Book summary: One hundred years of the CCP (On Xi Jinping and the future of CCP)

Summary:?Mao Zedong and the twelve other young men who founded the Chinese Communist Party in 1921 could hardly have imagined that less than thirty years later they would be rulers. On its hundredth anniversary, the party remains in command, leading a nation primed for global dominance. Tony Saich tells the authoritative, comprehensive story of the Chinese Communist Party―its rise to power against incredible odds, its struggle to consolidate rule and overcome self-inflicted disasters, and its thriving amid other communist parties’ collapse

Charting a New Path?

One of the most dramatic announcements was further relaxation of the family planning program. The driving factor for this change is the aging of Chinese society—it will become the first major nation to grow old before it grows rich. In 2019 about 12.6 percent of the population was over the age of sixty-five; the UN has predicted that the figure would reach over?17 percent by 2030.

This has caused declining dependency ratios, with only 2.8 young for each elderly person and with a projection of 1.3 young for each elderly person by 2050.

Urbanization was presented as a major factor that would facilitate future growth, boost consumption, and smooth out the inequalities of service provision. To accelerate urban development, the plenum decision announced that local governments would be allowed to experiment with a range of financing mechanisms, including property taxes and the issuance of government bonds.

Diversifying financing avenues was also seen as a way to reduce land protests because much financing had been derived from the conversion of rural land for construction, often with inadequate compensation for the dispossessed farmers.

Consequently, in a dramatic shift, farmers were to be allowed to trade their land rights and thus were afforded more protection against?exploitation by local government officials. Their property rights were to be strengthened and they could use shareholding systems to serve as collateral.

Using Power: It’s the Politics, Stupid

On assuming power, Xi launched a movement for officials to practice more frugal behavior—which he encapsulated in the slogan “four dishes and a soup”—as well as to implement the strongest campaign in recent memory against corruption within party and government ranks. Pictures were shown of General Secretary Xi sitting down in a simple restaurant eating Chinese buns and of him strolling in the winter smog, without a face mask, to press home his common touch.

The length and persistence of the campaign against corruption caught most observers by surprise.

The movement was to catch “tigers and flies”—that is, senior officials as well as those at the grassroots. Later the targets also included “foxes”—citizens who had fled overseas with their ill-gotten gains.

Over four years, the Sky Net campaign returned 5,000 individuals. Among the 1,335 individuals who had fled abroad in 2018, party members numbered 307, netting a total of $519 million. The highest-profile fox was the Chinese head of Interpol, who was brought back in September 2018 and, in January 2020, was sentenced to thirteen years in prison.

Another colorful phrase is “naked officials,” referring to officials who remain in China while their families relocate abroad. Regulations were introduced in 2014 barring any such officials from promotion.

Xi and Wang view the campaign as crucial to ensure that the CCP will function effectively and to restore public faith in the party. The problems are not only with the party but also with the administration more generally. Thus, in 2018 the National Supervisory Commission was created to facilitate going after officials in a range of organizations who were not party members.

The goal is to capitalize on the momentum to attack corrupt behavior among the elite of those who are not necessarily factional enemies.

Navigating the World as a Global Power

China has been more explicit about its aims, and this has caused disquiet in a number of countries in the region and in the West. At the Nineteenth Party Congress, held on October 2017, Xi announced that by 2050 China would be a “global leader in terms of composite strength and international influence,” and in June 2018 he proposed the notion of “foreign policy with Chinese characteristics.”

How to deal with and assimilate China’s rise has created considerable concern.

Clearly, China’s economic rise will change geopolitics; there is already a divergence of views about how threatening this might be to traditional US dominance and agenda setting and whether relations between the United States and China have reached a “tipping point.”?

For the first time in several centuries, the largest economy in the world will not be Western, and the world might come under a leadership that does not share the consensual values and political structures of the West. This has led some US analysts to suggest that policy should shift from engaging China to being more confrontational and even to constrain its rise.?

In addition, a potentially dangerous bifurcation is emerging between an economic Asia where China is the central player and a security Asia that is dependent on US military power. This raises the question of whether China’s leaders will seek to redefine regional and perhaps global trade and investment norms. This may not be as easy for China’s new leaders to achieve as some have assumed.

Certainly, the US abandonment of the TPP and its not joining the Asia Infrastructure Investment Bank (AIIB), a decision taken by the Obama administration, heralds a decline in US influence in Asia that cannot be replaced by increased military spending. However, this does not mean that China will automatically fill the gap.

Powerful countries shape the world, and whether they like it or not, China’s leaders will be forced to take a more proactive stance not only on questions of territorial sovereignty but also on reserve currencies, banking and financial regulations, trade and investment agreements, climate discussions, the provision of global public goods, and so forth.

