Books

12.31.13

The Person of 2013 Is… Xi Jinping

Time magazine picked the pope, but look to China and you’ll see a new leader playing for big stakes at home.

In the league of major global power players nobody has had a stronger year than Xi Jinping, the stocky, 60-year-old boss of the world’s rising superpower. Since becoming head of the monopoly Communist Party 13 months ago, he has established himself as China’s strongest leader since Deng Xiaoping and aims to carve out a historical role for himself to equal the man who set the world’s most heavily populated country on its rise to become the world’s second largest economy.

In the past year he has imposed himself on a wide variety of front—going after potential political opponents, stamping down on dissidents and media, cracking down on corruption, ordering officials to live more frugally, conducting campaigns to enforce ideological uniformity, holding summits with Obama and Putin, taking a tough line with neighbouring nations and holding up the Soviet Union as a dire warning of what happens when a one-party state relaxes control. Having set out to establish his political strength, he has now turned to the economy, shouldering aside the Prime Minister, Li Keqiang, to put his name in top place on a statement of 60 decisions taken at a key meeting of the Communist Party Central Committee Plenum in November which call for reform and modernization.

With his term at the top set to stretch to 2022, Xi is playing for very big stakes. Spectacular economic growth has underpinned the rule of the Communist Party since Deng introduced market mechanisms at the end of the 1970s. But the Deng equation of cheap labour, cheap capital, and strong export markets no longer works; wages and other manufacturing costs have escalated, as has the cost of capital while overseas demand is not what it used to be. Growth depends far too much on fixed asset investment, notably in infrastructure and real estate construction. The state sector is too big and inefficient. Credit is misallocated on an enormous scale.

China’s First Lady is a fashion icon—a handbag she carried on a foreign trip with her husband this spring sold out immediately on Chinese e-commerce sites.

Xi knows change is essential—but he also fears that tinkering with the way the Party State runs could lead to something like the process that brought the implosion of the Soviet Union. He is ready for reform, so long as it does not spill over into politics. He wants to make China the equal of the United States but he also is intent on keeping it as the last major nation ruled by a Communist party.

It is a task made all the more formidable by the way in which the Party reaches into every corner of China—all companies of any size, for instance, have a Party cell which can veto business decisions. The explosion of wealth in the last three decades has bred powerful vested interests, including both the big state enterprises and the families of top leaders, and they can be expected to fight against change that would threaten their privileges. The Plenum proposed using ‘the dynamism of the market’ but also insisted, in the language used at such meetings, that ‘we must unwaveringly consolidate and develop the public economy, persist in the dominant position of the public ownership, give full rein to the guiding function of the State-owned economy, incessantly strengthen the vitality, control power and influence of the State-owned economy.’ Are the two compatible? Can the market and the state co-exist or will the former have to give way to the politically-backed power of the second?

Xi shows every sign of confidence that he can square that circle—and others that confront him. State president and head of the military as well as Communist Party General Secretary, he looks a natural leader, in sharp contrast to his über-bureaucratic predecessor, Hu Jintao. He is the son of a first generation Communist leader who served under Mao Zedong before falling foul of the Cultural Revolution—when Xi was sent to live in a cave and look after pigs. After his father was rehabilitated to a senior role under Deng, the son worked his way up through a string of provincial posts before being promoted to the all-powerful Standing Committee of the Party Politburo in 2007 as Hu’s heir apparent. Chief of the ‘Princelings’, as the children of first generation Party leaders are known, he is said to have exuded a sense of entitlement and authority from his teens, according to somebody who knew him then. 

Unlike the buttoned-up Hu, he is sufficiently sure of himself to display a personal side in public. At the Sunnylands summit with Obama in California in June, he appeared in short sleeves and sported as many grins as the US President. This autumn, Chinese media ran a photograph of him caught in a downpour while inspecting a river port—like any ordinary person, he was holding his own umbrella and had his trouser legs rolled up, showing his black socks. His wife, Peng Liyuan, was a hugely popular singer in the army entertainment corps (she has the rank of major-general) but she stopped performing when her husband reached the top. Now 51, China’s First Lady is a fashion icon—a handbag she carried on a foreign trip with her husband this spring sold out immediately on Chinese e-commerce sites.

For all the human spin Xi knows how to spread, there is no doubt that he is, first and foremost, a resolute power player who has taken on an enormous gamble. China’s rise has bred a belief that it is bound to dominate the world before long; Xi, himself, has set out a ‘China Dream’ of national rejuvenation to be achieved during his watch; one aim which is becoming increasingly clear is to establish his country’s supremacy in East Asia, elbowing aside Japan and the United States.

As I argue in a new book, the vision of Chinese domination of the present century is a mistaken extrapolation of the recent past into a far more challenging and uncertain future. China’s domestic problems are monumental, ranging from the need for economic reform to an unparalleled environmental disaster, from the demographics of a rapidly ageing population to an estimated 150,000 popular protests each year, from enormous wealth disparities to the expanding quality of life aspirations of the urban middle class heightened by social media connectivity. China is still militarily far behind the US and faces the threat of a more assertive Japan in a region context rendered unstable by competing sovereignty claims and the unresolved issue of North Korea, the ‘Little Brother’ Beijing cannot control.

China’s economy will remain dependent on imports of raw materials. It lags behind the US in innovation. For all the money it spends on soft power, demonstrators take to the streets in the Middle East, Africa, and Eastern Europe to call for Western democracy, not the installation of a Chinese system. It is a safe bet that more Chinese are learning English than foreigners are studying Mandarin.

China is no exception to Tip O’Neill’s dictum about all politics being local, even if, in this case, the locality contains 1.3 billion people. The country will not suffer the collapse which some commentators have forecast for more than a decade. Xi will continue to walk tall on the world stage and to pump Chinese nationalism, especially against the old enemy, Japan.  But he has enough on his hands at home without aiming for the number one global slot. As the US has found, world domination is not a feasible project any more, if it ever was.

Of course, if things turned sour in the People’s Republic, the temptation to indulge in diversionary foreign forays would grow. But, for the moment, China’s leader has shown himself an extremely accomplished accumulator of power; now we have to watch what he does with it.