To change or not to change in Xi’s China

In 2012, the year Xi Jinping took power, it was the 63rd anniversary of the Chinese Communist Party’s (CCP) rule in China. It was a time of deep crisis within both the party and the country, marked by concerning precedents in the history of the Communist Party of the Soviet Union (PCUS).

In 1980, the 63rd anniversary of the CPSU’s rule, the largest and deepest protest in the Soviet Empire broke out in Poland. In 1956, 24 years earlier, Soviet power was first shaken by the Budapest uprising. In 1968, 12 years later, it was Prague’s turn. Both protests were bloodily suppressed.

That seemed to be the destiny for Warsaw as well, but then things were more complicated. A Polish pope sat in Rome, speaking with striking workers in the Polish shipyards, but also in Washington, where a devout Catholic led the CIA. The protests weren’t confined to a single city, but spread across the whole country. Poland was larger than Hungary or Czechoslovakia.

The Polish government was aware of the ongoing risks and sought a way out that would strike a balance between stability and reform. In Moscow, there was also weariness with the hardline stance against the protesters who, in essence, weren’t outright anti-communists but sought a more humane, free socialism.

The USSR had responded to liberal pressures mainly through repression since its takeover in 1917. The approach seemed no longer practical. It hadn’t stopped the cyclical political emergency upending the system. A different, more tolerant response was needed.

The chaotic and disordered combination of all these factors led, a few years later, to an attempt at reform under Gorbachev. These reforms ultimately failed, evidenced by a coup attempt by hardliners, and 12 years later, the USSR came to an end.

China 2012

In 2012, China faced a similar predicament. For 30 years, China had experimented with a different formula from the Soviet model, gradually granting economic and personal freedoms while suppressing political liberties. The Soviets had cracked down on economic and political freedom.

Practically, around the same time as Deng Xiaoping’s reforms in 1980, a protest erupted in Beijing, on the wall of the central Xidan district, demanding the “fourth modernization”—democracy. The protest was stifled but not forgotten. In 1989, it erupted again in Tiananmen Square.

In 1999, ten years later, the Falun Gong crisis emerged. And in 2012, nearly a decade afterward, the country was again in trouble. The police chief of the vital city of Chongqing, a close associate of Politburo member Bo Xilai, fled to the American consulate in Chengdu with a stack of secret documents.

The brother of Ling Jihua, a Politburo member and head of the office of the outgoing President Hu Jintao, also fled to the United States with a mountain of secret files. It was chaos, but more importantly, proof that the deal struck at the 2002 Congress—when President Jiang Zemin stepped down but only partially transferred power to his successor Hu Jintao—was failing.

The confusion of power between the old and new leaders was reminiscent of the clash between the old guard and the sitting Politburo that led to the Tiananmen protests.

The end of the USSR in 1992 had cast a heavy shadow over China. Democratic political reforms could spiral out of control, leading to the disintegration of the state, party leaders argued. In 2012, the party essentially saw only one way to restore order: concentrating power in the hands of its designated successor, Xi Jinping.

China 2025

Today, 13 years after that decisive turn, the country shows all the cracks of concentrated power. But politics is like that—nothing lasts forever. Chinese philosophy believes that the right policy is like rain at the right time: it shouldn’t come too early or too late, and it shouldn’t be too much or too little.

Yes, Chinese exports are booming, and its technology is advancing rapidly. But the domestic economy is in poor health. There is deflation; the real estate market, which has been the main economic driver for over two decades, has collapsed.

Bankers are considering zero interest rates to stimulate sluggish growth. This is crucial as the world battles inflation and high interest rates. The deficit in Chinese local governments and State-Owned Enterprises is ballooning, as is the debt-to-GDP ratio.

But these people, who have lost so much money, don’t vote and have no voice. Mid-level officials also resent pressure from above and have no room to make side money (as they could before). Young graduates cannot find jobs, and so on.