This will present a huge challenge for the leadership, as it has not had extensive experience with negotiations in many of these areas.

It will have to come to terms with the fact that the country is a major player and the global community will expect clearer explanations of policy intent. The need to focus on its increasingly demanding global role may draw its attention away from the necessary focus on the domestic agenda.

Defining a Role in Asia

The major game changer is the promotion of the BRI (originally called “One Belt, One Road”). Put into motion during Xi’s trip in September–October 2013 to Kazakhstan and Indonesia, it is the signature component of his attempts to develop China’s global standing.

There is a clear domestic rationale for the BRI, and it will form part of China’s strategy to reduce regional inequality by focusing significant funds on provinces such as Xinjiang. By tying in the Central Asian nations, Beijing hopes that this will reduce support for independence movements within the Islamic communities in the Northwest.

The stimulus package that was introduced in 2008–2009 did keep the economy afloat, but it also produced enormous production overcapacity that can be exported to the infrastructure projects along the Belt and Road.

Finally, the administration hopes that its dominance in key sectors funded for the project will help China set industry standards that will form a part of China’s Made in China 2025 strategy.

The challenges and problems confronting development of the BRI are reasonably clear.

As noted,?the association of the BRI with General Secretary Xi might encourage investors to take on projects that are riskier than can be justified by the economic potential. The question arises as to whether there are enough financially feasible projects to go around.

The problem of contributing to China’s debt is raised by the fact that many of the core countries have poor credit ratings and are not stable political environments.

The Challenge of Hong Kong

The scale of the 2019 demonstrations took both the Hong Kong authorities and Beijing by surprise, and their responses badly misjudged the situation. Beijing’s strategy has been to stress that Hong Kong’s future is tied to that of the mainland and all will enjoy economic growth.

This may be true for the tycoons, but it is not the case for many young people who are faced with unaffordable housing and dismal job prospects.

For Hong Kong citizens, identity has trumped the claim of economic prosperity offered by Beijing. Just like it thought regarding Tibet and Xinjiang, and even Taiwan, the CCP leadership thinks that such problems can be erased by means of economic development.

The initial response in Beijing was to impose censorship on reporting about the demonstrations in the mainland, but as they continued and spread, the propaganda network moved to present scenes of chaos and violence.

The onset of COVID-19 brought a temporary halt to demonstrations and gave Beijing the opportunity to consider its response.

One clear outcome was that Beijing was determined to exert greater control over Hong Kong through the Basic Law and the principle of one country, two systems.

Patriotic education was stepped up, and there was greater oversight of the appointment not only of the chief executive but also of other senior officials, who would be evaluated on the basis of their patriotism.

The offices overseeing Hong Kong were reorganized, and in January and February 2020 the heads of the Hong Kong liaison office and the Beijing-based Hong Kong–Macau Affairs Office were replaced by officials known to be close to Xi Jinping.

In addition to the failure of policy toward Hong Kong, the hope for reunification with Taiwan is dimmer than ever before. China’s economic and trade practices have incited strong opposition not just from the United States but also from other major trading partners.

Not surprisingly, in September 2019 Xi Jinping sounded a warning note to young officials at the Central Party School in Beijing. He painted a picture of a party surrounded by challenges both internal and external,

and he used the term “struggle” a reported fifty-six times.

Looking to the Future

China’s response to the increasing pressure from the United States and other nations was dealt with at the CCP’s fifth plenum, which was held October 26–29, 2020.

The CCP presented its vision for the future. There were three key components: the promotion of Xi Jinping’s theory of “dual circulation,” the outline of a new five-year plan that was a first step in realizing a longer range vision by 2035.

This was the first time that such a linkage had been made since 1995 and began to fill some of the details of the long-term objectives outlined at the Nineteenth Party Congress.

Dual circulation encapsulates how the Xi administration intends to manage globalization for the national benefit. If enacted fully, it would have major ramifications for the global economy.

The “first circulation” contends that China will shift away from reliance on global integration; the “second circulation” emphasizes reliance on domestic consumption and technological upgrading.

The approach is driven by Beijing’s analysis that even with a Biden administration, tensions with the United States, including tensions over trade, and the pressure to relocate manufacturing chains will endure, and that some decoupling of the two economies will continue. Last, but not least, China is concerned that overreliance on trade can expose the country to risks should other countries hold China to ransom.

Although dual circulation will impact global?business and trade, the outcome might not be as severe as might be expected. Foreign multinationals are still heavily committed to the China market, integrated manufacturing systems are not so easy to relocate, and China needs access to global financial markets to meet its ambitious developmental goals.

