THE ECONOMIST

APLN member Kevin Rudd argues that Chinese president Xi Jinping has upended decades-old political conventions and smashed through bureaucratic inertia in an effort to achieve his goals for China. Read the original article here.

The changes in policy, politics and personnel revealed by the Chinese Communist Party’s five-yearly congress, which finished in recent days, show just how radically China has changed under Xi Jinping, compared with his predecessors Deng Xiaoping, Jiang Zemin and Hu Jintao. His audacity is without bounds. Mr Xi is smashing through long-established political conventions and plain old bureaucratic inertia to achieve his ambitions for both himself and China. Consistent with his deeply-held ideological worldview, Mr Xi is determined to change the international order in a manner more compatible with Chinese national interests and values. His power to do so, at least within his own system, is now unconstrained.

Take politics. Mr Xi used the 20th congress to defy a convention that general secretaries limit themselves to two five-year terms. Originally this was introduced to preserve the principles of collective leadership and to prevent a return to Mao Zedong’s practice of lifelong rule. The cult of personality is also back. Mr Xi has his own body of ideological “thought” much earlier than his predecessors, and it has now been entrenched in the party constitution as “the Marxism of our times”. To further cement loyalty, he has presided over the longest-running anti-corruption campaign in the party’s 100-year history. Partly it has been a mechanism for entrenching political loyalty and control.

On the economy, Mr Xi has upended Deng’s 35-year-old growth model on ideological grounds. He has presided over a “new development concept” whose essential components are the revitalisation of state-owned enterprises and large-scale industrial policy; new restrictions on the private sector, a political assault on the tech, property and private education industries and a new “common prosperity” agenda. This has been matched with a mercantilist approach to international economic policy. It is anchored in his doctrine of the “dual circulation economy”: national self-sufficiency and the re-securing of China’s own global supply lines in response to what Mr Xi has concluded to be America’s strategy of systematic decoupling.

Importantly, there was no evidence in Mr Xi’s congress report that he is moving away from his increasingly statist development model and back toward the market, the private sector or to more open international economic engagement. Moreover, his stated commitment to accelerate the “internationalisation of the renminbi” appears designed to create an increasingly bipolar financial system internationally. Such a system would reduce China’s vulnerability to any future Western sanctions over Taiwan.

As for foreign and security policy, the same level of iconoclasm has also been on display. Mr Xi abandoned Deng’s more cautious approach long ago. But now he has indicated that national security at home and abroad should be China’s central preoccupation. He calls specifically for preparations for “the storm”, invoking a new “spirit of struggle”. Although the precise nature of this coming “storm” is left undefined in the document, it points to the future trajectory of China’s rapidly deteriorating relationship with America. And while Mr Xi’s language on Taiwan may not have changed significantly, his report states ominously that “the wheels of history are still grinding forward” on the island’s “inevitable” reunification with the mainland. The question concerns the timing, although Mr Xi has already indicated that this must be before the centenary of the founding of the People’s Republic in 2049.

The dramatic personnel changes to the Politburo Standing Committee showed Mr Xi at his most bold, however. Traditionally the body reflected a broad balance of factional and policy interests, as well as the complex web of family and loyalty networks among the party’s political elites. Indeed, this was seen as a necessary ingredient for long-term political stability. In recent times, this involved a complex balancing act between the party’s pro-market faction in favour of economic reform and a conservative group of older-style state planners. Instead Mr Xi excised the former faction’s three most prominent figures from the Party leadership. Not only did he oust Wang Yang, once considered the next prime minister, as well as Li Keqiang, the current one, from the Standing Committee despite neither being 68 or over at the time of the congress, the usual criterion for retirement. He also removed 59-year-old Hu Chunhua—an erstwhile star of the next generation of leaders—from the broader Politburo.

Those moves come as a surprise to many. None has shown any real political disloyalty to Mr Xi. That is no longer enough, apparently. Long-standing personal loyalty to China’s president is now the essential criterion for membership of the senior echelons of the party. And Mr Xi is not concerned about the impact of these decisions on international or domestic markets.

All those filling the four vacancies on the Politburo Standing Committee are Xi loyalists. Li Qiang, who is expected to be the new premier, and now number two in the Standing Committee hierarchy, is Mr Xi’s former chief of staff from his days presiding over the Zhejiang Provincial Party Committee. Mr Li served as Shanghai Party Secretary during the city’s recent brutal covid-19 lockdowns (a role that seemingly qualified him in Mr Xi’s eyes for promotion rather than demotion). But to be fair to Mr Li, he has a record of strong economic management at the provincial level. Second, Cai Qi, who will now run the party’s Central Secretariat, served with Mr Xi earlier in the leader’s career in Fujian. Mr Cai has also been the Beijing Municipal Party Secretary and deputy leader of the National Security Commission. Ding Xuexiang, who will now be responsible for the economy, knows Mr Xi from their time in Shanghai. And finally Li Xi takes on the Central Discipline Inspection Commission, which runs the party’s anti-corruption campaign. His personal ties with Mr Xi’s family go back decades through the president’s father.

In many respects, senior personnel appointments matter less now than after previous party congresses. That’s because Mr Xi has in effect become the “Chairman of everything” across the machinery of the state, the party and the military. But the premium Mr Xi attaches to absolute political loyalty and policy reliability will harm the quality of internal debate, particularly on the economy. This is dangerous as China now seeks to rebuild economic growth—a task made more difficult for any economic team by the overall ideological constraints that have been set.

Under Mr Xi politics continues to move to the Leninist left; the economy to the Marxist left; and Chinese foreign and security policy to a much more assertive nationalist right. These are profound changes from the relatively recent past. In large part they are the product of a formidable politician whose audacity at home may also be a precursor to even greater boldness abroad.

Image: Dan Williams/The Economist