Two Commentaries, Two Visions, No One Way Forward

There’s been a lot of discussion lately about China’s growing economic challenges and what two clearly authoritative commentaries that appeared in People’s Daily—one here and also a January speech by President Xi Jinping that finally appeared here—actually mean for those problems. 

For many analysts, these twin events signal deeper dissension in Beijing, and yet another sign of crisis for the country.  In short, the usual themes of “China is at the crossroads”; “China’s approaching a crisis”; “the Chinese collapse is around the corner”, “economic forces that are about to burst forth and bury the Chinese government”; or some such unhappy tidings and predictions. 

The common thread in all of these forecasts seems to be, as ever, that “China can’t hold on much longer”.

Except China always does.  Beijing either solves the problem—somehow—or keeps getting away with not doing so.  The reckoning that so many talk about seems to get postponed, or really wasn’t a reckoning to begin with.

Leaving aside for the moment why that’s been the case (as well as why those predicting doom for China are like meteorologists on meth and never held accountable for their missed forecasts), what’s happening here?

The appearance of the summary and Xi’s speech are noteworthy, to be sure. 

But they’re not purveyors of good or bad economic news in themselves, so much as another chapter in the larger political challenge of getting Chinese officials to make up their mind which policies—and which person—to support, and what happens when they don’t. 

That both the commentary and Xi’s speech were featured on successive days in People’s Daily is evidence that there’s a high-level debate in China about what’s wrong with the economy.  The challenges that are identified in the pages of People’s Daily (as well as its website) are always ones that leading Communist party members think need attention.  After all, the newspaper is a codebook for cadres--for party officials to dispense information and to establish direction, as well as seek feedback.  Cadres dissect the paper (and increasingly its website) for clues about discussions, debates, and directions in policy.  (When they’d fail to do so, they’re chastised.)  Therefore, printing and positioning both of the pieces noted above with such prominence is significant because it’s a well-defined attempt by the leadership to highlight their current thinking about China’s economic problems.

While the two pieces can be thought of as a set, it’s more useful to unpack them. 

The “authoritative commentary” that graced the front-page of People’s Daily and occupied the entire second page in this past Monday’s edition is a laundry list of the low-lights of China’s economic performance.  It’s very much a summary--representing the current consensus in Beijing that what worked for China before isn’t working so well now.  The commentary captures the current condition of China’s economy affairs, which is clearly not very good or very promising.  But while the piece outlines the parameters and the goals of economic policy, it doesn't specify remedies. 

Xi’s speech is a very different document.  The speech is really a dissertation of China’s economic development and the progress made by other countries by which Beijing has often measured itself (parts of which are clearly drafted by advisors, probably from outside).  The speech is also an attempt by Xi to describe how China got to where it is presently, an effort to explain his own thinking about China’s options. 

At the same time, the tone of Xi’s speech (or talk or presentation—it’s not entirely clear what, and some of it reads like a pastiche) is rather wary--of explaining why certain decisions were made and describing where matters are now.  Indeed, the document reads as somewhat self-justifying; as if Xi has been asked to defend why China’s economic circumstances are where they are and what they are presently.   

And thus we get to the part about why these “authoritative commentaries” are ultimately about politics.

Xi probably adopted this protective posture because he’s not been at all comfortable talking about economic matters, except in the most general terms.  For economics and finance are really Premier Li Keqiang’s realm, and there’s already tension between Xi and Li (actually, for some time now) because while Xi and Li aren’t in a struggle for power (both already have power), they are competing intensely over who offers the better solution for China. 

There’s Xi’s vision, which prescribes ideology as the cure and reconnecting the Chinese State to the Chinese Society through party reform.

Then there’s Li’s notion, which insists that the government’s ability to rule rests largely on Beijing’s successful management of the economy. 

This tension isn’t a partition of responsibilities as it was under Xi’s and Li’s predecessors, but a real divide which many officials—national and local--have been suffering with for a while now.

