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Xi Jinping - The Emperor's New Clothes

Xi Jinping - The Emperor's New Clothes
 François Godement
Special Advisor and Resident Senior Fellow - U.S. and Asia

Policy developments for the past few weeks in China confounds generally held rational expectations about the CCP's rule over China. The first expectation is that a CCP Congress sets the political line for the next five years. In truth, this has often not been the case. Congress resolutions are a snapshot taken at a given moment and provide the background noise for what matters most - the actual line-up at the top. Think of the 7th CCP Congress - extolling New Democracy within a United Front with the Kuomintang in 1945 - replaced in 1949 by the "People's Democratic Dictatorship"; or the 8th CCP Congress, replayed in a "second session" several years later, or still the 9th CCP Congress, with Lin Biao as the revolutionary successor only to disappear less than two years later. The 10th Congress in 1973 was quickly upended by the Gang of Four's ascent, itself thwarted by an alliance of the elders. Examples of discontinuity around a CCP Congress abound.

By comparison, the policy turns since the 20th Congress closed on October 25, 2022, are less earth-shaking. But they remind us of what shouldn't be a second surprise. Contrary to narratives from the CCP's "publicity" department, stability and continuity of policies are never ensured, for the better or for the worst. A totalitarian system, and even more an all-powerful individual, can decide sudden policy turns. A submissive apparatus will quickly enforce these. The same apparatus would be at a loss with a more nuanced policy, and cannot plan any adaptation in advance of top policy decisions: Covid is a perfect case of this totalitarian pathology.

But there is a third surprise or paradox. Xi Jinping has prematurely retired those among his colleagues who had, at any given time, shown signs of openness to broader reforms. This included both Li Keqiang, Prime Minister with technocratic talent but little panache, and Wang Yang, once the darling of Party reformers, very discreet since 2012. And he promoted close associates from his past - plus some new technocrats essentially linked to aerospace industries. Yet Xi has clearly taken on board some of the debates that came up officially or in expert circles around policies. It is change without the proponents of change, although it would be a stretch to call this reform.

Speculation about a power shift at the top

There have been rumors that these changes are nearly equivalent to a palace coup, and that Xi is not in control of many domestic policies at this point. At any rate, he has backtracked on several issues. At the 20th Congress, he charged his predecessors with poor implementation of policies, and Hu Jintao’s forced exit from the Congress hall remains in all of our memories. But during his New Year televised address, the background included pictures of some of his predecessors, fully decrypted by the People's Daily in case viewers had missed the point. Jiang Zemin’s death has been the occasion of a pointed tribute by Xi. China's official media and propaganda now tend to reduce the overwhelming public presence that Xi has had for years at the top of the news.

It is more likely that Xi is not eager to stand up as visibly in front of the entire leadership as China navigates a Covid tsunami. 

Were there other portents of division at the top or in the ideological discourse? This might be a marker of factional strife underway. But there is none to see. It is more likely that Xi is not eager to stand up as visibly in front of the entire leadership as China navigates a Covid tsunami. On balance, the changes would therefore not be a sign of factional weakness on the part of Xi, but on the contrary, that a dominant Xi can afford to reverse some of his own policies without damaging his power. 

Left, then right, (then left?) is also a leaf from Mao's book. Beneath the ideology and struggle mania that Xi has promoted in the past decade, there is also a whiff of the pragmatism and opportunism that he had to practice as he came back from a political no man's land to climb up the ladder of power. He has prided himself on putting practice above theory, being flexible on tactics (not strategy), and listening to the masses, a talent gained during his long rural experience.

Amidst the recent changes, he has also reminded the public that he knew how to deal with private enterprises as a provincial leader in Zhejiang. The inflexible Xi can also prove to be a chameleon. The extent to which demonstrations against lockdowns (or even against him in large cities and universities) have had is hard to tell. Beyond some ritual mentions of subversion by the West, there hasn’t been a major ideological counter-offensive.

