Minxin Pei
The Indian Express
November 28, 2012
Authoritarian regimes have two well-known fatal flaws that explain their instability and lack of durability. The first one is the absence of rules governing succession. As a result, conflict among the ruling elites when power is transferred from one generation to another frequently brings down the oligarchy. The second flaw is “adverse selection” — such regimes have the propensity to attract opportunists and risk-averse careerists who colonise the upper echelons of power. The consequence is progressively weaker leadership at the top.
As the Communist Party of China (CPC) has just completed its once-in-a-decade transfer of power from Hu Jintao to Xi Jinping, the most important question to ask is whether the CPC, famed for its capacity to learn and adapt, has managed to overcome these two flaws this time.
Regrettably, the best answer we can come up with is a mixed one.
On the positive side, the transfer of power from Hu to Xi this time was, in nominal terms at least, complete and proper. Hu retired as the general secretary of the CPC and the chairman of the CPC’s military affairs committee (the equivalent of the commander-in-chief). He will quit the presidency of the country, a purely ceremonial position, in March next year. By leaving his position as commander-in-chief, Hu not only created a historic precedent — his two successors kept the position for two extra years after retiring from their party posts — but also signalled that Xi is now in complete control of the two more important formal positions in the party. In this sense, the succession should be judged a success.
Because of Hu’s full retirement, Xi will spend less time consolidating power. This also avoids a potentially destabilising rivalry between Hu and Xi. In addition to this positive outcome, Xi must be pleased with the reduction of the size of the Politburo Standing Committee, the party’s top decision-making body. The committee used to have nine members; now it has seven, making it easier for Xi to form a coalition. Decision-making at the top in China is by consensus. The smaller the size of the committee, the easier it is to arrive at an agreement.
Based on these two outcomes of the just-concluded party congress of the CPC, it is fair to say that the worst scenario — Hu’s semi-retirement and the continuation of a nine-member standing committee — did not happen. Apparently, this time at least, the CPC has shown that it can still handle succession, however opaque the process is.
But producing a leadership team does not mean that the party has picked the right leaders. In other words, we need to examine whether the party has overcome the curse of “adverse selection” as well.
On first impression, Xi as the new leader seems to have done well. His remarks at the ceremony unveiling the new leadership team were simple, direct, and devoid of the arid slogans characteristic of his predecessor. He emphasised that his team would put people’s needs for a better life — housing, education, jobs, health, and the environment — on the top of its agenda. He also came across as a more confident leader.
Since China has endured a decade of growth without reform, Xi should have a reservoir of goodwill among the people. However, it is important to remember that Xi is merely first among equals. To implement much-needed economic reform to address China’s economic slowdown and looming banking crisis, he will need support from the rest of the standing committee.
Unfortunately, when we look at the make-up of the new standing committee, we are reminded that the law of “adverse selection” continues to apply to the way the CPC picks its leaders. On the whole, the new committee is filled with conservative or risk-averse apparatchiks who were apparently selected by their patrons to watch out for their interests, not to advance a progressive reform agenda. The person most respected by the business community, Wang Qishan, has got a seat on the committee. But instead of putting him in charge of the economy, the party has given him the anti-corruption portfolio, suggesting that politics, not merit, determines how the party allocates power.
Another potential source of trouble at the top is the lingering influence of retired leaders. China now has a unique situation where two “retired” top leaders are still alive and politically active. Both have proxies in the standing committee and the Politburo. Both can influence policy from behind the scenes. Contrary to the conventional wisdom that Hu has lost influence, he has retained considerable political capital despite his full nominal retirement. Of the 15 new members of the 25-member Politburo, at least seven to 10 people are close to him. Two of the new Politburo members, one of them a protege of Hu, are 49. This means that these two are well-positioned to be anointed as leaders of the sixth generation when the party convenes its 19th congress in 2017.
The CPC’s leadership transition may have ended, but it has left many critical questions unanswered. Most importantly, we do not know how much real power Xi has and how capable the new leadership is.
We don’t have to wait long to find out. Because the Chinese economy is showing many signs of structural frailties. A major economic crisis — induced by a continuing decline of growth and/or banking sector insolvency — is highly probable in the next two to three years. Xi and his team will have a chance to show us whether the well-known flaws of authoritarian regimes also apply to China.
The writer is a professor of government at Claremont McKenna College and a non-resident senior fellow at the German Marshall Fund, US.