Importantly and unusually, the plan was presented as part of a fifteen-year project that would culminate in 2035 with China attaining “socialist modernity.” China was expected to become a mid-level developed country, equivalent to that of South Korea currently. This would result in almost doubling the ranks of the middle class, while the inequality between urban and rural China would be significantly reduced.

China’s citizens would enjoy working in a green economy while living in an improved environment. This progress would enable China to enhance its soft power and allow it to play a more active role in reform of the global economic system.

LEGACIES FROM THE PAST, CHALLENGES FOR THE FUTURE

Party Dominance of State and Society

Although there are eight other “democratic” political parties in the PRC, the CCP is the only one that matters.

Unchallenged by other organizations or significant religious or social groupings at the national level, the party presents itself as the sole authority, with the right to interpret the past and lay?out the policies for the future.

It also claims to be infallible.

Even though some observers have teased out the proto-democratic elements of CCP practices before 1949 and its willingness to collaborate with others, as seen during the two periods of the united front, an authoritarian thrust was always present in the drive to consolidate party power and take the national stage.

The preeminence of the party and the strengthening of its role over?state and society have persisted to the present. In the view of one well-placed Peking University professor, “socialism with Chinese characteristics” under Xi Jinping simply meant CCP leadership.

The party has never accepted autonomous activity outside of its sphere of control that might challenge its power, and it has continually sought to control as much of state and society as feasible. Party cells exist throughout society and operate not only in government organizations and SOEs but also in private businesses and nongovernmental organizations.

The party will recruit those elements it deems important to prevent a rival organization from developing, and it will seek to destroy those that it views as a threat.

This has meant that recruitment can be surprisingly flexible for a party of “workers and peasants.”

By the end of the 1990s Jiang Zemin fought to create space under the Three Represents for private entrepreneurs to join the party, because they had become an important driver of economic development.

The crushing of autonomous student and workers’ organizations in 1989 is the most visible example of the repression, other targets were the China Democratic Party, the Charter ’08 movement, and by the mid-2010s, human rights lawyers.

Clandestine Work and Military Struggle

Before 1949 much CCP activity took place underground, operating in uncertainty, and enduring protracted warfare. The cell structure that the party adopted was designed to protect its members against the ever-present dangers of discovery and betrayal. If one party member was discovered, he or she would inform on as few other comrades as possible.

The nature of the struggle meant that military support is the key to power for any CCP leader, as is respect for the military as an institution.

This heritage created an especially violent language that was combined with the inability to accept criticism of the core concepts. Harsh rhetoric and even violence were deemed acceptable when dealing with critics—not only those who attacked the party from without but also often critics from within.

The concept of loyal opposition was rejected. The need to cleanse people’s souls and bring them to accept the truth as defined by the party leadership at any particular time led to virulent campaigns of denouncement and criticism.

Mao’s rise to the summit of party power was backed by support from the military commanders, and in the CCP any aspiring leader must court military approval to consolidate party leadership.

For many in China, especially in the South, the first signs of the party were the military contingents that came down to take over from the retreating GMD; they occupied factories and carried out land reform, leading to the description of the regime as one of military conquest.

On taking power, the new general secretary usually begins with a reshuffle of the military leadership to bring in supporters, the most recent example being Xi Jinping. The relationship was weakened under Jiang Zemin and Hu Jintao, but it was reaffirmed when Xi Jinping came to power.

Xi had the military connections from his father and he had worked in the military as a political secretary earlier in his career.

Techniques of Rule

Use of the term “masses” is significant because there is no intention that individuals should participate as citizens.

The masses are undifferentiated, as are “the people,” and the CCP claims to represent them in their entirety. Being defined as a member of the people is crucial, especially during campaigns. When those who are considered part of the people make mistakes, they can be saved through reeducation and small-group study.

When confronted with unfavorable external criticism, a common CCP response is that the Chinese people (or masses) are offended. The CCP thus claims to represent the views of the entire 1.4 billion Chinese people. ?

Once the reforms began in earnest after 1978, the united front approach was resurrected to attract technicians, engineers, and intellectuals to work with the CCP. Later the broad coalition was extended to include private entrepreneurs, and representation of these groups in the political consultative committees was revived, eventually even within the CCP.

Externally, the approach is used to connect with ethnic Chinese (overseas Chinese, in CCP parlance) and through related organizations, such as the Chinese People’s Association for Friendship with Foreign Countries, to build platforms for global support of its interests and policies.

