Economy, Talking Point

The eyes have it

China looks on, as nation’s top political body is selected at last

The eyes have it

Passed the screen test: China’s leader-in-waiting is waiting no longer

Talk less about the spectacle and more about the spectacles. That was the strategy for one eagle-eyed analyst at China’s leadership handover last week, as the seven members of the new Standing Committee – the country’s top political body – faced the world’s media for the first time.

As hundreds of other Sinologists picked over the bones of the once-in-a-decade transition in Beijing, Nels Frye told Foreign Policy magazine that even the eyewear on show sent a message.

Forget the huge, nerdy glasses favoured in the past by former heavyweights like Li Peng or Wu Bangguo, or even the tortoise-shell monsters worn by former president Jiang Zemin. China’s new leadership was much more contemporary in its choices, Frye suggested, in opting for contact lenses or smaller, less conspicuous frames.

But the other implication was that none of the group wanted to stand out too distinctively. And this also applied to their suits, Frye thought. Single-breasted, two-button and dark blue. The visual message, he added, was that these seven men were “all the more determined to show unity, continuity and a commitment to stability”.

Almost as if they had read this assessment, Hu Jintao and Xi Jinping then opted for more traditional garb last Sunday, in a meeting with the military top brass (heavily retro, sporting Mao-style outfits). But apart from the sartorial style, what else is being said about the new team tasked with changing China?

Xi Jinping moves centre stage as expected…

Xi’s first speech as general secretary of the Chinese Communist Party (he won’t become state president until March next year) went down well in the weibo world. Netizens sat up and noticed that Xi apologised for arriving 45 minutes late, they appreciated the straightforward style of his delivery, and they liked the fact that he mentioned “the people” more often than “the Party” in his remarks.

“It is the people who have created history,” Xi had proclaimed, “and it is the people who are true heroes. The people are the source of our strength.”

“The speech was very positive, very cordial and very real. It had little historical baggage and no mention of Marxist-Leninism or Mao Zedong Thought… For political terminology Xi only used ‘socialism with Chinese characteristics’ and there were no empty or grandiose phrases,” Qian Gang, a Hong Kong academic, told Caijing magazine. The international media agreed, although few could resist pointing out that Xi could hardly do worse than the wooden performances of his predecessor, Hu Jintao. “Xi didn’t need soaring rhetoric to impress – moving from a robot to a human was sufficiently distinctive,” sniffed Damien Ma at The Atlantic.

And the rest of Xi’s team?

Also as expected, Li Keqiang stood on the number two spot on the podium. Analysts say this makes it all but certain he’ll replace Wen Jiabao as premier next March. More of a surprise is that Li is the only Standing Committee member associated unequivocally with the tuanpai or Communist Youth League faction, of which Hu Jintao and Wen Jiabao were prominent members.

The remaining six are drawn either from the ‘princeling’ camp (made up of the sons of former revolutionary leaders) or from those closely linked to former president Jiang Zemin (and often referred to colloquially as the Shanghai Gang).

That led to speculation that the new leadership is going to be more conservative than anticipated, especially as two senior figures usually thought to be more open to reform – Wang Yang, the Party secretary of Guangdong, and Li Yuanchao, the Party’s personnel chief – both failed to make it onto the Standing Committee.

In fact, Reuters has reported this week that both men looked like being promoted to top roles until shortly before the Congress, when a series of votes among the 24 outgoing members of the Politburo and at least 10 retired Party officials blocked their progress. According to the report, Wang was dropped to avoid further embittering pro-Mao elements already angered by the fall of Bo Xilai, while Li was dumped for annoying Party elders by promoting too many of Hu Jintao’s allies in the past, and ignoring the recommendations for their own preferred candidates. In contrast, some of those who did make the grade last week, including Liu Yunshan, with a dutiful background in Party propaganda, and Zhang Dejiang, a graduate in economics from Kim Il-sung University in North Korea, are said to be much more cautious in their reformist instincts.

So it’s a setback for the reform agenda?