It’s becoming very tough for bureaucrats in Beijing and cadres in provinces and localities to know how to act--what projects to move forward with; which ones being discussed should be abandoned; and whether the anticorruption campaign will continue or finally be called off.  As important as Xi’s crusade against graft had been in caging “tigers” (high-level officials), the uncertainty it created at lower levels often put a stop to local initiatives for fear that cadres there would be labeled as corrupt “flies”. 

So when local officials look at Beijing and see Xi focusing on political discipline and loyalty, while Li is emphasizing administrative efficiency and fiscal reform, they’re confused at what they themselves are supposed to be doing.  The result of this political divide between Xi and Li is a stubborn paralysis in local policymaking. 

What’s needed isn’t so much another economic stimulus package, but a political jumpstart.  The only way to achieve that outcome is for either Xi or Li to win the argument.  But, right now at least, China and its cadres are left with two documents, articulating two different descriptions, and each side looking to solicit the views of officials in an effort to break the policy impasse.  There’s no clear winner and no well-defined way forward, at least where economic reform is concerned.

The Only-Too-Powerful Establishment Narrative About Chinese Politics

The core assumption held by many Western analysts about China is that it will democratize--eventually.  That supposition also argues that to produce democracy in China, it’s necessary for China to reform in such a way economically that it will open its markets and manufacturing to foreign powers.

The vast majority of Western analysts have bought into this notion and passed it on to audiences in classrooms and elsewhere for decades.  The supposition is really the successor to “China, the Sick Man of Asia” notion:  that China and the Chinese people cannot manage on their own, and what’s needed is a healthy dose of religion—both theological (Christianity) and ideological (democracy).  It follows that Chinese leaders will come to their senses--and if they don’t, they risk the wrath of Chinese subjects, who really want to become citizens if only Beijing would get out of their way.  Trying to stop change from without will ignite social fires from below, the arguments goes, and Chinese elites are enlightened enough to gradually yield to inexorable forces from outside and within. 

Alongside this conception is the assumption that Chinese leaders fight for power, not policy; that policy differences are simply smoke to hide struggles for domination.  Chinese elites, on the rare occasions when they are not presented as monolithic, are nonetheless presented as zero-sum power seekers—not officials who believe strongly and deeply about their nation and who actively debate and decide on policy.   

These basic tenets of China’s purported capacity to change have dominated thinking and teaching about Chinese politics and economics for decades.  This Establishment Narrative about China is that China is changing—incrementally perhaps, but inevitably.  One must have patience, and acknowledge the evidence of these small shifts that will one day turn seismic.  Chinese leaders may get sidetracked, but they want and need reform on terms that are familiar to Western readers:  openness, transparency, accountability and democracy.   

At least where economic practice is concerned, the Establishment Narrative has meant that companies and their consultants point to the positive, and eschew the political.  Of course, there will be setbacks, these agents of outside change concede; but the overall trajectory is for financial reforms, market openness, greater transparency, and Chinese decision-makers looking to integrate China into the global economy.  After all, these corporate executives and their advisers insist, Beijing understands that government legitimacy rests overwhelmingly on a robust economy.  When there’s not much progress, the argument for “patience with Beijing because it’s a long and difficult process” gets trotted out.  China will come around, one is told.   

The problem is that the Establishment Narrative isn’t holding up—indeed, it hasn't for some time. 

One major reason is that it’s really a projection of Western perspectives and values onto Chinese leaderships that have their own world-view.  Chinese elites are very rarely asked what they themselves see as sustaining the Communist party’s hold on power and authority.  The Establishment Narrative narrates its own story, rather than allowing Chinese officials to tell their own tale.  If they were asked—directly or through close attention to their writings—the picture painted of China would be rather different. 

For example, many Chinese elites see successful economic management as fundamental to maintaining social authority.  But there are more than a few officials see economic stewardship as necessary but insufficient where governance in general is concerned.  They see a modern economy as producing post-modern social problems:  an apathetic populace who either migrates or emigrates, without little attention to residence regulations or patriotism; rent-seeking elites who behave badly; and a system where infrastructure is easier to build than trust in the government. 

