The Communist Party of China (CPC) may soon push for the recentralization of political and economic powers from local governments to safeguard sovereignty and maintain social stability if two articles recently published by the party’s theoretical journals are indicative of top leaders’ thinking.
The proposal comes as Chinese President Xi Jinping asserts greater control in various areas, ranging from a regulatory clampdown on once free-wheeling technology companies to central interventions in property markets to hard state limits on the amount of time children are allowed to play video games per week.
The articles’ proposed recentralization of local government powers, however, signals a potential wider philosophical turn after decades of gradually devolving key powers from the center to the periphery in the name of administrative reform.
One article cited the theory of a political strategist called Jia Yi in the ancient Han Dynasty, who suggested the central government should prevent feudal lords from being self-governing.
The article said an absence of any central government economic intervention would lead to income disparity and social instability, echoing Xi’s new “common prosperity” policy initiative.
A second article, written by Zhang Xiaopu, a researcher at the General Office of the Central Leading Group for Financial and Economic Affairs, said some coastal provinces had bypassed the central government’s economic plans and over-invested in certain sectors since the 1990s.
The article also accused some local governments of ignoring Beijing’s carbon neutrality goal by continuing to invest in energy-intensive industries. Some local governments rashly launched new measures but caused new problems, Zhang wrote, which some analysts surmised was a veiled reference to the current national power crunch.
From November 8 to 11, about 2,000 delegates will gather in Beijing for the CPC’s sixth plenary session to pass the party’s “third historical resolution,” which will seek to strengthen Xi’s leadership and legacy and provide guidance on his common prosperity push.
On August 17, Xi told the CPC’s financial and economic affairs committee that China would push forward the common prosperity policy step-by-step and would not repeat the income disparity problems seen in some developed countries after their industrialization.
On October 15, he penned an article further elaborating the policy with concrete action for nationwide tax reform and improvements in education, healthcare and housing services.
On October 22, Xuexi Shibao, or the Study Times, a journal of the Central Party School, published an article about Jia Yi, who was born in 200 BC during the Han Dynasty and later became a political advisor and theorist.
The article praised Jia for his theory that the central government should centralize the country’s political and economic power and have absolute control over feudal lords. It said although Jia’s Essay of Order and Stability was not adopted by the Han emperor before he died at 33, it had influenced several emperors over the past 2,000 years of Chinese history.
According to the article, Jia advocated a strict political order so the central government had supreme authority over local governments. He said in order to maintain the country’s unity and stability, the central government’s orders had to be completely implemented at local levels, similar to the fact that “a body controls an arm, which controls a finger.”
The author of the article elaborated on Jia’s concept and said that highly-centralized power had helped China to build up a powerful army and protect its people. The author said in the Tang dynasty, power decentralization had made “strategic experts and powerful generals” become loyal to local governments, instead of the nation, and resulted in the collapse of the empire.
“In the absence of central government intervention, the rich get richer and the poor get poorer. The super-rich hire talent and servants, make money by force or trickery, protect criminals and eventually become a powerful force that can resist local governments,” said the article, citing Jia’s theory.
“Such rising political force uses its financial power to threaten the country’s economic stability and the central government’s authority.”
The article said it was natural that poor people, who suffered from a rising wealth gap, hated society and governments and that their hatred would eventually cause social unrest.
Some commentators have interpreted the article as de facto promotion of Xi’s common prosperity gambit. They have noted Xi has also called for a “third distribution” of charity systems and a new development environment that provided chances for more people to become wealthy.
Some have suggested the articles also speak to the ongoing Evergrande debt crisis, where Beijing has called on the Shenzhen-based property developer’s founder Xu Jiayin to sell his own private assets to make good on his company’s massive liabilities. The developer’s massive debt load of some $300 billion has raised concerns of a wider property crisis.
Cao Heping, an economist at Peking University, said last month that the central government would not bail out businessmen who have personal assets in the tens of billions of yuan and still maintain private jets.
On October 16, Qiushi, a theoretical journal published bi-monthly by the Central Party School and the CPC Central Committee, ran an article titled How to implement economic work in a new development period?, which evaluated Xi’s economic work in Hebei and Fujian provinces between 1982 and 2002.
Zhang Xiaopu, the article’s author, is a researcher at the General Office of the Central Leading Group for Financial and Economic Affairs, which is headed by Chinese Vice Premier Liu He.
Zhang praised Xi for his scientific economic planning and strong determination to implement the central government’s orders. Zhang said Xi strictly followed the central government’s decision to suppress the over-investment and inflationary problems in Ningde, Fujian, back in 1988.
He said in 1999, Xi stabilized the investment confidence of Fujian-based Taiwan manufacturers when tensions in the Taiwan Strait spiked after Taiwanese leader Lee Teng-hui delivered his “two-state” theory. He said Xi’s past experiences were still useful now.
“How to accomplish missions and tackle challenges in new situations? A majority of officials are proactively learning, but a few have failed to understand the central government’s plans accurately,” Zhang said.
Some local officials misunderstood Beijing’s recent “internal circulation” policy to mean “development with doors shut,” while some underestimated the difficulties of developing high-tech industries, resulting in over-investments in electric vehicles, new energy and semiconductors, Zhang said.
Some local officials boosted property prices and approved loans irregularly to fund useless infrastructure projects for the sake of economic growth, he added.
“When resolving problems, some local governments rashly adopted a ‘stop everything’ or ‘ban everything’ approach, which caused more problems,” Zhang said.
Last month, China faced a nationwide power crunch, particularly in the northeastern provinces and the manufacturing hub of Guangdong, as power plants stopped generating electricity amid skyrocketing coal prices.
Local governments also restricted demand for electricity because they were urged by Beijing to cut carbon emissions. Due to the sudden drop in the power supply, many people were stuck in elevators, traffic lights turned off and candles sold out.
Zhang concluded that local governments had to strictly follow the central government’s orders, accurately understand Beijing’s economic plans and policy directions, and avoid short-sighted behavior such as boosting property prices and polluting the environment to achieve mere economic growth.