Challenges for the Future

The CCP experience to date has been remarkable in terms of both gaining power against incredible odds and reviving from the devastation wrought by the GLF and the Cultural Revolution. Not surprisingly, this success has made the Chinese leadership proud of its economic and political model, and now the leadership is far less willing to be told by outsiders how it should regulate its economy, value its currency, or manage its internal affairs.

Despite this, China has not yet achieved the wealth and power that have been its goal for more than a hundred years. The CCP has brought the nation close, but considerable challenges remain.

The easy parts of the reforms have been completed, and the remaining parts will be more difficult and will test the core of party power.

The barriers to forward momentum are both internal and external and cover the political, economic, and global outreach. It does not mean that the China Dream cannot be realized, but hard work and accommodation will be necessary.

Externally, success depends not only on the general health of the global economy but also on how other countries interpret and respond to China’s growth and rising influence.

Increasingly the international community has concluded that, in part, China’s success derives from unfair competition, dumping of products, and forced transfers of technology.

Some former Chinese officials have said that they knew a day of reckoning would come with the United States. As a result, the country needed to prepare the ground to decouple from the US economy to the greatest extent possible. This lies behind the Made-in-China 2025 policy, which seeks to ensure that domestic companies dominate high-tech and strategic industries crucial for the nation’s development.

It also explains why Xi Jinping was willing to agree to the January 2020 trade agreement, which on the surface does not seem to be in China’s interest. Signing was intended to buy China time to significantly reduce its dependence on US trade.

The CCP leadership needs to come to grips with structural issues, but the reform program, especially since China entered the WTO in 2001, has created strong vested interests that wish to maintain the status quo.

With the reforms of the 1980s, it was easier to see who would benefit, as was the case in the 1990s when Deng Xiaoping launched a free-for-all to exploit state resources to get rich.

The current proposed economic reforms will hurt the interests of those who once benefited, while the current anticorruption campaign will cause those local officials on whom Xi Jinping must rely to be cautious and often inactive.

Performance Legitimacy

As belief in Marxism-Leninism declines as a source of its legitimacy, the CCP loses its power to explain development by relying on its “supernatural ability” to divine current and future trends. Instead, better-informed citizens begin to judge performance on more earthly criteria. Two key areas are managing the environment and the economy.

The phenomenal economic growth has created enormous environmental damage and placed tremendous strains on the supply of natural resources, especially water. In addition to the pace of economic growth and the increased urbanization, there are two long-term legacies from Mao Zedong’s approach to development.

The first is the Marxist disregard for the environment and the privileging of production over all other factors.

Mao saw nature as something to be conquered and tamed, favoring the rapid exploitation of natural resources to build up a heavy industrial base.

There is a consensus that the economic model that has served China so well in the past must undergo fundamental changes to maintain the economic momentum.

The two key drivers of growth, state investment and international trade, have reached their limits. They will remain important, but they cannot contribute more.

As the “factory of the world” moves to another destination, China will have to develop higher-quality production. The easier gains of investment in transport—witness the massive development of high-speed rail (and high-level corruption) and housing that were promoted after the financial crisis of 2008–2009—have almost run their course.

This leaves consumption as the principal driver of future growth. This is not to deny that consumption has increased significantly but its contribution to GDP increased only by around 2 percent between 2009 and 2019.

This did represent about one-quarter of global consumption growth. The fact that the current reform priorities differ little from those proposed by Hu and Wen in 2002–2003 reveals how difficult it is to engineer such a fundamental shift.

A longer-term challenge will be whether the temporary break in global supply chains causes international businesses to look elsewhere for future production.

The China market will remain attractive to foreign businesses, but concerns have been raised about overreliance on production of key goods such as medical supplies.

The Challenge of Governance

A major problem for the CCP is that it is difficult, perhaps impossible, to open a national dialogue about what kind of society the people want. Many fear that removal of the CCP would be destabilizing, a view promoted by the party.

Although the number of protests has increased and the party pays special attention to such threats, the CCP has been the most vulnerable when the elite has fallen out, not when it has been threatened by pressures from below. This was the case both before 1949 and subsequently during the Cultural Revolution and during the divisions over how to deal with the student-led demonstrations of 1989.

Hence, Xi Jinping stresses party unity and loyalty above all. An unforeseen crisis such as serious divisions within the elite over?the future development strategy or an economic meltdown could erode the CCP’s capacity to maintain order. Despite its strong demeanor, the party and its structures are factional and therefore subject to rapid breakdown.

The recentralization of power under Xi and the attempts to eradicate Western thought and unconventional ideas certainly indicate that these are far more widespread than the party admits, and the party clearly fears their influence.