8% this year. A possible recession would likely increase record-high youth unemployment even further. Moreover, China’s debt is nearly 300% of GDP, owing to unproductive investments and subsidies for state-owned enterprises. And the country’s real-estate sector, which accounts for about one-fourth of its economic growth, now looks like a giant Ponzi scheme.
But instead of changing course and focusing on restoring economic growth, Xi has doubled down on centralization at the expense of the private sector. Xi’s draconian approach to the pandemic enhanced the surveillance state’s control over its citizens, but Xi continues to reject more effective imported vaccines, implying that brutal lockdowns will continue to cripple the economy. With no one to question his policies, he seems to borrow elements from Maoist economics. Until relatively recently, China’s economy was expected to overtake the US economy by 2030; now, some believe it may have peaked.
It remains to be seen how Xi will tackle these problems. But a post-peak China led by an all-powerful ruler will almost certainly aggravate global uncertainty and instability. If Xi’s first two terms are any indication, we should all prepare ourselves accordingly.
China’s Coming Clash with Economic Reality
As expected, Chinese President Xi Jinping has been given an unprecedented third five-year term. More surprising was the absence of any sign that Xi intends to revise the policies that have done so much economic damage in recent years.
LONDON – Judging by the reporting from the Communist Party of China’s 20th National Congress, Xi Jinping, newly anointed to an unprecedented third term as president, is tightening his political grip and strengthening the CPC’s control over society. Can successful economic development continue in this environment?
I have been thinking for many months now that one day, I would wake up to read that China was revisiting its zero-COVID strategy, overhauling the CPC’s interaction with domestic private business, truly reforming the country’s hukou system of residence permits, and rethinking crucial aspects of its Belt and Road Initiative (BRI) and its recent tactical stance on international governance. It is proving to be a very long wait.
At a meeting with a senior Chinese official a few months ago, I jokingly said that my 30-plus years of “understanding” China may have been a fluke, because I couldn’t comprehend some policies the country had adopted in recent years. The only way I could rationalize them was to conclude that they must be part of some tactical maneuver to neutralize factions within the CPC’s upper echelons ahead of the Congress. Judging by who the Congress has chosen to be next to Xi in the new leadership, there have certainly been further purges of opponents – and very few signs of a reversal of the policies of recent years.
Unless the post-Congress days and weeks produce a big surprise, I see growing dilemmas emerging for Xi and the CPC.
In the BRICs analysis (the purported rise of Brazil, Russia, India, and China) that my then-colleagues and I produced a generation ago, the decade 2021-30 was supposed to be when China’s economy closed in on the US in nominal terms. This was why the BRICs economies collectively might go on in the next decade to become larger than the G7, which would of course represent an enormous change to the modern world order.
This assumed that countries would achieve their long-term potential productivity rate, because Chinese GDP growth would decelerate as its labor-force growth peaked, implying that most of the 4.5-5% GDP growth we had assumed would reflect productivity gains. This growth rate is consistent with what China has stated is both required and desired to double its GDP per capita by 2035 from the 2020 level.
But the last three years suggest that China is unlikely to achieve this target unless it reconsiders its current policies. Virtually all scientific evidence suggests that it is impossible to eradicate COVID-19. The only plausible way to manage it is with proven vaccines. Chinese leaders’ fear that abandoning the zero-COVID policy would overrun the health system and cause mortality to rise is understandable, but the policy is entirely inconsistent with the path to the 2035 goal. It has been clear for some time that China can achieve its goal only if Chinese consumers become a central part of the country’s growth model. Rolling lockdowns make this virtually impossible.
Surely the time has come to import the best Western vaccines and change course. Among other benefits, such a step would send a powerful signal to the rest of the world that China wants to open again. In such a scenario, there could even be a reversal of the ongoing economic decoupling between China and Western countries, as well as of the growing difficulties surrounding most global governance bodies, such as the G20, the World Health Organization, the International Monetary Fund, and the World Bank.
COVID-19 is hardly the only policy area in need of rapid reform. In particular, the authorities must address the growing signs of a vicious circular weakening of the housing market and construction, as well as the lack of success of Xi’s signature BRI.
I hope these words will be read as constructive criticism from someone who saw China’s potential over 30 years ago and imagined a world where it could become the biggest economy. Back then, I thought this would benefit not only China, especially its citizens, but also the rest of us.
This month, the US National Bureau of Economic Research (NBER) published a study, “The Future of Global Economic Power,” looking all the way to 2100. It follows an analytical framework very similar to that of our BRICs analysis, and its main scenario still concludes that China will become the world’s largest economy by the end of the century, with another BRIC country, India, in second place. But there are two other scenarios with less favorable paths of productivity growth. In one of them, India, not China, is the world’s largest economy by 2100. And in the second, productivity falls short of the path of the past three decades, as it has in recent years, and China’s share of global GDP declines notably.