Indeed, a growing number of Chinese cadres see a strong economy as less central to Communist party legitimacy than an expanding capacity to supervise and guide society.   As good Marxists, they believe that economics does drive politics and society.  But for many of these officials, loosening control over the economy threatens to undermine the ties between the Communist party and the Chinese public.  In their view, economic growth has also grown the income gap and carved a deeper and wider abyss between the government and the governed.   

So, either Beijing has to find new ways of managing its citizens, or it needs to re-tighten and re-centralize its control of the economy.  Reform in that respect means conservative reform—reasserting power instead of allowing it to disperse into something that might form into a sustainable civil society.  There are anxieties in the party ranks and among intellectual advisers that what happened to the Soviet Union and East European regimes could occur in China, but far less than many Western scholars assume there to be—another instance of projection, incidentally. 

By paying attention to what Chinese leaders and elites actually say, one will quickly see that there’s diversity in the Chinese political world-view, and that (at least since 1989), Marxist fundamentalists (or Leftists) have been a dominant force in contemporary Chinese political thinking.  These forces—not human rights activists or dissidents—have had an enormous impact on the nature and process of Chinese policy in the past two decades. 

It’s important to note that the politically conservative or Marxist fundamentalist impulse in Chinese politics hasn’t gone unnoticed by those scholars outside China who have examined Chinese political writings and have seen the absence of political reform in the classic Western sense.  But the Establishment Narrative of a China committed to reform in the Western sense—progress through a dismantling of the State from enlightened officials within or by those discontented below—is the dominant theme in analytic and academic circles.  Those few analysts who detect signs that these tendencies aren’t happening, the sponsors of The Narrative insist, aren’t looking hard enough, or get portrayed as lacking the skills to discern “what’s actually going on in China”.  Challenge The Narrative hard enough and you’re labeled as someone who doesn't understand China, with all the attendant professional and social consequences that come with that sticker:  conferences are composed of those for whom The Narrative is gospel; fellowships are often dispensed to those who have read this story as scripture; and social networks become self-supporting, self-fulfilling prophecies.  Disagreement with the conventional wisdom is usually a career-killer, and so those who saw the rise of Party fundamentalists who might well dominate Chinese policymaking were ignored and sometimes condemned. 

So, when Xi Jinping arrived on the scene and found traction—even public adulation and strong resonance in the Chinese political apparatus—there was bewilderment, and a widespread reluctance to take Xi on his own terms.  That’s largely because Xi and the strategies he adopted to recentralize power and authority is a direct contradiction to the Establishment Narrative of a China eager to conform to Western expectations. 

There’s nothing conventional about Xi Jinping, as he continues to disrupt and dismantle what’s become far too comfortable for far too many in China.  It would be useful if the Establishment Narrative about China and Chinese leaders got demolished along the way as well. 

Will The Real Xi Please Stand Up?

It’s difficult for some to know how to see President Xi Jinping these days. 

One day, he seems to be calling for the need for dissenting voices in the Communist party, and for the counsel of intellectuals to be heard and possibly heeded, even when that advice might not necessarily correspond with the current direction of policy. 

Another day, Xi rails against those within the party who he claims praise capitalism and denigrate socialism, demanding loyalty and discipline, not dialogue with those who may hold different views. 

Will The Real Xi please stand up?

In fact, this is The Real Xi:  a leader preaching salvation through ideology instead of economics; someone who sees party reform as the best and more reliable sort of political reform; and a national manager who believes that while his predecessors were transitional figures for their times, China now needs someone who will be transformational.

In short, The Real Xi is a real leader with real challenges.   

There are two major considerations in that respect.

