The five-yearly congress of China’s Communist Party that ended with the unveiling of the new leadership here Thursday has — albeit unwittingly — told the rest of the world a lot about the challenges facing the last major state ruled by a Communist Party.
The outgoing leader, Hu Jintao, opened the meeting on Nov. 8 by reading out a list of problems confronting the country. The need for reform to cope with them was evident. His successor, Xi Jinping, told journalists after he was appointed on Thursday of the need to do more for the people and to deal with corruption and bureaucratization in the party.
But the congress ended by appointing a leadership group, the Standing Committee of the Party Politburo, with a conservative tilt, and excluded two leading reformers. The behind-the-scenes horse-trading that has gone on all year produced a seven-man Standing Committee that represents a safety-first outcome to this once-in-a-decade transition. True and trusted party figures were promoted who have hewn faithfully to the central party line without expressing any views of their own.
We know from internal reports and speeches that the leaders of the world’s second biggest economy realize the need to change the model that has propelled the country forward since the start of economic reform in 1978 and to respond to a rapidly evolving society.
The three key elements in the growth formula championed by Deng Xiaoping — cheap labor, cheap capital and strong export demand — are no longer what they were as wages rise, capital becomes more expensive and developed markets are sluggish. The private sector that did much to power growth in the 1980s is squeezed by the powerful state enterprises.
Yawning wealth disparities cause increasing public resentment. China has a huge pollution problem. Corruption is a major sore. There is growing public cynicism. While individual liberties have greatly expanded, anybody advocating competitive democracy outside the one-party system is likely to end up in jail. The political straitjacket imposed since the Communist Party won power in 1949 is at odds with a society connected by social media.
Admirers of the Chinese system of governance paint it as an experienced meritocracy that gets things done in contrast to fumbling democratic Western politicians. But the meritocracy, such as it is, has a narrow base of the 6 percent of the population who are party members. The criteria for promotion are opaque. Personal loyalties and patron-client relations between the elders and rising younger figures distort the system as seen by the re-emergence in the leadership process of the former leader, Jiang Zemin, who was meant to have retired 10 years ago.
Hu Jintao acknowledged at least some of these problems in his opening speech, and cleared the air by stepping down as chairman of the military commission instead of trying to stay on, as his predecessor Jiang did. Still, like everybody else at the top, he insisted that the political system would remain intact.
But, without a readiness to embrace change, including legal reform, addressing the multiple flaws in the so-called China model is virtually impossible. The all-embracing nature of the regime, and the weakness of civil society, mean that much-needed reforms come with political consequences that are opposed by vested interests who are doing very nicely out of the present arrangements and have the political connections to put a brake on change.
The two men (there are no women at the top table) with reformist credentials in the running for promotion to the Standing Committee — Wang Yang, party secretary of the richest province, Guangdong, and Li Yuanchao, the party’s organization director — were the two who did not make the final cut.
Ask informed sources how Xi got to the top and the answer is that the various interest groups feel comfortable with him. He has said nothing about where he stands on potentially controversial policy issues. This makes him symbolic of a leadership that has evolved from the wild, one-man adventurism of Mao Zedong to the equivalent of a secretive, conservative corporate board that keeps itself aloof from public scrutiny, does not account for its decisions and counts on a flow of good numbers to gain acquiescence. Whatever one thinks of the U.S. political process, the contrast with the open presidential debate is striking, as is the lack of popular participation.
That may be understandable for a self-protective regime, but it is dangerous for China. The country is at a crucial stage of its development. It needs to set a new roadmap for the coming years. The closed political system and entrenched economic and political interests stand in the way.
Now that Xi has got the top job, the question is whether he can buck his own track record and the system that nurtured him in order to usher in reform — or whether he even wants to, and, if he does, whether the system will allow him to act. There are too many known unknowns for comfort, given China’s global weight.
Jonathan Fenby, a managing director of an emerging-markets consultancy firm, is author of Tiger Head, Snake Tails.