One can only hope that whoever Xi surrounds himself with in the coming years takes the NBER report to heart.
Xi’s Conflict-Prone China
The just-concluded 20th National Congress of the Communist Party of China revealed that, for President Xi Jinping, foregone economic growth is a necessary price to pay for national security. And it is clear from who will surround him at the top of the Party in the coming years where he believes the main threat to China lies.
NEW HAVEN – China’s 20th Party Congress has come and gone. Despite all the fanfare and media hype, it was a hollow event. It revealed little we didn’t already know about China – an autocracy that maintains grandiose ambitions and ideological bluster to match, but is woefully unprepared for an uncertain future filled with risks largely of its own making. That much is evident when the results of the Congress are examined from three perspectives: leadership, strategy, and conflict.
The leadership reveal of the so-called First Plenum – the formal meeting of the Party’s newly “elected” 205-member Central Committee that immediately follows the conclusion of the National Congress – was completely in line with the power consolidation that has been underway since Xi Jinping was first appointed general secretary ten years ago. Confirmation of Xi’s third five-year term as leader of the Communist Party of China (CPC) was never in doubt, nor was his selection of loyalists to surround him at the top in the seven-member Standing Committee of the Politburo.
There will undoubtedly be some jockeying for positions such as premier and the chairs of the two legislative bodies – the National People’s Congress and the Chinese People’s Political Consultative Congress. But the outcomes matter little. In Xi’s China, these positions, once central to the model of consensus leadership that Deng Xiaoping wisely put in place following the death of Mao Zedong, have been marginalized.
Curiously, Xi seems to have a preference for premiers with the surname of Li. Li Qiang, currently the Shanghai party chief and the very public face of China’s draconian zero-COVID lockdowns, is the strong favorite to replace the retiring incumbent, Li Keqiang.
Wang Huning is worth mentioning as the only other noteworthy leadership appointment. Apart from Xi, he is one of two holdovers from the previous Standing Committee and appears to be in line for one of the ceremonial legislative chairs.
But Wang’s role is far more important than that. He is not only Xi’s ideological alter ego, responsible for crafting Xi’s signature “Chinese Dream” as well as “Xi Jinping Thought”; he also has been a prominent proponent of the view that America is in decline. Wang’s 1991 book, America Against America, written after a three-month visit to the United States, paints a grim picture of a country beset by mounting social and political turmoil, ripe for crisis.
When that crisis occurred – the 2008-09 made-in-America global financial crisis – Wang’s view became ascendant within CPC leadership circles, leading Xi to conclude that a rising China was well positioned to challenge a waning America. Wang’s promotion adds worrisome fuel to the US-China conflict, a point I hint at in my new book, Accidental Conflict.
In terms of strategy, the main message of the 20th Party Congress is that China will stay the course of the past five years. This means one thing: national security takes precedence over economic growth.
While the Congress stressed that modernization remains “the central task of the Party,” this statement is all but meaningless. The CPC has lost itself in endless praise of Xi as China’s core leader, the ideological virtues of Xi Jinping Thought, and the all-encompassing need to “pursue a holistic approach to national security and promote national security in all areas and stages of the work of the Party and the country.” In other words, modernization and growth are fine, but only on Xi’s terms.
So, what do those terms look like? An important hint is provided by the Congress’s emphasis on another of Xi’s signature initiatives, the Common Prosperity campaign, which features a variety of efforts aimed at tempering wealth and income disparities. Common Prosperity was also associated with the 2021 regulatory assault on the private sector, especially the once-dynamic internet-platform companies that have since been all but decimated by the purging of “bad habits” associated with online gaming, live-streaming, music, and private tutoring.
While Beijing’s subsequent spin has attempted to soften this regulatory clampdown, the targeted companies have been crushed in the equity market, as have the animal spirits and potential for indigenous innovation their spectacular growth once promised. The outcome of the 20th Party Congress underscores an important distinction between economic growth “with Chinese characteristics,” as it has long been described, and a very different strain of development with Xi Jinping characteristics. The latter unfortunately throws cold water on the Chinese dynamism that many, including me, have long emphasized.
Perhaps the most noteworthy implications of the Congress pertain to conflict. The Congress emphasized the “unparalleled complexity,” “graveness,” and “difficulty” that China faces at home and abroad. While hardly an Earth-shattering admission, it exposes Xi’s willingness to accept the growth sacrifice as a steep price to pay for national security.
