What Xi Jinping as president for life means for China and the world

 

China is on track to becoming a global super power but will their President Xi Jinping hold them down or help them to fly

China’s Central Committee holds seven plenums every five years and its most recent, which concluded on Thursday, raises several questions surrounding the future of the Chinese Communist Party (CCP) and its Chairman, Xi Jinping. Xi appears to have an ironclad grip on the CCP and China, positioning himself as the presumed leader of the country indefinitely.

In 2016, Xi was declared a “core” leader of the CCP, a title that has only been conferred upon three other Chinese rulers, Mao Zedong, Deng Xiaoping, and Jiang Zemin. A year later, Xi incorporated a list of his speeches and policies into the Chinese constitution. In his most conspicuous manifestation of power, in 2018, China’s National Congress voted to amend the Chinese constitution by abolishing the two-term limits on the Presidency. Xi has also thus far failed to nominate a successor, which previous leaders typically do at the start of their second term. Xi looks increasingly likely to win a third term during the 2022 Chinese elections and could potentially retain power for the rest of his life.

 President for Life

A peaceful transition of power is integral to the stability of any country, as recently evidenced by Donald Trump’s efforts to discredit President Joe Biden’s electoral victory. China’s last leader for life was Mao, who oversaw one of the country’s most disastrous periods during the Cultural Revolution and Great Leap Forwards. Mao’s successor, Xiaoping spoke against the cult of personality embraced by Mao and ushered in a series of reforms that both opened the country’s economy and established limits on individual power. In a report for the Lowey Institute, Richard McGregor, and Jude Blanchette, detail the importance of an orderly transition, highlighting the fact that autocrats’ attempts to remain in power for life often trigger succession crises, formal leadership challenges or military coups. While previous Chinese dynastic power struggles were largely limited within its borders, they write, “the global impact of a 21st century succession crisis would be immense.”

Xi for his part has said that he is personally opposed to lifelong rule, but his actions indicate that he is unprepared to relinquish power anytime soon. McGregor and Blanchette argue that by removing term limits and refusing to nominate a successor, “Xi has solidified his own authority at the expense of the most important political reform of the last four decades: the regular and peaceful transition of power.” Compounding the problem, there are very few barriers between the state bureaucracy and the CCP. Describing the distinction between the two as a “mirage,” Srijan Shukla writes in an ORF report that the “matrix” structure of governance employed in China shows how “the final power lies with the party, and not the government.” As the General Secretary of the CCP, a role that notably has never had term limits, Xi wields significant sway over both the party and the Chinese government as a whole.

Control over the CCP and society

Xi has made a notable effort to consolidate his status within the CCP and the larger Chinese political apparatus. In 2013, he launched a much-heralded anti-corruption campaign which established his uncompromising leadership style and side-lined several of his more vocal rivals. Xi, as the Chairman of the Central Military Commission (CMC), also restructured the organisation between 2015 and 2016 in order to remove his opponents from leading positions and install his own supporters in key roles. As described by one Jamestown Foundation report, Xi has also encouraged the practice of biaotai or ritualistic declarations of loyalty by prominent regional supporters.

Inculcating his own policies and philosophy into the party’s charter he has also consolidated his position as its unquestioned leader. In a 2018 party keynote speech, Xi stated that political thoughts such as the ‘Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era’ should be used to “arm the entire party, educate the people and push forward work.” 

McGregor and Blanchette summarise his grip on the political apparatus, writing that “hardening political conformity under Xi, combined with the more banal realities of bureaucratic policies, have led to numerous officials publicly declaring fealty to Xi.”

His grip over Chinese society is also noteworthy. Through the use of extra-judicial detentions and other coercive measures combined with strict restrictions on freedom of speech, Xi has spearheaded a sustained crackdown on dissent. Targeting journalists, activists, academics and ethnic minorities, this crackdown has systematically silenced and punished anyone who dares to criticise Xi.