As we’ve suggested previously in WiC, descriptions of ‘conservatives’ or ‘reformers’ in Chinese politics can depend on the issue in question rather than suggesting a general worldview. The picture is confused further by the web of patronage and obligation underpinning the careers of all those who manage to reach the summit of Chinese politics.

But Wang Xiangwei, editor-in-chief at the South China Morning Post, has also suggested that equating the tuanpai, or those of a similar outlook to Hu Jintao, with a reformist agenda isn’t an easy case to make. After all, Hu’s period in office is already being classed as a “lost decade” because of its lack of meaningful political and economic change. Wang also says that Xi Jinping might prove to be more of a reformer than expected, especially with the backing of a streamlined Standing Committee (which was reduced from nine to seven members). The theory is that the smaller team has a better chance of grappling with China’s wider challenges, and that Xi might be able to provide stronger leadership than Hu following the fracturing of some of the factional gridlock.

But onlookers like Cheng Li at the Brooking Institution in Washington wonder if this is really how events are going to play out. Previously, the two main factions have had to work together to govern effectively, Li says. They also offered a blend of expertise and experience, representing different socio-economic classes and geographic regions. If this balance is lost – given the tuanpai faction looks to be more weakly represented – who is to say that the mood won’t turn a lot less cooperative? Li even argues that could unleash a new power struggle and prove a threat to stability.

Where might we see more immediate signs of change?

Two main areas have come in for most debate. The first is economic reform, where calls are getting louder for a rebalancing of the economy away from the state-owned enterprises towards the private sector, and a switch towards more reliance on household consumption for growth, rather than state-led investment.

China watchers will now have to wait to see if Xi’s administration is capable of driving through the reform agenda. Certainly, it’s fair to classify the princeling grouping as pro-business in its outlook. But the counter argument is that most of the princelings have long favoured a central role for the state-owned enterprises in the economy. In many cases, they also have relatives who have prospered working in key state-dominated sectors, like energy, finance and telecommunications. Perhaps this will make them less willing to disturb the status quo, meaning that any effort to roll back the influence of the state giants in favour of a more vibrant private sector will proceed slowly, at best.

The second area being given focus is the battle against graft, where Xi Jinping has already issued a series of rallying cries in recent days, including a warning to colleagues last weekend that corruption will “inevitably doom the Party and the state” if it continues to run unchecked.

Of course, such utterances are nothing new – similar warnings have been issued since Mao first addressed the subject in the 1950s. But the appointment last week of another Standing Committee member, Wang Qishan, as head of the Central Commission for Discipline Inspection (CCDI) is being hailed as a sign that the new leadership is ready to step up the fight.

Wang, who has a reputation as a troubleshooter, is the highest-ranking figure yet to lead the anti-corruption effort and worked with former premier Zhu Rongji on a series of graft-busting sweeps 15 years ago, including the campaign that saw Xiamen tycoon Lai Changxing flee into exile (see WiC117).

Could Wang’s new assignment mean that Beijing is getting more serious about clamping down on the worst cases of graft? Some analysts think so, pointing out that the previous management at the CCDI has been cleared out, indicating the leadership’s displeasure with its performance.

But again, there are countervailing views. One is that a single individual – even someone as capable as Wang – will struggle to have an impact on what is clearly a systemic problem.

Another rumour is that Wang – who has a respected track record in overseeing economic reform, and whom many think is better suited to a portfolio in that area – was only shunted into the anti-corruption role as a concession to the tuanpai, so as not to overshadow the new premier, Li Keqiang.

There are more hints of factional intrigue, too. Another rumour is that Wang got the anti-corruption role because he demurred on a higher ranking position that might have led to having to defer to Li more often.

And off stage, the intrigue continues too?

Much of the political chatter has surrounded two men who weren’t even up for Standing Committee selection. One of them, former president Jiang Zemin, is widely seen to have acted as kingmaker in the final days of choosing the current elite. At 86, Jiang can’t even claim to be the longest-living Party elder at the Congress (that honour goes to Song Ping, who is 95). But Jiang shows few signs of running out of political puff, getting three of his protégés into top spots (Xi, Zhang Dejiang and Liu Yunshan).

