View Full Version : After US elections, it is China’s Party - S P Seth - 21st November 2012

21st November 2012, 09:16 AM
Even though China’s finances are in a much better shape than the US with foreign currency reserves of over three trillion dollars, it appears to be losing economic momentum

By a strange coincidence, the United States and China have been going through a leadership transition at about the same time. And what a contrast! In the US, where Barack Obama has been returned as president for another term of four years, the election was a high political drama played out in the public space with both rival candidates making their own pitch for the popular mandate. It was a chaotic and boisterous affair with a long drawn-out pre-election battle, with neither candidate knowing for sure his political destiny until the end.
In China, the meeting of the 18th Party Congress to formally anoint a new leadership for the next 10 years was very carefully choreographed and controlled without popular participation and lacking any sense of political drama. It has been known for quite sometime that Xi Jinping, vice-president, will succeed Hu Jintao as the Chinese Communist Party’s (CCP’s) secretary general and the country’s new president early next year, and Li Keqiang, a vice-premier, will replace Wen Jiabao as premier. And this has come to eventuate, as well as a seven-member standing committee (the country’s apex governing body), a new politburo and central committee. This is China’s top political structure for the next 10 years.
China’s economy is now the world’s second largest though, in the last few years, its growth rate has slowed. The country’s frantic economic growth in the last 30 years, with many millions lifted out of poverty and a rising middle class, has created some severe structural and societal problems. Hu Jintao, the outgoing party secretary general, highlighted some of them in his work report to the Congress, with special emphasis on corruption in the higher echelons of the party
He warned that, “If we fail to handle this issue well, it could prove fatal to the party, and even cause the collapse of the party and the fall of the state.” He added, “All those who violate party discipline and state laws, whoever they are or whatever power or official positions they have, must be brought to justice without mercy.” Apart from being a general statement of intent, this seemed like a pointed reference to the case of the dismissed Chongqing party boss, Bo Xilai, who will soon be tried for corruption and other charges.
The pertinent question though is why didn’t the outgoing party leadership deal with this issue during the last 10 years they were in power, when Premier Wen Jiabao was singling it out as a major issue for some years now? During all this time corruption has grown like a virus infecting the entire body politic of the country, suggesting a serious disconnect between rhetoric and action, which would suggest that corruption is now deeply entrenched in the system at all levels, preventing any serious action to clean it up.
Indeed, a recent investigative report in The New York Times has found that Premier Wen Jiabao’s family (without pointing a finger at the premier himself) has amassed nearly $ 2.7 billion worth of assets through all kinds of direct or indirect business deals, which, of course, has been vigorously denied, and termed as an attempt to destabilise the country. However, the Chinese authorities have blocked any access on the internet to The New York Times’ report. Similarly, it is reported that the new party secretary general Xi Jinping’s family too have helped themselves to a billion dollar fortune.
Whether or not these reports are true or tendentious, the question of corruption in the party, as highlighted by Hu Jintao in his report, is a make or break issue not only for the party but also for the Chinese state. Xi Jinping, the CCP’s new secretary general (and the country’s new president from early next year) has also highlighted the danger from corruption for the party as well as the state. However, he too has not unveiled any new strategy to root out this monster.
Apparently, it is a very sensitive issue and any radical action might not suit all the stakeholders. But without an effective strategy, backed up with necessary institutional changes like greater political transparency and accountability, this is likely to aggravate social unrest in China. With economic growth slowing, even as the wealth gap widens between rich and poor and between urban and rural areas, the government cannot afford to let this issue become a trigger for spontaneous social combustion like the Arab Spring in the Middle East.
In whatever way the CCP tackles social, economic and political issues, China today is undoubtedly a powerful country. And this is due to the economic reforms since the 1980s under Deng Xiaoping. What should be the next course of action to propel the country’s economy is a divisive issue in the party. The Bo Xilai affair was a manifestation of it, as he unfurled Mao’s red banner against economic liberalisation. Wen Jiabao, the outgoing Premier, on the other hand, has been a strong proponent of further economic liberalisation, as well as some political reforms. In his report to the Congress, Hu Jiantao too emphasised the need for economic and political reforms, but again without any clear direction.
However, there is one issue that broadly unites the country and that is to build up a strong military to assert China’s national power. Hu Jintao stressed the need for China to build a “strong national defence and powerful armed forces”. Apparently keeping in view China’s maritime disputes with some of its neighbours, he didn’t mince his words when he said, “We should enhance our capacity for exploiting marine resources, resolutely safeguard China’s maritime rights and interests and build China into a maritime power.”
It is interesting that even though China’s finances are in a much better shape than the US with foreign currency reserves of over three trillion dollars, it appears to be losing economic momentum, not knowing how to break the logjam between its competing political factions in the party. In an altogether different political landscape from China, and despite Barack Obama’s re-election as the country’s president, the US is also stuck in a rut of sorts. Against this backdrop, when there are no easy solutions to internal problems, there is always a danger of hyper-nationalism getting out of control, especially in the volatile Asia-Pacific region. And this is a challenge for both China and the US.