Platt Perspective on Business and Technology

China and its transition imperatives 14: Xi Jinping’s emerging resolution to the challenge of leadership 2

Posted in macroeconomics by Timothy Platt on January 6, 2015

This is my 16th installment to a new series on China and its recent Party and government leadership transition, looking back over the past year and more since that formally and officially took place and to now and China’s current situation, and forward. See Macroeconomics and Business, postings 154 and loosely following for Parts 1-12 and for a supplemental posting: Part 12.5. And see Page 2 to that directory for a second, continuation supplement Part 12.6 and for Part 13.)

At the end of Part 13 I offered a brief bullet point list of issues that merit further discussion as a next step in explicating Xi Jinping’s emerging leadership of China, which I repeat here with some minor rewording for clarity out of its original context, and as a starting point for this posting:

• The new and still emerging pattern of how Xi Jinping seeks to lead China, only really comes into focus when you consider how he has shaped and pursued his business and economic agenda and both within China and in dealing with international businesses and markets,
• Coupled with the way that he has decided to project military strength and both regionally and globally, in claiming wider hegemony over the South and East China Seas and in presenting his country as a globally reaching military power.
• In this, under Xi’s rule elements of the People’s Liberation Army Navy have begun actively engaging with countries such as Iran through joint military exercises as a show of their increasingly global reach and influence. And more locally I would cite how China’s growing naval capabilities have been deployed as a direct challenge to neighboring countries (e.g. by sending military vessels into disputed waters in the South and East China Seas to reinforce China’s claim to hegemony over them.)

And I went on from there to state that I would continue Part 13’s narrative here by also discussing how:

• Xi’s new government has both more actively sought to develop and deploy cyber-surveillance and cyber-espionage capabilities, globally, and how his government has sought to strengthen their Golden Shield Project – their Great Firewall of China to more fully control the internal conversation within China.
• And I stated that I would also discuss how a newly emerging Xi doctrine would seek to influence at the very least, the external-to-China conversation too, and certainly insofar as it is about China.

I will do that, but from the perspective of still unfolding events that had not begun when I initially wrote Part 13 but that will shape all that Xi is able to achieve: the first real push-back that he and his government have faced, as coming from Hong Kong and its pro-democracy demonstrators. I write and upload my postings way in advance of their going live, and usually post on matters that would not be reshaped by suddenly emerging news events. That applies to my ongoing discussions of China, its actions and its policies too. But then after writing and uploading Part 13 and before it went live to this blog, I inserted my two supplemental postings on Hong Kong.

• China has started to dramatically increasingly pursue legal action against foreign owned businesses in China as a tool for limiting their power and influence, and for increasing the realizable competitive position of Chinese owned businesses, and particularly of government own businesses, and privately held businesses that are owned by China’s politically well-connected.
• China has actively claimed ownership of disputed territorial waters. And as one of many possible examples that I could cite here of that, I note the highly publicized dispute that China is carrying out with Japan over ownership to what are called the Senkaku Islands in Japan, and the Diaoyu Islands in China, and with control over off-shore fishing and mineral resources at stake there. As a second and perhaps more troubling example, I would cite their recent disputes with Vietnam over oil rights in coastal waters right off Vietnam’s shores (see, for example this news piece from the BBC News: China Moves Vietnam Row Oil Rig.) China did withdraw the oil rig that it set up off of the Paracel_Islands, which China now claims under the name Xisha Islands, but they have publically stated that they only did so because this rig was being used for preliminary oil exploration purposes only and that they have a sovereign right to go right back in with production rigs too. And they do this at a time when they are also actively wooing Vietnam with business development opportunities that would be intended to bring this neighboring country more fully into their sphere of influence. China, I add, actively enforces its off-shore territorial claims with shows of military force, as a display of the stick side to their carrot and stick approach to diplomacy.

This all represents their outwardly-facing policy and practices, or at least select facets of their overall foreign policy and how it is implemented. The emerging pro-democracy uprising in Hong Kong, as briefly and selectively discussed in my Part 12.5 and 12.6 supplemental postings, present challenge to China’s system of governance and to its new leader from the inside, and as I noted in Part 12.6, in ways that have potential impact that go way beyond Hong Kong per se, potentially leading to unrest in several and even many regions within their diverse nation.