The CCP has also engaged in revisionist history, launching a year-long campaign for the nationwide study of Xi’s philosophy. In addition to the content taught, party leaders have also been encouraged to recruit supporters from college campuses and to establish youth wings across the state. In a more creative form of indoctrination, the CCP under Xi has also established Overseas Chinese Service Centres, a global network of offices designed in name to help the Chinese diaspora to adapt to life in different countries. While the centres likely do serve that purpose, they also encourage loyalty to Xi and promote his achievements and thoughts across the globe.

Dissent

Despite these measures, there has been limited criticism of Xi to emerge from China. After his removal of term limits, Chinese social media users took to posting images of Winnie the Pooh (who they think looks like Xi) as a subtle attempt to protest his grip on power. All mentions of Winnie the Pooh were later banned by the CCP. In another rare rebuke of the President, a law professor in Beijing, Xu Zhangrun, called on lawmakers to reverse the decision to abolish term limits. Zhangrun was subsequently arrested in 2020 but has since been released. China’s slowing economic growth and mounting governmental debt could also promote dissent amongst the middle class, who are peddled a version of Chinese economic superiority that may not always match up to their experiences in the labour market.

In Hong Kong and Taiwan, two contested territories, the criticism has been even more pronounced. In 2019, after the CCP introduced an extradition order in Hong Kong, which is a Special Administrative Region of China, mass protests erupted across the state. After activists sieged the Polytechnic University, the Chinese government oversaw a series of high-profile arrests which were met with wide-spread international condemnation. Similarly in Taiwan, which China views as a breakaway state, the country’s President, Tsai Ing wen, promised to uphold its sovereignty after Xi called for the reunification of both countries. Internationally, China has faced massive criticism over its human rights abuses, its trade practices, and its aggressive foreign policy under Xi.

Impact on China

Since Mao, China has had a series of leaders who prioritised an open, almost capitalist, economic policy and a moderate, cautious foreign policy. Under Xi, much of that has changed. As another Jamestown Foundation

 points out, Xi has shown a willingness to discount or rewrite history in a way which suits his priorities. On the 40th anniversary of the economic reforms instituted by Xiaoping, Xi failed to mention the venerated leader’s name even once. Instead, he made several references to ziligengsheng or self-reliance, a phrase regularly used by Mao. Xiaoping’s policies catapulted China into a 21st century economic powerhouse and Xi’s willingness to ignore that could be interpreted as a trajectory towards greater state control over businesses.

In its most recent five-year plan, the CCP has outlined tighter regulations over much of the Chinese economy. It states that rules will be introduced to cover national security, technology, and monopolies. Shares in many Chinese companies have fallen this year following concerns over the crackdown, with high-profile companies like the Ant Group, chaired by Chinese billionaire Jack Ma, failing to escape scrutiny. In an article for Foreign Affairs Magazine, Elizabeth Economy argues that “too much party control – perhaps too much consolidated in Xi’s hands – has contributed to economic stagnation.” China’s credit ratings have also fallen sharply since 2017, with agencies such as Moody’s and S&P predicting a negative outlook over fears of overarching government control and declining economic growth. In an interview with indianexpress.com, Jean-Pierre Cabestan, a professor of political science at Hong Kong Baptist University, says that as Xi continues at the helm, China will increase its control over large businesses, but small ones will likely be spared.

According to another article in Foreign Affairs Magazine, policy making has also suffered under Xi with “decisions becoming more opaque and politicized.” This is largely because under the current political climate, ministers are unable to question Xi’s policies and fear giving him accurate information when that information undercuts his assumptions. Meanwhile, although Xi’s crackdown on corruption has been commendable, it has failed to end the patronage system in the bureaucracy and has also pardoned companies and individuals closely connected to Xi from oversight.     

China also risks greater uncertainty in the event of a succession crisis. According to data collected by McGregor and Blanchette, 41 per cent of the world’s autocrats either experience death, exile, or imprisonment within a year of leaving office. That’s true for only seven per cent of democratic leaders. Xi’s unwillingness to relinquish control could lead to domestic tensions in China which would subsequently have cascading consequences for the rest of the world.

