This article originally appeared in ValueCap Research’s China Capitalist Newsletter
At the Central Committee’s four-day Sixth Plenum, which ended on Oct. 27th, the party “called on all its members to closely unite around the CPC Central Committee with Comrade Xi Jinping as the core”—reported Xinhua, the party’s official mouthpiece.
The significance of this communique, like many party statements, can seem opaque to those unfamiliar with their unique jargon. Dr. Willy Lam, an Adjunct Professor at the Center for China Studies and the History Department of the Chinese University of Hong Kong, has a deep understanding of this sort of party speak, and Chinese politics in general. He is a widely-regarded expert on the inner workings of China’s Communist Party. Late last month, Dr. Lam spoke to members of the Foreign Correspondents Club of China in Beijing about what might go on behind closed doors at the plenum, as well as the state of elite party politics.
Dr. Lam cited the passage of so-called “Sunshine Legislation” as one potential plenum development. Such legislation would have required all members of the Central Committee to disclose their assets, as well as assets of family members. Similar legislation had been proposed in the past, but not surprisingly it was unpopular with most officials. Dr. Lam wondered if President Xi Jinping and his anti-corruption czar, Wang Qishan, might now finally have the political capital necessary to pass the legislation. Ultimately the opposition still proved too great however, and the legislation was not passed.
Internal Party Rules
Dr. Lam also suggested that Xi Jinping might try to pass more so-called “rules of behavior.” Past “rules of behavior” had required officials not “make groundless criticism of the central party leadership,” which, according to Dr. Lam, means that “nobody should criticize Xi Jinping.” Dr. Lam further speculated that Xi Jinping might introduce more “political rules” that could be used against rivals. “The problem is that it is not a legal concept, and of course only one person in the Party, namely Xi Jinping, has the right to define what constitutes political rules.” Additionally, we may never know if these internal party rules were even passed. Dr. Lam warned that many of them “will not see the light of day.”
Another potential change was the abolition of an unwritten rule requiring Politburo Standing Committee members to retire at age 68. This would allow Wang Qishan, who is currently 68, to stay on for five more years. There is some evidence that this change actually took place. According to Bloomberg, Deng Maosheng, a director with the party’s Central Policy Research Office, said in a plenum-related news briefing that, “The matter of age needs to be flexibly handled, and it doesn’t have to be a set standard . . .No clear limitation on the retirement age is a matter that is being emphasized at this moment.”
Dr. Lam believes that the ultimate goal of all these rules is for Xi Jinping to protect his own power. “There will be norms of behavior, rules and regulations passed. But their major motive, I think, will be to consolidate Xi Jinping’s position as the new helmsman, the new big boss of the party.”
Make Up of the Politburo Standing Committee
The (currently) seven-member Politburo Standing Committee is the de facto most powerful decision-making body in China. Dr. Lam emphasized that no discussions regarding the future composition of the Politburo Standing Committee were to take place at the plenum. Instead, committee members would most likely be decided in July or August, and “elected” at the 19th Party Congress in fall of next year. Five of the seven members of the council will be age 68 or over at that time, which traditionally has meant certain retirement. Dr. Lam predicts that most of the 68-year-olds will step down, with the possible exception of Wang Qishan.
In terms of potential new additions to the Standing Committee, the most noteworthy are Hu Chunhua and Sun Zhengcai. They are significant because they are the only Politburo members who come from the sixth generation of leadership—those leaders who were born in the 1960s. It seems certain that Xi Jinping and Li Keqiang’s replacements—or the next General Secretary and Premier, respectively—will need to come from the sixth generation. Only a Standing Committee member born in the 1960s would be considered experienced enough to lead and young enough to serve for the required number of years.
According to Dr. Lam, Hu and Sun’s chances of moving up to the Standing Committee are further enhanced by a secret agreement made by Hu Jintao and Xi Jinping. In return for relinquishing all his positions and stepping down from power, Xi agreed to let Hu Jintao insert two members of the sixth generation into the new Politburo Standing Committee. As protégés respectively of Hu Jintao and Wen Jiabao, Hu Chunhua and Sun Zhengcai would have a leg up on the competition. However, Dr. Lam gives them both only a 25% chance of making it to the Standing Committee. This is because despite the deal Xi made, Xi would be reluctant to promote officials from rival factions. He would much rather promote cadres loyal to himself.
