What a difference a year makes. In March 2018, Chinese leader Xi Jinping put an end to presidential term limits in China, thus opening up the possibility of him ruling for life. He appeared all-powerful. Now, however, signs of political stress and internal tensions are emerging.
The guarantee of political and social stability has been at the core of the Chinese Communist Party’s claim to power in the post-Mao Zedong era. Up until recently, collective leadership was key to ensuring that political continuity. However, Xi’s first presidential mandate, culminating in 2017 when he consecrated his new status as “core leader” at the 19th Party Congress, has changed the conditions under which stability is to be attained. The current general secretary of the Chinese Communist Party has centralized decision-making through bureaucratic and military reform and by placing his protégés at the top of the leadership structure. This concentration of power has created important new fragilities in China’s political structure and significant political stress for the ruling party.
Paradoxically, the concentration of power in the figure of Xi Jinping seems to be making it harder, not easier, to manage the growing tensions in Chinese society. In January, he convened an extraordinary meeting with provincial party leaders to warn against political turbulence. The slowing of economic growth could lead to political vulnerability, Xi warned, tasking the minister of public security with cracking down on any sign of protest. This year, the People’s Republic of China is remembering deeply controversial episodes of its young history: the centenary of the May 4th cultural movement, the 30th anniversary of the Tiananmen demonstrations and crackdown, and the 70th anniversary of the foundation of the regime. Xi’s move to summon provincial officials to Beijing for a special briefing about the risks that the party faces during this sensitive year highlight the Chinese leader’s difficulties in consolidating the party under his leadership. The fallout from Xi’s anti-corruption campaign, newly challenging economic conditions and social unrest are exacerbating the fault lines of China’s authoritarian regime, raising the question of whether Xi’s deliberate shift from collective to singular leadership will prove a politically savvy move or a misguided gamble.
Xi’s Ascent and the Mixed Results of the Anti-Corruption Campaign
In contrast to his predecessors, who were chosen by their peers, Xi’s rise as supreme leader has its roots in a scandal that exposed the fragility of China’s political system. In 2012, a few months before Xi took office, his most likely opponent, Chongqing party chief Bo Xilai, was expelled from the Chinese Communist Party after Bo’s lieutenant, Wang Lijun, asked the U.S. consulate in Sichuan province for political asylum. The Bo Xilai crisis reflected a leadership split very similar to the one that led to the crackdown at Tiananmen Square in 1989. Xi’s political power was founded on the elimination of Bo.
The bribery charge against Bo was the prelude to Xi’s signature campaign against corruption, which has lasted seven years and counting. Xi perceived corruption as a direct threat to the party’s continuous hold on power. Yet the extra-judicial nature of the fight against corruption, despite its institutionalization under the Central Commission for Discipline Inspection, has only led to extreme politicization of the issue and increased division inside the party. Outside the party, Xi’s efforts go hand-in-hand with the vigorous repression of minorities and advocacy groups (rights lawyers, NGOs, and labor activists), resistance against foreign influence, and the increased presence of party committees in major companies. Thus, while Xi’s iron fist seems to have squelched opposition in and to the Chinese Communist Party, it has also greatly accentuated friction within the regime.
Economic Policy: Fissures Between Local and Central Government
Another source of tension within the party has to do with the economy. In 2018, China’s economic growth was the lowest it has been in 30 years. The party’s favored tool to deal with growth slowdown is an investment. Today, most state investment goes to high-end technologies. But the massive economic stimulus that the government implemented in response to the 2008 financial crisis generated a 20 percent growth in debt between 2009 and 2015. The bulk of this debt has been corporate debt in inefficient industrial sectors. In 2016, China’s corporate debt was 135 percent of its gross domestic product. The debt issue is an example of the party states failure to mitigate risk.
In March 2018, Premier Li Keqiang cited persisting financial risk as the first of three “critical battles” to be fought and won domestically. The level of debt continues to be a problem for the central leadership, however, principally because of inadequate debt-restructuring policies. Finances in the provinces remain opaque. Local governments have to meet growth quotas that typically require borrowing money for investment. In 2014, a national provincial-level debt audit ordered by the government yielded levels of debt that the Ministry of Finance deemed unacceptable. In other words, there is entrenched distrust at the central government level of local governments being able to implement the party’s economic policy.
Indeed, the level of control that Beijing has over provincial financial matters is unclear. For the first time in the history of the People’s Republic of China, Beijing recently required the World Bank’s assistance to improve the local government’s debt in two provinces — Hunan and Chongqing — expressing the need for a third party to help monitor and improve debt at the subnational level. At a time when the party is setting up the so-called “guidance funds” at the provincial level to support the national priority of promoting technological innovation, poor oversight of provincial-level implementation may prove a major hurdle.
Finally, Xi has seen mixed results in his effort to crack down on mass protests, which grew steadily in number during the decade that preceded Xi’s rise to power in 2012. Protesters, demobilized soldiers, and Marxist students have all pointed out the party’s failings. Xi has emphasized the centrality of both the institution of the military and Marxist ideology in his grand scheme to “rejuvenate the nation,” but he has also presided over a crackdown on the social groups that are the principal vectors of the People’s Liberation Army and of Marxism. He has launched a sweeping reorganization of the country’s armed forces and made military development a central element of his “Chinese dream.” Yet against this backdrop, military veterans’ protests have grown over the past three years. In 2016, Xi announced the demobilization of 300,000 more soldiers, thus increasing the potentially disgruntled segment of the population. The creation of the Ministry of Veterans Affairs last year seems to have been a cosmetic measure since retirement benefits and support for the families of retired servicemen — the principal demands of the protests — remain lacking.
Another source of social unrest comes from protesters claiming the mantle of Marxism itself. At the end of 2018, Marxist students from prominent universities demanded better treatment of industrial workers. Faced with this challenge to the party’s legitimacy, the authorities did not wait to act: 50 students were arrested and detained.
This spring, the People’s Republic of China is remembering two deeply controversial and highly contested episodes in its young history: the centenary of the May 4th cultural movement and the 30th anniversary of the military crackdown at Tiananmen Square. On May 4, 1919, patriotic students protested against the Versailles peace treaty, which handed Germany’s former possessions in China’s Shandong province over to Japan. After many mass arrests of students, the Chinese government ultimately gave in: it rejected the Versailles treaty, freed the arrested students, and dismissed its pro-Japan ministers. Mao Zedong celebrated the cultural movement launched on May 4 as the origin of Chinese Marxism, but the intellectuals who supported the demonstrations at Tiananmen Square appropriated the anniversary to call for greater democracy. Today, the formerly radical Communist Party has become the reactionary ruling power, and it has everything to fear from students who claim the substance of the Marxist egalitarian ideology.
None of the fault lines exposed here are new in the People’s Republic of China. However, the silencing of unorthodox voices within and outside the party, the discrepancy between central- and local-level economic management, and the disruptive effects of social protests are reaching new heights. Thus far, under Xi, the party has been successful at stifling organized opposition. But this success is a sign of its own decay, as it needs to employ increasingly coercive resources to remain in power. What has changed is not so much the grievances that the Chinese population addresses to the ruling party but the way that the latter silences them: It either appropriates the claims emerging from dissident voices, most prominently through an anti-corruption campaign that has mostly served to build up a new political base for Xi, or it clamps down. Clearly, the People’s Republic of China has entered a new phase in its history – one that is neither about opening up nor about reform.