Covid: the 180° turnaround

Of all policy changes, indeed, the most striking is the complete reversal of the zero-Covid target that had been a signature policy for Xi. The substance of the change should be distinguished from the form it has taken. Mitigation of zero-Covid, described as "dynamic zero-Covid", had been decided in the spring of 2022, essentially in the interest of preserving agricultural crops, industrial production for exports and key logistical nodes. The zero-Covid dam against the pandemic had not been seriously breached - at a large cost to the economy and to the personal (non-political) freedom of the population. The casualty count, even if it was not as low as the official numbers, cannot have been of a different order of magnitude. The brutality of the zero-Covid measures is another story. These ranged from nearly daily testing to go outdoors, to lock-up in apartment buildings without adequate food supplies in some cases, and of course, to the nearly total restriction of international travel.

But the virus finally won the "war" that Xi Jinping, following his customary bent, had declared on Covid. This is a result of the coincidence of "dynamic zero-Covid" with the emergence of ever more contagious sub variants of Omicron in China. There is talk of a replication rate as high as 22 to 1, much higher than any previously known variant. As can be seen from the rising tide at hospitals in major cities, the virus was already spreading before the zero-covid policy was reversed. This has also been acknowledged by the World Health Organization. As with other changes described below, a rigid line had been enforced until the 20th Congress.

The zero-Covid dam against the pandemic had not been seriously breached - at a large cost to the economy and to the personal (non-political) freedom of the population. 

But no containment policy was going to prevent an epidemic wave with such high replicability of the virus, not to mention the lower efficiency of Chinese vaccines compared to mRNA types, and the low vaccination rates for elders. On balance, it seems that Xi broke with a policy that was - finally - failing. Doing away with zero-Covid is also meant to keep the economy going - provided, of course, that the casualty level remains limited and confined to the elderly population.

Adjusting economic policy

In a separate but related development, there have been several changes in economic policy. The most prominent is a high-cost rescue of the construction and housing sector, which has been undergoing a major crisis of its own since 2021. Previously, there had been a marked reluctance to open-handed credit rescue, a reluctance justified by the repetition of Xi's celebrated words of 2017 - "houses are for living, not for speculation". The can was kicked downwards to local authorities, the ultimate beneficiaries of previous land sales. In view of the slowdown of China’s domestic economy caused by the pandemic, refinancing by the state and banks has become much more flexible. This is seen as a prerequisite to improving economic growth.

In view of the slowdown of China’s domestic economy caused by the pandemic, refinancing by the state and banks has become much more flexible.

Also, a new plan to expand domestic demand over the years 2023-2035 now lists the promotion of consumption as the first in a long inventory of goals. Previously, there had been much reluctance to income redistribution and most forms of social subsidies. These were publicly declared by Xi Jinping to be the attributes of laziness and decline in Western societies. Although concrete developments have yet to follow, there are now some mentions of the distribution of cash coupons to boost consumption.

There are also currently fewer adversarial developments regarding China's platform economy, which has been a target of Party policy over the past three years. Finally, this year's December Central Economic Conference failed to highlight "common prosperity", a Xi motto of the past few years.
Yet Xi Jinping is careful not to make any self-criticism regarding the previous economic policy. His New Year speech announced a 2022 GDP figure that implies a growth rate of 4.4% in 2022, when foreign analysts, and Chinese official sources for the first three quarters, were at or under 3%. Real or doctored, this new figure is a break with Xi's line during the 20th Congress that economic growth was no longer the primary concern.

China's public diplomacy softens up

In the absence of more concrete economic policy changes, this has less international impact than what appears to be a rebranding of China’s public diplomacy. The rebranding is apparent at several levels. The latest instance is the selection of Qin Gang, China’s ambassador to the US. A former MoFA spokesman, Qin has not been participating in episodes of the "wolf diplomacy" that some other Chinese diplomats practiced. He is sharp-spoken, however, and rumors about his family background make him a son of Li Tieying, a former Vice-Prime Minister and Politburo member also responsible for education who was close to Li Peng during the Tiananmen events in 1989, and who was himself the son of Li Weihan, a 1930s revolutionary hero of the CCP. That would explain the other rumor, that Qin had closer contact with Xi Jinping than the current incumbents in charge of foreign policy.

Before this, other signs of a new public line had emerged. First, the resumption of so-called second-track dialogues in the United States and Europe. These are taking place for the time being with trusted friends of China as intermediaries, such as Evan Greenberg, the son of America's leading pro-China businessman over the past seventy years, or with business interests, for instance in Brussels with BusinessEurope.

China's international communication has again turned towards the language of win-win relations.