I stated at the end of Part 13 that I would discuss Xi’s emerging cyber and social media policies and I will do so. But before delving into those issues and to lay some groundwork for that discussion, I am going to more directly address how unrest in Hong Kong might shape and even limit Xi Jinping’s efforts to assume the level of personal power over his Party, government and people that he seems to be pursuing, as stated in Part 13. And to clarify that, I repeat from Part 13, my assertions that:

• Xi does not just seek to modify or reinterpret Mao Zedong’s legacy and he is not even content to simply trim back certain of its excesses and inefficiencies as was for notable example, attempted by Deng Xiaoping and his school of reformers.
• Xi Jinping seeks to supplant Mao as China’s ultimate arbiter and definer of right and wrong and of good for his country. He seeks to become a new Mao Zedong: a new Great Leader and Great Helmsman, in his case leading China out of and away from the original Mao and his teachings just as Mao himself led China away from its imperial past and into his vision of Communism.

He is still early on in his first term of office as China’s preeminent leader. If he is seen to be weak, by the Party faithful who make Chinese Communism run and who carry out and enforce its will, how much leverage can he retain with rank and file local and provincial Party leaders going forward in challenging any significant aspects of the Chinese Communist Party’s status quo?

If he cannot find a way to rein in the pro-democracy protests in Hong Kong, and particularly if even a hint of this unrest is seen to have traveled to other parts of China (e.g. emboldening their already active Ujghur or Tibetan separatists), how much support can he expect to receive from his government or military if he seeks to consolidate power over them, around himself?

• Here, any backing down on Xi’s part might be construed as representing weakness, and particularly on the issue of who can run for senior elected office in as visibly important a place as Hong Kong.
• If Xi and his government are seen as allowing (or as being forced to allow) a candidate for governmental leadership there to run for office who is likely to win and who would just as likely be in disagreement with Beijing policy and on many issues, that would be seen as weakness and as betrayal.
• But what would happen if the Beijing government were to move into Hong Kong with any force to shut down these protests, to keep that from happening and either in fact or even just in appearance?

I have already at least intimated at an answer to that question at the end of Part 12.6 when I noted that a show of force in Hong Kong, and even one that did not even come close to what happened in Tiananmen Square in June, 1989, would have devastating impact on all of China’s efforts to join the global community as a nation of positive influence and power.

Reaction to the Tiananmen Square massacre of June 4, 1989 immediately ended China’s up until then successful charm offensive, and its attempt to become a global partner and leader in the community of nations – and for many years.

• The China of today is so much more globally connected now, and both through their government and through their growing private sector,
• And their own people are so much more globally connected and aware than they were in 1989,
• That even a sketchy outline of key possible points of impact and damage to their country and its economy from any perceived repeat of that would be lengthy enough to merit an entire series in and of itself.

And this, and particularly my point there of how Chinese citizens are more connected and communicating, brings me to the end of this posting, and to a starting point for my next series installment, where I will address what could perhaps be seen as China’s preemptive and proactive damage control, with a marked strengthening of its Golden Shield Project – its Great Firewall of China, and its expanding outwardly facing cyber policy and practice.

I will at least begin to discuss these complex sets of issues, and Xi’s use of online social media and other emerging channels for conveying and shaping his message. Then after posting on those issues, I will challenge some of the basic status quo assumptions that I too, have been making about China up to here, and both in this series and in preceding ones. In anticipation of that, I note that China is changing and in ways that even its more diehard Party faithful see as necessary, but also in ways that present an existential threat to Party and to one Party rule: a rising entrepreneurial and free market oriented generation that is raising their children to take this for granted. I will discuss this next, and how it challenges the very fundamentals as to what leadership means in China, and what it can mean in the years to come.

Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation. (And given the pace of change in all of this, I add here that I write and upload this posting on October 25, 2014, so I may very well be adding in an additional supplemental posting between now and January, 2015, add an updating appending note to the end of this posting, or both.)

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