Global Insight

March 4, 2013 4:00 pm
Xi’s task exposes limits of central control
Politicians, bankers and business leaders in the west often look at China’s system of market leninism with a touch of envy.

How far-sighted China’s leaders are with their five-, 10- and even 20-year plans. How efficient the system is without the hindrance of popular elections or pesky concerns over individual liberties.

Many of these admirers may expect visionary policies to be unveiled at China’s annual parliamentary session, which opens on Tuesday and will formally anoint Xi Jinping as president for the next decade by the time it closes on March 17.

But apart from some tinkering around the edges and a bureaucratic reshuffle of ministries, the session is likely to disappoint anyone who hopes for serious root and branch reform of China’s current political or economic structure.

Mr Xi is the powerful son of a Communist guerilla commander who also served at the top of the Chinese government. Perhaps the best way for FT readers to think of him is as the newly appointed chief executive of an enormous conglomerate who has worked for the company his whole life and whose father was a founding shareholder and lifelong senior executive.

Success in his new role depends to a large degree on the support of upper and middle management, many of whom he has known since he was a young recruit.

He will also have to contend with a shadowy board of directors made up of senior and retired civilian and military officials and their families who retain veto rights over major policy initiatives even after they have left the political stage.

There is not a scrap of evidence that Mr Xi harbours a secret desire to radically overhaul the current Chinese system and that is one big reason why he got this job in the first place.

But even if he was somehow planning to introduce major reforms, the chances are slim that he would be able to vanquish any of the huge array of vested interests that oppose change in almost every sphere.

The most illuminating expression of Mr Xi’s guiding ideology probably came during a visit to a Chinese military base in December when he said: “To realise the great rejuvenation of the Chinese nation we must fully achieve both a rich country and a strong army.”
Since taking over as head of the Communist party and head of the military in November, Mr Xi has done a masterful job of playing to his various constituents.

He has talked tough for the nationalists. He has talked about constitutionalism for the liberals. He has talked up private enterprise and the revival of the decrepit welfare state. And he has launched a hugely popular but so far superficial anti-corruption campaign.

But what he has also done is raise expectations of reform in China far beyond what he and his new administration will be able to deliver and that is likely to backfire in the end.

All across the Chinese political spectrum people are projecting their hopes and dreams onto him but the reality is that power in China is much less concentrated than it was in the days of Mao and Deng.

Far from being the all-powerful behemoth that some in the west admire for its omnipotence, the central government can often be oddly ineffectual and powerless.

A slightly frivolous but nonetheless instructive example is the government’s complete ban on the construction of golf courses that has been in place since 2004.

Since then the number of golf courses in China has nearly quadrupled. The point is that Beijing produces many well-intentioned laws and regulations that are often not implemented or enforced unless they directly align with the interests of cadres at the lower levels of state power.

The central government can impose its will and mobilise the nation when it absolutely has to but it uses up an enormous chunk of political capital every time it does that.

Because of this, China’s leaders tend to spend a lot of time giving positive speeches but they only really swing into action when faced with a serious crisis.

A good example was the Sars epidemic that emerged from southern China almost exactly 10 years ago and presented the now outgoing administration of Hu Jintao and Wen Jiabao with their first big test at the outset of their time in office.

After trying first to cover it up they finally responded by mobilising the entire country and eventually brought the disease under control. Mr Xi and his team have not yet been tested with their equivalent of a Sars moment but when they are it will provide more of an insight into their ability to govern the world’s most populous nation than the next two weeks of political pageantry in Beijing.

Copyright The Financial Times Limited 2013.

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