It is striking, however, that some well-known foreign policy experts who have not always toed the official line have traveled recently and visited foreign institutions that are definitely not on Beijing's preferred list. Even more generally, China's international communication has again turned towards the language of win-win relations. Formal overtures have been made to Australia and Japan. Even Taiwan deserved less aggressive remarks in Xi Jinping's New Year speech this year. With the United States, the crisis in relations is often put in the past tense. With Europe, the talk is now of opportunities, contrasting with the shrill language of the past years.

What is behind this turn in official language? One is tempted to make a parallel with perhaps the most striking utterance by Xi Jinping in his televised New Year speech. Regarding Covid policies, he said that "it has not been an easy journey for anyone", and "it is only natural for different people to have different concerns or hold different views on the same issue". In both cases - Covid and international relations - there seems to be a realization that the hard-line approach has run into a wall. The blank sheets of paper held up by many urban residents as signs of protest, and in the international arena the overwhelming unpopularity of China in almost all democracies, coupled with major rearming across Asia, have perhaps been understood as signs that Beijing's rigidity and aggressive communication were backfiring. Yet some changes in public propaganda were likely prepared before recent events. For instance, Le Yucheng, a Vice Foreign Affairs Minister who was often seen as a relatively moderate candidate for the minister post, was shifted instead to the leadership of China's National Radio and Television Administration, a top propaganda job, in June 2022. 

In both cases - Covid and international relations - there seems to be a realization that the hard-line approach has run into a wall. 

Although this was seen as a demotion then, it could very well have been a preparation for a softer public diplomacy line. Signs that China had not approved, and not even known in advance, Russia's February 24 invasion of Ukraine, were already given on the second track by Chinese experts in the spring of 2022.

In a regime where ideology and propaganda have key roles, these shifts matter. It will be a long time, however, before China's population and elites recognize the changes as real and dare to express criticism. Internationally, the change in language has to be checked with facts on the ground. At this point, there is not a single concession by China that can be cited on any ground. The fact that China's public speech does not assault very prominently the Biden administration’s October 7 restrictions on semiconductor exports and related aspects of technology and know-how transfer is not a sign of moderation. In the past, for example, when the United States started to deploy anti-missile systems in East Asia that were a direct threat to China's nuclear deterrent, China also did not emphasize the challenge it represented: the PRC often eludes the most challenging strategic threats in its own propaganda, in order not to acknowledge weakness.

A major unknown comes from the future of Russia's war on Ukraine. With Russia, China's entire narrative about responsibilities for the conflict toes Russia's line. The two countries have recently undertaken joint naval maneuvers in the East China Sea facing Taiwan and Japan. This, however, may be more of a Russian than Chinese gesture as Putin separately clamors for more military cooperation in his last virtual meeting with Xi. China derives economic benefits from Russia's new situation, but it is hard to single out China, since countries such as India and even the EU have increased their imports from Russia in 2022. Other side benefits such as the major entry of China into Russia's auto market are just ahead of a global trend for Chinese automakers. As much as information is publicly available, China, unlike Iran and North Korea, is not said to provide weapons to Russia. The spurt in semiconductor exports to Russia, however, may raise questions in this context. In any case, these trade trends predate the 20th Congress and do not seem to shift again. What is sure is that the Ukraine war is a major test for great powers. China could emerge comforted if Putin's Russia consolidates its hold. It may benefit from a long war that will divert some attention from China and East Asia. It would definitely suffer a strategic loss if Russia was defeated beyond a certain point, and even more, if Putin’s regime was threatened from the inside.
More than the hypothesis of a sudden power shift at the top, more than the dream of a sudden conversion by Xi to some reform policies, the most likely hypothesis is that he has perceived a change in relations among great powers that is definitely not going in a direction that would be favorable to China. The resolve among American and European allies, Russia's setbacks which include some lessons for Taiwan, the vigor of the Biden administration's high technology decoupling, and the rise in military budgets around China, all have consequences for the People's Republic. In several key areas, Xi Jinping has perhaps decided to lessen immediate risk-taking and to offer less of a target to those that he sees as adversaries, outside and inside China. How the system deals with Orwellian changes in language is another matter, but this is routine work for totalitarian systems.
Of course, there is much that we ignore concerning potential turns within the top leadership, and we must be attentive for any telltale signs. The above interpretations are still hypothetical.


Copyright image: WANG Zhao / AFP

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