 Impact on the rest of the world

In the early 2000s, Chinese leaders emphasised the fact that China would rise peacefully. However, under Xi, the country has assumed a far more aggressive posture. The CPP has modernised its military, employed the use of grey zone tactics in building islands in the South China Sea, has stifled civil liberties in Hong Kong and Tibet, has engaged in mass cyberwarfare, been involved with border skirmishes with India and has pursued an aggressive form of international relations known as Wolf Warrior Diplomacy. Beijing is clear in its ambitions to be a global superpower and it is willing to toe the line when it comes to means of achieving that.

Xi has also spearheaded the ambitious One Belt One Road (BRI) initiative, investing over $4.3 trillion in foreign infrastructure projects as of September 2020. Although the US has tried to counter the BRI with its Blue Dot alliance, it pales in comparison to the BRI in both scale and impact. A 2019 study by global economic consultants CEBR forecasted that the BRI would boost global GDP by $7.1 trillion per annum by 2040. However, the initiative is not without flaws. 

Many of the investments made by China come at the expense of the host nation. In Ecuador for example, China built a dam that was supposed to account for a significant amount of the country’s energy needs. In order to finance the dam and other infrastructure projects, the Ecuadorian government took a $19 billion loan from China. Today, the dam, constructed by Chinese workers, is producing a fraction of the energy it was supposed to. Regardless, according to the terms of the agreement, China still gets paid, taking 80 per cent of Ecuador’s most valuable export – oil – until the debt is settled. To finance this, Ecuador has been forced to cancel or put on hold several other development projects.

China has invested heavily in Africa, Asia, and South America under the BRI. However, as proven with Ecuador that investment often serves as a debt trap for the receiving countries. It also comes with strings attached. China has pressured many of the countries into suspending relations with Taiwan. According to Cabestan, Xi is likely to try and annex Taiwan although the US will try to prevent it. Taiwan is the world’s largest producer of semiconductor chips, a valuable commodity in various sectors ranging from tech, automobiles, and telecom. If China succeeds in annexing Taiwan, it will further entrench its place in the global economy and cause mass instability in the region.

For India, China’s border skirmishes are a particular point of concern, as are its ambitions in the South China sea and infrastructure investments in Sri Lanka and Pakistan. Countries like Australia that have tried to stand up against Beijing have been on the receiving end of Wolf Warrior Diplomacy and given how crucial a trading partner China is for India, New Delhi will be wary to risk incurring its wrath. The relationship is also aligned in China’s favour. China is India’s second largest trading partner whereas India is China’s 11th. China also exports four times the value of goods that it imports from India. In terms of the future of the relationship, Cabestan, asserts that it will include a “mixture of confrontation and cooperation.” Additionally, the “border issue won’t be solved and the great power rivalry in the Indian Ocean will continue to increase.”

Written by Mira Patel

Source: Indian Express, 16/11/21

China’s water hegemony in Asia

It wasn’t geography but guns that established China’s chokehold on major transnational river systems in Asia

Asevere drought currently ravaging South-east and South Asia has helped spotlight China’s emergence as the upstream water controller in Asia through a globally unparalleled hydro-engineering infrastructure centred on damming rivers. Indeed, Beijing itself has highlighted its water hegemony over downstream countries by releasing some dammed water for drought-hit nations in the lower Mekong river basin. In releasing what it called “emergency water flows” to downstream states over several weeks from one of its six giant dams—located just before the Mekong flows out of Chinese territory—China brashly touted the utility of its upstream structures in fighting droughts and floods.

But for the downriver countries, the water release was a jarring reminder of not just China’s newfound power to control the flow of a life-sustaining resource, but also of their own reliance on Beijing’s goodwill and charity. With a further 14 dams being built or planned by China on the Mekong, this dependence on Chinese goodwill is set to deepen—at some cost to their strategic leeway and environmental security.

Armed with increasing leverage, Beijing appears to be pushing its Lancang-Mekong Cooperation (LMC) initiative as an alternative to the lower-basin states’ Mekong River Commission, which China has spurned over the years. Indeed, having its cake and eating it, China is a dialogue partner but not a member of the commission, underscoring its intent to stay clued in on the discussions, without having to take on any legal obligations.

LMC, a political initiative emphasizing Chinese “cooperation”, is intended to help marginalize the commission, an institution with legally binding rules and regulations. China’s refusal to join the 1995 Mekong treaty, which created the commission, has stunted the development of an inclusive, rules-based basin community to deal with waterand environment-related challenges.

