Platt Perspective on Business and Technology

China in transition 1 – balancing hope and expectations

Posted in macroeconomics by Timothy Platt on March 27, 2012

ThePeople’s Republic of China is facing an impending change in leadership that has as much potential for significance as any change that China has gone through in its modern history. I write that noting the irony in how such claims are so often made simply as a matter of hyperbole. But this is one of those few occasions when such a statement is in fact valid. China is at a crossroads and it is facing a major shift in who is to make the day to day and long-term decisions in resolving that.

I have been posting on an ongoing basis in this blog about the challenges that China faces, and about how its policies have both addressed, and in some respects contributed to those problems (see my series The China Conundrum and its Implications for International Cyber-Security, available at Ubiquitous Computing and Communications – everywhere all the time as postings 69 and loosely following with 24 installments.) I have also written about this from a macroeconomics perspective and in that I cite my recently completed series China and Our Increasingly Interconnected Global Economy (see Macroeconomics and Business, postings 48, 52, 56, 59 and 61 for Parts 1-5.)

In late 2012 and continuing on into 2013 for complete transfer of titles and power, seven of the nine members of China’s Politburo Standing Committee will step down having reached maximum age of service, to be replaced by new and younger faces. This same age-based retirement process will bring in significant levels of change to China’s Politburo as a whole, and it will in fact harbinger change through national, regional and provincial, and local levels of Party leadership and government. And this wave of change will radiate down from the very top with Hu Jintao scheduled to step down from his positions of power:

• Ranking member of the Politburo Standing Committee of the Communist Party of China,
• General Secretary of the Communist Party of China (since 2002),
• President of the People’s Republic of China (since 2003) and
• Chairman of the Central Military Commission (since 2004.)

Xi Jinping, until recently:

• Sixth in rank in the Standing Committee,
• Top-ranking member of the Secretariat of the Communist Party of China,
• Vice President of the People’s Republic of China,
• Vice-Chairman of the Central Military Commission, and
• President of the Central Party School.

appears by all indicators to be heir apparent, with his ascension to supreme leadership authority expected to formally begin in November, 2012 with his assuming the position of Party General Secretary. Other titles would follow and some immediately.

• This is where the hope and expectations invoked in the title to this posting enter this story. And I add that prospects of his assentation to power bring thoughts of hope to many perspectives.

From a perspective of conservative stability and of lifelong and even historical involvement and reliability in China’s Communist Party and in its government and system of governance, Xi Jinping can be considered a fifth generation follower of the revolution and keeper of the flame, with family ties going back to Mao Zedong and his earliest struggles, and to the earlier struggles that led up to Mao as well. His father, Xi Zhongxun was a close friend and ally of Mao. He first joined the Communist Youth League of China in 1926 and the Communist Party of China as a full member in 1928. Xi Zhongxun advanced through the ranks and came to play a significant role in helping lead the Communist forces to victory during China’s civil war, helping establish the People’s Republic of China. And he was rewarded for his skills and for his dedicated loyalty, rising to the rank of Vice Premier under Mao’s leadership.

Xi Jinping himself grew up in this system and began actively contributing his skills and energy to its causes at an early age too, actively establishing himself as a reliable member of the Party and of China’s system of government – and even when his own father was repudiated and purged as happened when Jinping was just ten years of age – at the height of the Cultural Revolution. His father was rehabilitated and returned to the Party and its leadership, going on to become Governor of Guangdong Province from 1979 to 1981. But meanwhile, Xi Jinping had established himself and built a life and a career in the Party and system on his own and even when family connections would be more problematical than advantageous to his own career and advancement.

With his family background in Party and Government, Xi Jinping is identified, and with some justification as being of China’s Crown Prince Party – with its positive and negative connotations – but if he is a member of that Crown Price Party he is one who has proven himself on his own as being worthy of advancement and leadership so the sting of any negative connotations of preferential treatment and advancement would not stick. Claims that he had only traded on nepotism would not apply.

I have only briefly sketched a few of the details of Xi Jinping’s biography here and of that of his father and recommend further reading as both of their stories are going to become very important to understand if we are to understand what comes next. But for purposes of this posting, my goal is to establish that Xi Jinping can be seen as a source of conservative and reliable strength based on personal and family history ties to China’s Party and Government and to both China’s past and its ongoing success. But I turn back to a detail that I mentioned above and to how the father, Xi Zhongxun was cast into shadow. And that brings me to a very different source of hope that many see in Xi Jinping and his ascension to power – the prospect that he might lead new efforts of reform. And I ground this part of my discussion in the story of his father too.

Xi Zhongxun was purged from the Party in 1962 for supporting publication of a book deemed critical of Chairman Mao Zedong. His sin was in challenging the cult of personality that had developed around Mao, all but elevating him as if a deity. Xi was persecuted by Mao’s right hand man, Kang Sheng – chief architect of China’s security and intelligence apparatus at the height of the Cultural Revolution in the late 1960’s and was imprisoned, largely under house arrest for the next 16 years up to his release and rehabilitation in 1978. This took place under the reform leadership of Deng Xiaoping and at the time of the Gang of Four trials when the excesses of the Cultural Revolution and of Kang Sheng as a named participant in them were challenged and repudiated.

Tellingly, and very important to this narrative, this 16 year ordeal did not silence Xi Zhongxun or his reform zeal. He worked with Deng in planning out and enabling his economic reforms and was in fact directly responsible for the development and formation of China’s special economic zones, still so important to China and its burgeoning industries and economy. He mentored future leaders including Hu Jintao. But he also looked beyond simple economic reform, realizing that it could not work on a long-term sustaining basis if envisioned and enacted as if in a vacuum. He went on to speak out in denunciation of the government’s response to the Tiananmen Square protests of 1989 with the repression that followed, and against the implementation of the Golden Shield Project and the emergence of a centrally mandated policy of internet censorship in China.

And Xi Jinping is judged by those who hope for reform from the foundation for enabling it that his father sought to build, and at least as much as from his own actions, decisions and personal history.

• Both sources of hope and expectation that I have written of here in this posting run strong and deep.

And I will pick up on this narrative in my next series installment, there turning back to the list of potential areas of reform and change that I offered when writing my last posting, Part 5 of my series China and Our Increasingly Interconnected Global Economy. Some of the points I raised there, and I particularly cite entries such as end the Golden Shield Project and address government corruption would most likely have been favored by his father. But it is Xi Jinping and not his father who will ascend to power later this year, 2012. Meanwhile, you can find this posting and related at Macroeconomics and Business and also see Ubiquitous Computing and Communications – everywhere all the time.

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