It's All Xi, All the Time in China as Party Influence Expands
“Chairman Xi is a descendant of the revolution”
(Bloomberg) -- “Chairman Xi is a descendant of the revolution,” said Liu Yanbin, as he paid a visit to a Chinese revolutionary shrine in Xibaipo, some 350 kilometers (220 miles) from Beijing.
A true believer, the 30-year-old from the surrounding province of Hebei worried that young Chinese were clueless about what the revolution was really about. “China wasn’t just poor before, it had backward ideas,” he said, before bounding up the steps toward the monument.
President Xi Jinping seems worried, too. That’s why Xi got China’s parliament to pass sweeping changes to the constitution Sunday, repealing presidential term limits so he can rule indefinitely. He’s also taking other measures to dramatically expand the Communist Party’s role in daily life.
Since taking power five years ago, Xi has reasserted the party’s supremacy, with himself as its “core” leader. That has meant greater control over personnel and strategy at state-owned enterprises, which control about 40 percent of the nation’s industrial production, as well as schools and universities.
Speaking at a party meeting in October, Xi revived a phrase from Mao Zedong and declared, “east, west, south, north and center -- the party leads everything.”
Xi’s chief policy-making instrument has been an increasing array of party “leading small groups,” which set and coordinate policy. He’s overhauled the bureaucracy to make the party more dominant, while also giving it a far more prominent role in business.
In practice, this has seen the government promote a presence for party committees in companies. Some state-owned enterprises such as FAW Car Co. and Sinoma Science & Technology Co. changed their company bylaws to provide a greater role for party committees.
The changes are impacting foreign companies and their joint ventures, too. The vice minister of the party’s organization department, Qi Yu, boasted in October that some 70 percent of the 106,000 foreign firms operating in China already had party committees.
“Companies are concerned establishment of a party unit in the company means the party would play a role in companies’ operational decision making -- leading to decisions made for political rather than business reasons,” said Jacob Parker, vice president of China operations at the U.S.-China Business Council. “We are concerned about that. Introducing political objectives and management roles into foreign invested enterprises is not a positive step for businesses.”
Historical Shift
Xi’s push flies in the face of China’s post-Mao history. Former leader Deng Xiaoping warned against “replacing the government with the party,” and in the 1980s the architects of China’s economic opening sought to separate party and government functions following the catastrophic policy failures of the 1950s and 1960s.
Such changes fed hopes in the West that China would continue to liberalize as it grew richer. Now, as Xi reestablishes the central role of the 89-million member party, he’s upending those expectations.
“The party was always a little bit of an Oz behind the curtain. You knew it was there, but you didn’t have many manifestations of its power and role,” said Jude Blanchette, senior adviser and China practice lead at the Crumpton Group, a Washington-based advisory firm. “After the end of the Cold War and the Soviet Union, it was in China’s interests to put the sickle and hammer away and instead re-brand the party as technocrats in business suits. That feeling has clearly been completely destroyed.”
Xi’s changes are beginning to challenge the rules of everyday life. During an October advisory board meeting for Tsinghua University’s School of Economics and Management, Xi described his vision for education. He said it exists to “develop builders and successors to the cause of socialism with Chinese characteristics, not bystanders or opposition groups.”
Universities have introduced additional classes on Marxist theory and inspection teams fanned out across campuses last year to check on the “ideological and political work” of teaching staff.
Taking the party back to the good old days won’t be easy. Xi has inherited a society of 1.4 billion transformed by 40 years of economic reform. China -- now the world’s second largest economy -- is more complex and individualistic than Mao left it.
For many Chinese of the boom generations, Xi’s reversion to party orthodoxy is jarring.
“I don’t pay that much attention to party slogans,” said Haze Gong, a 28-year-old teacher from Jiangsu. “In the beginning, everyone was poor and everyone had to share,” she said. “Xi’s thought reminds me of older generations, but the situation is very different now.”
Overseas Chinese
Xi’s expansive vision for the Communist Party extends beyond China.
David Gitter, director of the Party Watch Initiative at the Washington-based Project 2049 Institute said the party has stepped up “united front” efforts to influence other countries by “guiding” overseas Chinese communities to support the party’s agenda. It’s also courting opposition parties to support Beijing’s territorial claims in the South China Sea and beyond, Gitter said.
“The CCP’s influence operations have enjoyed increased prominence under the Xi Jinping leadership, and the CCP International Department and the CCP’s United Front Work Department are leading the charge," he said.
There’s a chance that Xi’s desire to double down on China’s Leninist political system ends up undermining the economy.
Xi is trying to upgrade production through initiatives such as Made in China 2025 -- an ambitious plan to make the country an innovation leader in sectors ranging from aircraft to new energy vehicles and biotechnology. It’s not clear whether he can achieve those goals in an environment of increasing ideological control under the party.
“Political and economic control is in the DNA of the party, whereas entrepreneurship and innovation require robust amounts of flexibility, unpredictability, and a tolerance for uncertainty,” said Blanchette, of the Crumpton Group. “If the party wants to foster innovation, it will first have to release some of its grip over how resources are allocated.”
At a party meeting in October, Xi broke with 25 years of succession norms by declining to nominate a clear successor. He also enshrined his “core” status in the party’s governing charter and became the first leader since Mao to have his personal “thought” written into the constitution during his lifetime.
In December, the party’s Central Committee approved 10 research centers to be set up to study Xi’s new thought in December, according to the official Xinhua News Agency. Earlier this year, state media began the widespread promotion of an online video titled “The People’s Leader,” using language that evokes Mao’s cult of personality.
In the longer term, there’s a risk that Xi’s power grab will undermine the fragile political balance that has kept the party in power. His moves have left no heirs-apparent and weakened potential alternatives such as Premier Li Keqiang.
“The more a political system comes to depend on fewer and fewer people, the more imperative it is that those people remain in the system,” Blanchette said. “If something were to happen to Xi -- a 64-year-old man -- do we really believe that political system would peacefully transfer power over to Li Keqiang?”
--With assistance from Keith Zhai Dandan Li and Allen Wan
To contact Bloomberg News staff for this story: Peter Martin in Beijing at pmartin138@bloomberg.net.
To contact the editors responsible for this story: Brian Bremner at bbremner@bloomberg.net, Brendan Scott at bscott66@bloomberg.net.
©2018 Bloomberg L.P.
With assistance from Peter Martin