Peter Jones: All to play for in Chinese politics

EVENTS in the US will be eclipsed by tensions between change and the status quo following the Chinese ‘elections’, writes Peter Jones

Tonight, all politically attuned eyes will be focused on the American elections and the finely-poised contest between incumbent president Barack Obama and challenger governor Mitt Romney. But perhaps those eyes should be even more acutely centred on another “election” due later this week and which is arguably even more pivotal to the fortunes of the world, and our, economy than the US elections.

Unlike the US elections, the contest isn’t at all exciting as the outcome is already known. It is that Xi Jinping, a 59-year old veteran apparatchik of the Chinese Communist party will be elected to its new 370-strong central committee during the party’s week-long 18th congress. The committee will then meet and approve a new politburo, headed by Mr Xi as its general secretary in place of Hu Jintao. Next March in another totally predictable “election” at the Chinese People’s Congress, Mr Xi will become China’s president.

The interest, or perhaps more correctly, concern, is that China’s 1.35 billion people are the biggest nation on earth and their activity make their economy the world’s second largest. On some projections, it will become the world’s biggest economy in 2025, pushing America into second place.

The stability of China, about which there are growing worries, is therefore critical to global economic recovery.

The worriers include the Chinese political leadership themselves. They have seen the Soviet one-party rule model collapse and the bloody deposition of dictatorship in the Arab Spring. Some intellectuals have begun to wonder, based on the duration of Soviet communism and Mexico’s Institutional Revolutionary Party, whether 70 years is the lifespan for one-party rule and note that the Chinese Communist party will have been in power for seven decades in 2019.

A new development in this internal musing is that it has become semi-public. This autumn, some 70 thinkers were gathered together by the National Development and Reform Commission, the government’s economic development agency. Several of these intellectuals, reported one participant, felt that China was “unstable at the grass roots, dejected among the middle strata, and out of control at the top.”

These concerns have surfaced before, notably during and after the violent repression of student protest culminating in the Tiananmen Square massacre of 1989. Worries that this was the first phase of the same unrest that did away with the Soviet Union disappeared however as most Chinese become more interested in sharing the prosperity of the economic boom of the last 25 years which has seen its GDP double in size every 9 years.

Now, however, the boom looks to be petering out. Although the most recent indicators suggest that both manufacturing and services are continuing to grow, it is at a much slower pace. Manufacturing, unprecedentedly, has just been through three months of contraction, albeit very slight.

The importance of this is that Chinese growth has been a major factor in our economic growth. If it slows, then our economic recovery stalls, and if there is significant civil and political unrest in China, then our economy will go into reverse. Upon Mr Xi’s political and economic management, therefore, rests a lot of our fortunes.

He faces a tough job. The first signs of how he intends to tackle it will come with next week’s politburo line-up. There is considerable tension within the Chinese Communist party between those who want to liberalise and those who think a more traditional hard-line approach is the best way ahead. So the balance he strikes between these tendencies will be an important signal.

Both strands of thought agree that continued, and reasonably rapid, economic growth is essential to maintaining stability. The traditionalists have on their side the evidence of Tiananmen-style repression of political dissent which has kept a lid on dissenting unrest for a quarter century.

The liberalisers, however, point to the growth in Facebook-style social media and the increasing inability of the party to stamp out unwelcome radical thoughts and messages from being exchanged.

It also means that local complaints can turn into national cause célèbres and become the focus for widespread protest. Better, like tall bamboo shoots say the liberalisers, for the party to bend with the wind and survive than to be stiffly brittle and risk being snapped by a storm.

Quite where Mr Xi’s sympathies lie is totally unclear. Liberalisers read runes such as his wearing, for many years, a watch given to him by the Dalai Lama, as meaning he is on their side. Mr Xi, however, said last year that “speeding up all development”, rather than loosening China’s grip on the country, “holds the key to resolving all issues in Tibet”.

Of the path he may take, only one thing seems reasonable clear. Mr Xi clearly regards corrupt party officials with great distaste.

His own record appears to be remarkably corruption free and since the abuse of power by local officials is a big feature of Chinese social media, cleaning that up would serve the dual purpose of boosting his popularity and removing reasons for dissent.

That may work for him for a while, but the basic problem of how to distribute some of the party’s power to the people without destroying it will remain.

There are some very basic elements of democracy entering Chinese political life. Some communities, including the village of Xiajiang, adopted by Mr Xi for occasional visits to emphasise his claims to be a “son of the yellow earth”, require candidates for party secretary to have the support of the majority of villagers.

But more rapid growth of democracy seems most unlikely. As with his comment on Tibet, his preoccupation is likely to be with economic growth which has legitimised the party in the eyes of the hundreds of millions of people who are now middle-class, or “basically well-off” as the Chinese description translates.

Stalling growth means putting a brake on not just their aspirations, but also those of the hundreds of millions who want to join them, and on the extension of basic health and education services which are now reasonably widespread.

How Mr Xi can keep his foot on the accelerator is as important for us as how re-elected President Obama (my bet) gets the new Congress to resolve the fiscal crisis America faces in January.

We live in extremely interesting times which, as most readers will know, is an ancient Chinese curse, not a blessing.