After months of heated speculation, China’s new leaders were unveiled to the world on Nov. 15 in Beijing’s Great Hall of the People. But despite all the anticipation, what path they will take—with China struggling to create a more sustainable growth model and less brittle political system—remains uncertain.
As expected, 59-year-old Xi Jinping got the top job as party secretary, and is first among equals, in China’s now seven-member Politburo Standing Committee. (It was reduced from nine members to streamline decision-making.) Xi, son of a reformist revolutionary, is believed to favor continuing to open up China’s economy. The new No. 2, English-speaking Li Keqiang, 57, with a law degree and a doctorate in economics from China’s elite Peking University, is also a likely proponent of more reform.
Xi now oversees China’s 82-million-member Communist Party. That, of course, puts him in charge of the entire country, a role that will be formalized when he also assumes the presidency early next year. (Li will take over as premier at that time.) More surprisingly, outgoing top leader Hu Jintao handed over the chairmanship of the military to Xi as well. That’s a shift from before, when retired party elder Jiang Zemin held that position for two years after stepping down from his party and state roles.
But despite Xi’s clean sweep of the top positions, his relative power, as well as that of deputy Li, is restricted by the realities of China’s system. A consensus-driven leadership structure, where newly appointed top officials owe their position to powerful retired patrons whom they must not cross, limits the reach of any one person. “The party elders like people who keep a low profile, toe the line, and don’t take too many initiatives of their own,” says Jean-Pierre Cabestan, director of government and international studies at Hong Kong Baptist University in Hong Kong.
“Our Party faces many severe challenges, and there are also many pressing problems within the Party that need to be resolved, particularly corruption, being divorced from the people, going through formalities and bureaucratism caused by some Party officials,” said Xi after introducing the new standing committee in the Great Hall. “We must make every effort to solve these problems. The whole Party must stay on full alert.”
Jiang, 86, is the party elder who emerges as clear winner in promoting his allies, to the detriment of Hu. Other than Xi, who is seen as acceptable to both, and Li, a clear ally of Hu, at least four of the other newly appointed top leaders are seen as close to the still powerful former party secretary. Those include the Shanghai, Tianjin, and Chongqing party secretaries: Yu Zhengsheng, Zhang Gaoli, and Zhang Dejiang, respectively. And while Jiang Zemin was a proponent of economic reform during his years in power, overseeing China’s entry into the World Trade Organization, that is not true of most of his protégés. Neither Yu nor Zhang Gaoli are seen as strong reformers, and Zhang Dejiang, who was educated at a North Korean university, is seen as a supporter of a larger role for the state in the economy.
Wang Qishan, 64, is another Jiang ally, nicknamed “the firefighter” for his role in successfully battling crises, including the impact of the 1997 Asian financial contagion on China and the SARS flu epidemic that swept China in 2003. He’s seen as a capable economic reformer; he once headed one of China’s biggest banks and in recent years has been in charge of the U.S.-China trade and business relationship. Wang, however, did not get the economics portfolio, as many had expected; instead he will be in charge of fighting corruption—a critical job, but one that has no role in driving key economic reforms.
The lineup could end up being bad for needed political reforms. Those include allowing a more independent press that could report better on runaway corruption, efforts to make the party more transparent and accountable to the people, and strengthening the role of civil society. Liu Yunshan, 65, is seen as a deeply conservative official who has clamped down on the media in his role in charge of propaganda. Even worse, the two potential candidates most widely viewed as advocates for more political reform—61-year-old Li Yuanchao, now head of the party’s organization department, and 57-year-old Wang Yang, party secretary of Guangdong province—are absent from the top leadership.
“This is not the Standing Committee that reformers might have hoped for, but neither should it be a cause for despair. Most senior officials in China now seem to agree on the need for economic policy reform,” writes Mark Williams, chief Asia economist at London economic consultancy Capital Economics, in a Nov. 15 note.
Just what economic reforms are important? To build a more sustainable, consumption-driven economy, the new leaders must make progress on liberalizing China’s strict control of interest rates to create a more market-based lending system. They must also push policies that create a more level playing field for private enterprises, including lessening the role of China’s powerful state-run entities, says Baptist University’s Cabestan as well as Ted Dean, chairman of the American Chamber of Commerce in China.
“It’s not like they make campaign promises that reveal their policy agenda for their first 100 days,” says the Chamber’s Dean. “There has been a period of policy drift—now the question is will there be a commitment to significant new reforms going forward.”