The opaque ideological dogma of the Congress only hinted at what to expect from China in meeting those challenges. That was more evident in Xi’s July 2021 speech commemorating the 100th anniversary of the CPC’s founding. “We will never allow any foreign force to bully, oppress, or subjugate us,” he said then. “Anyone who would attempt to do so will find themselves on a collision course with a great wall of steel forged by over 1.4 billion Chinese people.”
In view of this warning and the challenges that Xi stressed at the 20th Party Congress, the collision with the US championed by Wang takes on new meaning. The clash concerns not only Taiwan, frictions in the South China Sea, and Western pressure concerning human-rights abuses in Xinjiang. At its root, it’s about the containment strategy that the US has pursued toward China – a strategy President Joe Biden’s administration recently turbocharged with new export sanctions aimed at China’s advanced technologies. It’s also about China’s “unlimited partnership” with Russia and the risk of guilt by association with Vladimir Putin’s unconscionable war on Ukraine.
As Xi stressed at the Congress, these are obviously complex challenges. But in celebrating the CPC centennial, he left little doubt of what those challenges might portend: “Having the courage to fight and the fortitude to win is what has made our party invincible.” A modernized and expanded military puts teeth into that threat and underscores the risks posed by Xi’s conflict-prone China.
China Takes Center Stage
Chinese President Xi Jinping seems determined to use his unprecedented third five-year term to reshape international institutions to suit his country’s interests. But the world’s leading powers must cooperate in addressing global challenges like climate change.
MADRID – When Deng Xiaoping came to power in 1978, following the death of Mao Zedong, he outlined a new national strategy that emphasized gradualism, ideological flexibility, and discretion. Deng summarized his doctrine with the dictum: “Hide your strength and bide your time.” In the decades that followed, this approach underpinned China’s transformation into an economic powerhouse, with Deng’s successors focusing on growth and maintained a low international profile. But it is clear that a low-profile foreign policy is not part of Chinese President Xi Jinping’s plan to deliver “the great rejuvenation of the Chinese nation.”
Xi’s confirmation as China’s first three-term president, which will almost certainly happen during the Communist Party’s 20th National Congress this week, comes at a delicate moment. According to Oxford Economics, China’s annual GDP growth will average 4.5% over the next decade, before slowing to about 3% between 2030 and 2040. Over the past 50 years, China’s economy has grown at an average annual rate of nearly 10%. But its economic boom could soon become a thing of the past.
Against this backdrop, the United States’ annual GDP growth rate could soon overtake China’s for the first time since 1976, the year Mao died. In fact, the two economies are now growing at roughly the same pace: the World Bank has recently revised down its forecast for China’s economic growth this year to 2.8%, compared to an expected rate of 2.5% in the US.
In recent decades, much Western policy toward China has rightly focused on the need to integrate it into the international community so that its rapid economic rise would be peaceful. In the coming decades, the international community will have to prepare for a scenario in which China’s economy does not achieve more than moderate, or even low, growth.
Moreover, China’s spectacular economic growth has generated rapidly widening social inequalities, which could compromise its social cohesion in the future. It is unclear how Xi’s “common prosperity” campaign will affect economic growth. But whether Xi can achieve his stated goal of narrowing the wealth gap without damaging the economy is an open question.
China’s centrality to the global economy means that its policy decisions have far-reaching implications. Shanghai’s port, the world’s largest, was operating at lower capacity for months, owing to Xi’s zero-COVID policy. While repeated lockdowns have caused the Shanghai province’s GDP to contract by 13.7% year on year, they have also severely disrupted global supply chains and caused inflation to surge worldwide.
Since he came into power in 2012, Xi has repeatedly signaled his ambition to increase China’s influence on the international stage. The recent Shanghai Cooperation Organization Summit in Samarkand, Uzbekistan, where Russian President Vladimir Putin was forced to acknowledge China’s “questions and concerns” about the war in Ukraine, was a case in point.
Xi has been clear about his desire to reshape the international order to accommodate Chinese interests. The existing global-governance architecture, after all, was established after World War II by Western leaders who founded institutions like the World Bank and the International Monetary Fund, and established the dollar as the world’s dominant reserve currency.
As former Australian Prime Minister Kevin Rudd argues in his recent book The Avoidable War, China wants to play a leading role in shaping the global norms that will define the international order in the coming century. Although it remains to be seen how China intends to rewrite these norms, it is unlikely that the international liberal order that was built after WWII will remain fully intact.
While Xi is guaranteed a third five-year term, recent developments suggest that he could stay in office indefinitely. Last year, a CPC resolution elevated the Chinese leader to the status of Mao and Deng, thus clearing the way for him to remain in power long after 2028.