All this manifests as people “lying flat,” or tanping—letting things rot, fanglan; it means that people do not spend or save as much out of fear of the future. Many entrepreneurs have stopped investing, and growth is driven mainly by infrastructure projects that expand internal debt, leading to increased inefficiencies and wasted resources. And so on.

But does this translate into active opposition within the Central Committee—the body that could potentially remove Xi? No. Because these officials believe that to fix the problem, they’d need to remove the “big man.” But this is a highly hazardous operation, attempted a few times with no success, and often leading to the demise of the rebels.

Moreover, there’s a broader calculation at play. The system is built around the emperor—if you bring him down, will the system survive? If it doesn’t, the officials risk losing their posts along with the leader. As an act of self-preservation, they defend the emperor, no matter what.

The middle class is in a similar situation: their homes have lost half of their value, and their savings have diminished dramatically. But half is better than nothing—especially in the event of a revolution. They still have a lot to lose, and revolutions are fought by people who have nothing to lose but their chains.

During Tiananmen, people came to the square with bicycles left unlocked in the corner, and they grabbed the first one they saw on their way out—they didn’t even own a bike. It was almost the same in 1999 during the anti-American protests following the Belgrade embassy bombing.

They had nothing to lose, but everything to gain from a revolution. Now, many (most) have something to lose, and the gains are uncertain.

No democratic weather

Plus, there is a different international climate. For decades, the ideals of freedom and equality went hand in hand. In Budapest. Prague, Warsaw, Moscow, or people in Xidan and Tiananmen Square wanted democracy. Because all thought democracy was good.

Now democracy doesn’t carry much water. The US tried to export it like it was a technology, a mobile phone, to Islamic countries and got rejected. That might have instilled the virus of doubt in the West.

Indeed, there is also the new neo-traditional right coming from Russia and the new anti-democratic and neo-conservative sentiments growing across the Atlantic. US President Donald Trump is not so hot on democracy, and so are many radical right leaders in Europe.

The West lost the ideal of an egalitarian society with the failure of the Soviet Empire, and soon after, the light of liberalism apparently also dimmed. Western societies sought social democracy in the 1960s and 1970s, when they were affluent, had many children, and significant disparities marked the global distribution of wealth between nations. Developed countries were safely rich; developing countries were “third world”.

Now, rich countries don’t have children; people have wealth expectancies lower than those of their parents. There is a sense that present affluence will be taken away, and the flow of migrants with different cultures, habits and ambitions knocking on their door and begging for money at every street corner is a practical sign that it is happening. The ideal is not democracy, or greater egalitarianism. It is merely a matter of survival, holding on to their present state.

International and national environments converge. As a result, there’s no active opposition in China. Therefore, Xi holds more power than ever before. Can this situation last? For how long? What could be the tipping point?

These are questions for the future. But North Korea also serves as a warning: coercive governments can last longer than anticipated. Even without considering North Korea, socialist Vietnam and Cuba are still standing. China is bigger, and it has more and larger fissures, but there’s no certainty about what the future holds.

Why the rumors?

Still, some insistent rumors have been surfacing about Xi’s fall from power. There is no indication that it is the case; quite the opposite. His name is on the news every day, a stark reminder of his clout.

The party may be about to set up new government bodies. There is no indication that these bodies, of which we know little in detail, would constrain Xi in any meaningful way. Quite the opposite. They could help Xi to have a more efficient rule.

These organizations could help systematize and organize procedures to make administration more efficient. They will have new leaders appointed by Xi himself, who will report directly to him. He may have thus added a new layer of loyal officials handling other party and state functions.

Such bureaucratic reshuffles are always a double-edged sword: on one hand, they clarify procedures; on the other, they introduce new rigidity into an already stiff system. It’s not clear how they will work out. But overall, it proves that Xi is continually refining the system—evidence of his extensive power.

The reforms also demonstrate that the system requires some adjustments. Despite the official rejection of democratic reforms, some reforms are indeed necessary, and the administration doesn’t work too effectively. In China, it might be time to think something bolder, but the world doesn’t seem ready for it.

This article originally appeared on Appia Institute and is republished with permission. Read the original here.