It was not a coincidence that Beijing’s water release started shortly before the 23 March inaugural LMC summit of the leaders of the six Mekong basin countries in Sanya, China. The LMC project is also designed to overshadow the US-sponsored Lower Mekong Initiative, which seeks to overcome Chinese opposition to the Mekong treaty by promoting integrated cooperation among Cambodia, Laos, Thailand and Vietnam.

The Mekong, Southeast Asia’s lifeline that is running at a record low since late last year, is just one of the international rivers China has dammed. It has also targeted the Brahmaputra, the Arun, the Indus, the Sutlej, the Irtysh, the Illy, the Amur and the Salween.

Asia’s water map changed fundamentally after the communists took power in China in 1949. It wasn’t geography but guns that established China’s chokehold on almost every major transnational river system in Asia. By forcibly absorbing the Tibetan plateau (the giant incubator of Asia’s main river systems) and Xinjiang (the starting point of the Irtysh and the Illy), China became the source of transboundary river flows to the largest number of countries in the world, extending from the IndoChina peninsula and South Asia to Kazakhstan and Russia.

Before the communists seized power, China had only 22 dams of any significant size. But now, it boasts more large dams on its territory than the rest of the world combined. If dams of all sizes and types are counted, their number in China surpasses 90,000.

China’s dam frenzy, however, shows no sign of slowing. The country’s dam builders, in fact, are shifting their focus from the dam-saturated internal rivers (some of which, like the Yellow, are dying) to the international rivers. This raises fears that the degradation haunting China’s internal rivers could be replicated in the international rivers.

China, ominously, has graduated to erecting mega-dams. Take its latest dams on the Mekong: the 4,200megawatt Xiaowan (taller than the Eiffel Tower in Paris) and the 5,850megawatt Nuozhadu, with a 190 sq. km reservoir. Either of them is larger than the current combined hydropower-generating capacity in the lower Mekong states.

Despite its centrality in Asia’s water map, China has rebuffed the idea of a water-sharing treaty with any neighbour. Against this background, the concern growing among downstream neighbours is that China is seeking to turn water into a potential political weapon. After all, by controlling the spigot for much of Asia’s water, China is acquiring major leverage over its neighbours’ behaviour in a continent already reeling under very low freshwater availability.

In the Mekong basin, China has denied that it is stealing shared waters or that its existing dams have contributed to river depletion and recurrent drought in the downstream region. Yet, by ramping up construction of additional giant dams, it has virtually ensured long-term adverse impacts on the critical river system. Indeed, with Chinese assistance, landlocked Laos also plans to build more Mekong dams in order to make hydropower exports, especially to China—the mainstay of its economy.

China is clearly not content with being the world’s most dammed country, and the only thing that could temper its dam frenzy is a prolonged economic slowdown at home. Flattening demand for electricity due to China’s already-slowing economic growth, for example, offers a sliver of hope that the Salween river—which flows into Myanmar and along the Thai border before emptying into the Andaman Sea—could be saved, even if provisionally, from the cascade of hydroelectric mega-dams that Beijing has planned to build on it.

More fundamentally, China’s unilateralist approach underscores the imperative for institutionalized water cooperation in Asia, based on a balance between rights and obligations. Renewed efforts are needed to try and co-opt China in rules-based cooperation.

Source: Mintepaper, 27-04-2016

The truth about Chinese unemployment

Leaders are confronted with a difficult choice: higher near-term unemployment or slower long-term growth

Since 2002, China’s economy has undergone significant changes, including a shift from acceleration to deceleration of gross domestic product (GDP) growth. Yet, the official urban unemployment rate, jointly issued by the National Bureau of Statistics (NBS) and the Department of Labor and Social Security, has remained remarkably steady, at around 4-4.1%. Since 2010, it has stood at precisely 4.1%. This is surprising, to say the least—and has led some to ask whether the NBS could be fudging the numbers.