Xi’s sense of his historic mission as China’s leader could prove to be catastrophic. “Resolving the Taiwan question” is central to what Xi views as his legacy, and he has repeatedly signaled his intentions to reclaim the island. But while Xi’s recent foreign-policy assertiveness has stoked fears that China will invade, American and Chinese leaders must keep communication channels open to avoid escalation.
US-China relations will define the twenty-first century, so forging a path to peaceful coexistence is crucial. This will depend not only on Xi’s geopolitical ambitions but also on America’s political future. Next month’s midterm elections will be a major test for the health of US democracy. But they could also have a significant impact on the future of Sino-American relations.
US-Chinese economic decoupling would be catastrophic for both countries and must be avoided. Improving global governance requires that the world’s two major powers be economically and politically healthy. But, more than that, tackling global problems like climate change would be impossible without cooperation. If we are to build a new international order suited for the challenges of the twenty-first century, sanity must prevail.
CLAREMONT, CALIFORNIA – At the 20th National Congress of the Communist Party of China this month, Xi Jinping will almost certainly be confirmed for a third term as the Party’s general secretary and China’s president. With that, he will become China’s longest-serving paramount leader since Mao Zedong, and the rules and norms that are supposed to govern the CPC regime will be shattered.
Those rules and norms were put in place largely by Mao’s successor, Deng Xiaoping, who took power in 1978. Deng knew firsthand the damage the Party’s ideological fanaticism could do. During the Cultural Revolution, one of his sons was paralyzed by rampaging Red Guards. Deng himself was stripped of his official positions and sent to work at a factory in a remote province for four years – one of three times he was purged from government during his long revolutionary career.
To ensure that China would never again be gripped by such terror, Deng – with the support of other veteran revolutionaries who had survived the Cultural Revolution – restored collective leadership and imposed age and term limits for most senior CPC positions. In the decades that followed, China’s top leaders served no more than two terms, and Politburo members respected an implicit age limit of 68.
But Xi has exposed just how fragile Deng’s “rules-based system” really was. In fact, for all the hoopla about Deng’s accomplishments, his record on reining in the CPC regime is mixed, at best, not least because his own commitment to the rules was not nearly as robust as one might expect.
In practice, Deng disdained collective leadership and formal procedures. He seldom held Politburo Standing Committee meetings, because he wanted to deny his main rival, a staunch conservative opposed to economic reform, a platform to challenge his policy. Instead, he exercised leadership through private meetings with supporters.
Moreover, in dealing with leaders sympathetic to pro-democracy forces, Deng frequently violated the procedures and norms he had established. His dismissal of two liberal CPC chiefs – Hu Yaobang in 1986 and Zhao Ziyang (who refused Deng’s order to implement martial law during the Tiananmen crisis) in 1989 – defied the Party’s bylaws.
At the same time, Deng sometimes avoided introducing a rule at all, if doing so could undermine his political interests. Most notably, he – together with other aging CPC leaders – did not impose age or term limits on Politburo members. Even if they could not hold formal government posts indefinitely, they would never lose their decision-making authority.
Likewise, Deng enacted no formal rules governing who could chair the Central Military Commission. This enabled him to continue to do so after he had resigned from his other posts. Following that precedent, Jiang Zemin did the same in 2002. As for Xi, while he had to go through the motions of getting the presidential term limit removed from the constitution in 2018, he benefited from the fact that the CPC has not imposed an official term limit on its general secretary.
There is nothing shocking about China’s struggles to uphold rules and norms. Even mature democracies like the United States face such challenges, as Donald Trump’s presidency clearly showed. But should formal constitutional checks and balances fail, democracies can at least count on a free press, civil society, and opposition parties to push back, as they did against Trump.
In dictatorships, rules and norms are far more fragile, as there are no credible constitutional or political enforcement mechanisms, and autocrats can easily politicize institutions, such as constitutional courts, turning such bodies into rubber stamps. And there are no secondary enforcement mechanisms. China has no free press or organized opposition. If a rule becomes inconvenient – as the constitutional limit on presidential terms did for Xi – it can easily be changed.
While trampling institutional rules and norms may benefit autocratic rulers, it is not necessarily good for their regimes. The CPC’s experience under Mao is a case in point. Unencumbered by any institutional constraints, Mao engaged in ceaseless purges and led the Party from one disaster to another, leaving behind a regime that was ideologically exhausted and economically bankrupt.
Deng understood that a rules-based system was essential to avoid repeating that disastrous experience. But his conviction could not overcome his self-interest, and the institutional edifice he built in the 1980s turned out to be little more than a house of cards. Xi’s confirmation this month is merely the breeze triggering its inevitable collapse.