In contrast, Hu got just one of his direct allies, Li Keqiang, onto the roster and his decision to stand down immediately as chairman of the Central Military Commission or CMC (in effect, as the head of the armed forces) is also being seen as evidence of a man leaving the scene quickly after a setback.

Another view is that Hu’s readiness to hand back his military role is designed to establish a precedent for China’s power handover, even at the expense of his personal ambitions. Certainly, it contrasts with Jiang’s decision to hold onto the chairmanship role for two years into Hu’s own term of office.

“This means that Hu Jintao won’t be looking over Xi Jinping’s shoulders, he has totally retired. Hu’s intention behind this, if he totally retires, is that all the other retired people will not interfere. That’s very important,” Frank Ching, an associate professor at Hong Kong University of Science and Technology, told CNBC.

But others believe that the only reason that Hu is stepping back is because he has already installed his own loyalists into senior CMC roles, and so has less need to be present directly himself. Of course, this would also imply that too much is being read into Hu’s apparently abrupt departure and that he has no intention of leaving the political scene. With five of the seven Standing Committee members already close to mandatory retirement age, only Xi Jinping and Li Keqiang will be entitled to serve a second term in five years time, which means another round of horse-trading for Standing Committee selection in the lead up to 2017. So could Hu’s current withdrawal be strategic, with an eye on getting more of his own men into high office next time around? Of course, that might be a little easier to achieve if Jiang Zemin is no longer around to resist.

Either way, having two predecessors still active on the political scene means that the incoming Xi will have to tread carefully, says Lian Peng, a columnist at Phoenix Weekly. “Xi is like a new daughter-in-law who marries into a large family of three generations living under one roof,” Lian warned on weibo last week. “He has to deal with both his mother-in-law and his mother-in-law’s mother-in-law. What a complicated domestic affair!”

Now to the task ahead…

Putting the conjecture to one side and preparing itself for the years ahead, the new Standing Committee now faces some daunting challenges. Few wouldn’t wish it luck with the myriad of social, economic and political issues that it will soon have to address. Expectations from the public are high, too, with Liu Shengjun, a columnist for Caixin Media, one of a number of weibo contributors to outline their own hopes for change.

Some of the items on Liu’s wish list were more practical, while others were sweeping and substantive. “I have 10 wishes for the next decade,” he wrote. “1. I do not have to go overseas to buy infant milk formula. 2. I can buy safe food in supermarkets. 3. White-collar workers are no longer reduced to becoming mortgage slaves. 4. Environmental pollution stops getting worse. 5. The gap between rich and poor stops widening. 6. Entrepreneurs no longer choose to emigrate. 7. There are no more ‘naked’ [corrupt] officials. 8. The stock market changes from a money-laundering machine to a place of value creation. 9. People no longer pay attention to ‘family background’. And 10. That state power is wielded within the rule of law.”

So what happens next?

Harvard professor and China historian Roderick MacFarquhar told audiences in Hong Kong recently that he thought the new Standing Committee would “muddle through” rather than pursue a more dramatic reform agenda. But if he is wrong, and Xi proves himself more committed to meaningful reforms, one important voice on the committee could prove to be Yu Zhengsheng.

The former Party secretary of Shanghai is an interesting character. As readers of WiC will recall, in June last year he gave an unusual speech at Jiaotong University and then took questions from students – a rare act for an official of Yu’s rank, and one which, in itself, is quite revealing (see WiC113).

At the time, the hot topic was the emergence of so-called ‘independent candidates’ – prominent people who were using their large Sina Weibo followings to lobby for the right to be selected for China’s parliament, the National People’s Congress.

Asked what he thought of this, Yu said it shouldn’t be dismissed outright, saying that “recommendation by the masses cannot be considered an abnormal phenomenon”. Yu even said that he had encouraged Qianjiang’s Party secretary to support the addition of Yao Lifa, an independent candidate, to the ballot.

For those even vaguely optimistic that substantive reform is possible in China, this is a remark that bears pondering…

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