The NBS is not lying; it simply lacks data. The unemployment rate that the NBS provides reflects how many members of the registered urban population have reported to the government to receive unemployment benefits. But China’s piecemeal unemployment insurance and underdeveloped re-employment programmes weaken the incentive for people to seek assistance. As a result, the NBS figures are far from accurate.

China’s government has moved to remedy this, by carrying out urban unemployment surveys. But, despite having been collected a decade ago, those statistics have yet to be released.

In lieu of convincing official figures, some economists have taken matters into their own hands, using data from the urban household survey (UHS) to estimate the unemployment rate. Extrapolating from UHS data gathered in six provinces, Jun Han and Junsen Zhang, for example, concluded that, in 2005-06, Chinese unemployment stood at around 10%. Using UHS data from almost all of China, Feng Shuaizhang, Hu Yingyao, and Robert Moffitt calculated an average urban unemployment rate of 10.9% from 2002 to 2009 —the highest estimate ever produced.

But these estimates are just that— estimates. Because UHS data are not freely available, different people obtain results for different years and provinces from the various sources they could access. This has caused considerable frustration for researchers, and has resulted in estimates with ranges so wide as to be statistically insignificant.

In our own research at Fudan University in Shanghai, my two PhD students, Liheng Xu and Huihui Zhang, and I managed to obtain a reasonably broad supply of official statistics: the 2005-12 data for four provinces, the 2005-09 data for three provinces, and monthly data for 2010-12 for four of these seven provinces. While the sample is technically small, the provinces for which we acquired data represent the coastal, inland and northeast regions. With the right adjustments and processing, we were able to infer the unemployment rates in different kinds of provinces and municipalities, thereby estimating the real nationwide unemployment rate.

We found that, although China’s urban unemployment rate was probably quite high in 2005, standing at 10.7%, it has most likely dropped over the past decade, reaching 7% in 2012. That puts the annual average for the 2005-12 period at 8.5%. (These and our other findings correlate with a cross-sectional analysis of the official data, meaning that the data for registered unemployment, subjected to such an analysis, might serve as a proxy for the real unemployment rate.)

Moreover, while rapid GDP growth contributed to falling unemployment in, say, 2007, unemployment continued to decline even after the global financial crisis of 2008 began to weaken economic performance. Most economists would assume that declining unemployment amid falling GDP growth is related to a decline in labour-force participation. But our calculations, based on the UHS data, show that labour-force participation in China actually increased slightly after 2008, as the proportion of workers exiting the labour market decreased. This can be explained partly by an ongoing structural shift in the Chinese economy, from a manufacturing-driven growth model to a services-led model that empowers private innovators. And, indeed, as UHS data show, this shift led to continuous job creation in the services sector from 2005 to 2012.

What has not happened is significant destruction of jobs in the state sector and manufacturing industries, especially since 2009. As the UHS data suggest, the average time it takes an unemployed worker to find a job in the services and non-state sectors is shorter than in the manufacturing and state sectors. If the manufacturing and state sectors do begin to lay off more employees, urban unemployment rates are bound to rise.

The reason that hasn’t already happened is that the government has, to some extent, been propping up these sectors since the global financial crisis, by implementing massive stimulus packages focused on investment in infrastructure and real-estate development. This has sustained the rapid growth of the secondary sector, which has thus been absorbing large numbers of low-skill workers. In fact, upon closer examination of the UHS data, we found that the least-educated workers largely accounted for the decline in overall unemployment.

This stimulated infrastructure and real-estate construction boom has also led to the expansion of heavy industry, including state-owned steel, cement, chemicals, glass and other enterprises, causing employment growth to accelerate from 2005 onward. The NBS data show that the employment growth rate in the state sector was negative before 2009, when it turned positive.

The fact that the unemployment rate is declining while GDP growth slows suggests that labour productivity is actually worsening—a trend that is likely to lower China’s long-term potential growth rate. Since the effects of the stimulus obviously cannot last, the sectors that were being propped up will soon begin to shed more workers, causing the unemployment rate to rise. Only further government intervention could prevent this outcome; but that might mean delaying structural reforms that are needed to sustain productivity growth. China’s leaders are thus being confronted with a difficult choice: higher near-term unemployment or slower long-term growth.

Source: Mintepaper, 19-04-2016