Yet, factional dealings and backroom politics are not the only considerations when promoting officials. Dr. Lam believes that having a track record of effective leadership is also essential. Despite Xi’s power, he must still convince the party that his picks are able to run the country. While Hu and Sun have done “reasonably well,” in their home jurisdictions, their accomplishments are not known nationally. Dr. Lam does not think they have the national stature necessary to be considered qualified candidates.
Doing a Putin
Xi Jinping has no shortage of his own protégés whom he would like to promote. Unfortunately for him, however, none of them are currently on the Politburo, a necessary requirement before promotion to the Standing Committee. Even after a cadre makes it to the Standing Committee, convention requires that they serve for at least five years before taking on either the Premier or General Secretary position. Thus, even if Xi’s favorites make it onto the Politburo next year, they would still have a decade of service to go before they could be named as his successor. Dr. Lam believes this situation makes it “more likely than not” that Xi will break with convention and attempt to stay on for three terms, until 2027. He calls this “doing a Putin,” as President Putin also disregarded term limits by serving a third term. Xi Jinping is of course, a great admirer of Putin.
Barriers to Economic Reform
“If you were to ask me about the prospects for economic reform under Xi Jinping, I’m not exactly optimistic,” Dr. Lam says. According to him, plans were laid in 2013 for a host of new economic and social measures that since then “have not been up to scratch.” Officials also announced the establishment of free trade zones in 2013, promising to have at least twenty within a year. So far there are only four. “I have talked to foreign business companies which have set up in these four free trade zones, and they’re not impressed. They’re not impressed that there are [truly] more liberalized regulations—for example regarding capital account movements in and out of the country.” Furthermore, it seems Xi Jinping believes that his tight grip on the economy is a political necessity. “Xi Jinping has emphasized that for the Communist Party to remain China’s perennial ruling party . . . the Communist Party must have control over the economy.” Dr. Lam believes it possible, however, that if Xi gains more power after the 19th Party Congress he might move faster with certain economic reforms, particularly those that won’t greatly affect the party’s control over the economy.
Dr. Lam also predicts a 30% chance that China’s Premier, Li Keqiang, will be forced to leave the Standing Committee at the 19th Party Congress and will be “sidetracked” to a post on the National People’s Congress. “The one reason why Li Keqiang would be moved to NPC . . . is his decision-making powers over the economy have been usurped by the General Secretary.” Dr. Lam maintains there has been conflict within the Chinese leadership over the handling of the economy. The “unprofessional manner” that the two stock market crashes were dealt with, as well as the depreciation of the RMB, was the result of competing economic decisions by two different factions: one reporting to Li Keqiang and one reporting to Xi Jinping. While consolidating control of the economy would solve the issue of competing regulatory teams, it would do nothing for the development of institutional checks and balances. “It is not healthy for the economy to be run by these secretive leading groups which do not report to the public,” said Dr. Lam. “They are totally non-transparent, even by Chinese standards. We don’t even know how often the Leading Group of Finance and Economics meets.” Therefore, if Li Keqiang is relegated to the National People’s Congress, it will be a bad sign for both economic and political reform.
One of the main announcements following the Plenum was Xi Jinping’s new status as “core” (hexin) leader. Deng Xiaoping first developed the idea that every generation of leadership had a core—Mao Zedong and himself had been core leaders to their respective generations. Thus, having been declared “core” puts Xi Jinping in company with Mao Zedong and Deng Xiaoping, two leaders who ruled well outside their institutional powers for a seemingly indefinite length of time. After the Plenum, Dr. Lam told the AFP that Xi’s new status signaled he might be around for a while. “The core of leadership can last forever,” he said. “There’s no idea of tenure, retirement age associated with the core.”