First, that Xi faces resistance, though not outright organized opposition to his agenda.  It’s not been easy for his visits and speeches to get front-page play in a timely and consistent fashion—one reason why Xi pressed Communist party media a few months back to actually act like it was part of the Party, and why essays since then continue to stress that point.  For example, the speech referenced above that appeared in the most recent issue of Qiushi took place at a meeting this past December—that is, almost a half year ago.  If Xi is all-powerful, why did a major internal speech take so long to surface?

And there are also a lot of party officials whose personal rice bowls have been broken by Beijing’s anticorruption campaign.  They’re not happy, though many of them have been rendered mute by the same campaign.  They might be angry, but they’re also quarantined. 

But what’s troubling for Xi is that there are at least an equal number of cadres whose careers were created by following the established rules of performance and promotion that existed before Xi came onto the scene.  By hitting out at those who bent the rules in their favor, Xi is undercutting those officials who were good at their jobs, at least as those jobs had been defined before.  That part of the crackdown produces a fair amount of ill will at the upper and middle echelons of government, and creates more than a little indecision at lower levels because cadres aren’t sure what they’re supposed to be doing, only what they’re not. 

And Xi surely knows that’s the downside—which is why he’s been so adamant lately in hitting out at those who would form cliques and factions to oppose his reforms.  Xi isn’t talking about the political environment that he inherited (which is what many observers assume), but the one that he surely realizes that his own efforts have created.  Xi doesn’t like political clans as a rule, but he’s far more concerned with them standing up for the status quo, and therefore in the way of his supporters--supporters who’ve been screaming for social change that’s engineered from above by the Communist party, instead of emerging (or even erupting) from below. 

That’s a tough notion for some outside China to grasp.  That is, that Xi and his allies in the party ranks see their country threatened far more by elements within the party seeking to thwart change, than they fear protests or social upheaval from below. 

What’s actually happening is that Xi and his like-minded comrades want to be in control of the process of changing China, instead of trying to suffocate reform and hope for the best.  That’s why Xi And Friends hit out at anyone who has a different narrative about the type of change China needs to believe in, and do so often with real anger and ardor.  The argument isn’t over what type of reform, but that there should be reform—and to the Communist party at that, not the economy. 

The Real Xi, in other words, is someone who is now moving more carefully, adjusting his strategy to fit the new circumstances that he created.

Which leads to the second consideration: That a major reason why The Real Xi has been so difficult to discern is that Xi Jinping is subverting the narrative of Chinese politics as it’s been taught and passed on by so many Western analysts of Chinese affairs. 

More on that aspect in the next post.

A Fire That Never Really Got Lit

A follow-up to the previous post:  Renmin Ribao today reported on the success of the campaign against “flies” in Guangxi, claiming that “as of March of this year, Guangxi has dealt with the problem of corruption and malpractices against the interests of the masses.” 

According to the report, 6832 officials were investigated for having ‘unhealthy tendencies:  3039 people received punishment; 1518 received verbal warnings; 486 people had their cases referred to judicial organs.”

截至今年3月，广西共查处侵害群众利益的不正之风和腐败问题6832件，处分3039人，诫勉谈话、组织处理1518人，移送司法机关处理486人。 

Some of those investigated were also compelled to reimburse the locality in which their malfeasance occurred. 

The report noted that the investigations began last year—specifically, in September 2015—and therefore precedes the airing of the program that’s discussed in the previous post. 

In other words, the implicit claim was that the province (or even Beijing, through the Central Discipline and Inspection Commission, or CCDI) was looking to the allegations about graft in Nanning before the television event in question. 

It’s not entirely clear what the purpose of this announcement is, and it could simply be a one-off attempt to address a particularly pernicious sort of local corruption in a single place.  At the same time, the report is a sharp signal to officials (and any unconvinced activists) that it's the CCDI that will attend to these challenges; that there’s no need for local programs exposing corruption to act unilaterally.  In other words, Xi’s anticorruption crusade still wants to manage matters from above, and Beijing doesn't like seeing local governments or agents acting on their behalf trying to take the lead from below. 

So, if there was an experiment by some to get back to using television programming to expose graft and cadres behaving badly, that’s now over.