Xi Jinping “The Dream Seller”
Xi started 2018 by dream-selling that all rural Chinese living below the poverty line would no more be poor by 2020. Internationally he projected himself as the crusader for world peace and climate change, insurer of international order (Despite ignoring the ruling of PCA and violating UNCLOS), with a resolve to push through Belt and Road Initiative (BRI) to fulfill Chinese dream. It indirectly amounts to declaring himself as tallest leader on the planet, in the manner he got himself re-elected for second term and did everything possible to make himself great under the banner of ‘Making China Great’. He seems to start 2018, assuming that the world accept him as tallest autocratic leader, as China has accepted him without worthwhile checks and balances.
Post 19th Congress of CPC1, Xi Jumping’s election, enshrinement of his thoughts and ideas like BRI in the Chinese constitution, resulted into his self achievement of a parallel status to Mao Zedong in China. He has been on a title grabbing spree holding over 12 top class appointments in China. It includes becoming the Commander in Chief of Joint Battle Command of PLA, and now reorganizing CMC as its Chairman, with his loyalists holding top hierarchy, to rein PLA for him. He was able to sell the dream of prosperous life and freedom from poverty. He also demonstrated that mainland China is the safest place in the world with no terrorist attack so far1, in an era when no country feels safe from terror attacks of varying variety (Even if amounted to overlooking some Pakistan based militant groups support to ETIM, active in Xinjiang, isolation in support to Masood Azhar).
His anti-corruption drive was most popular amongst masses seeing powerful people in jail, notwithstanding the accusation of systematically eliminating the entire dissenting elements and all his possible competitors through every possible means including this drive. Many critiques in China and abroad feel that his real achievements do not match his elevation to the status of Mao, which would have definitely created some disgruntled elements in his system, and powerful lobbies who may be quiet now, because disagreeing with Xi ‘The Core’ is anti national and may lead to jail.
Internal risks ahead for Xi Jinping: creation of a boiling pot?
2018 sees ‘Financial Battle’ as the greatest challenge for Xi Jinping. Despite global slowdown his record of financial growth has not been good. He took over in 2012 with 7.9 percent GDP growth and his economist does not see him going beyond 6.5 in 2018. It is quite clear to the dream seller Xi Jinping, that so long he delivers economically, the people will tolerate his autocracy, and his opponents will be quite. So long CPC ensures economic progress and the people of China get a decent life, they will tolerate the forced praises of Xi Jinping. When his regime stops delivering economically, the democratic winds will start flowing from Hongkong and Taiwan, and the educated youth may not tolerate the autocratic system of Xi Jinping, having no worthwhile grievance redresser mechanism. After all China is third most popular educational hub, with largest number of PhD’s in the world, where population understands the entire power play. Xi’s loyalists assuming every key appointment in China including chiefs of State Owned Enterprises (SOE’s), which are surviving on bank loans. They cannot be assumed to be quiet forever. Hongkong continues to protest for more autonomy (the last one in the beginning of 2018, in City Square). Xi realizes the need for economic delivery and he continues to repeatedly emphasise on success of BRI. He did deliberate on economy in a mega economic conference, but his catchy slogans like “Xi Jinping’s Economic Thoughts on Socialism with Chinese charecteristics in New Era” have to deliver.
Riding the Tiger: PLA
Suppressing/sidelining PLA is like riding a tiger, because historically PLA had a major role in creation of PRC and has been having a stronghold in the CPC. In successive reorganizations of PLA, anyone who thought differently than Xi Jinping has been sidelined, with his puppets propped up including manning CMC. This has created a powerful lobby which has suffered in such reorganisation, with hidden potential to explode. Xi is also planning another watchdog body ‘National Supervisory Commission’ likely to be above law indicates that dissent has no place in “Socialism with Chinese Characteristics for a New Era” and adequate ‘Revolutionary Tampering’ will be resorted to quell dissent. It will also make PLA commanders extra cautious in exercising command, causing further disgruntlement. In fact Xi is pushing his country to a state where there is only one leader and everyone else is a worker. It is also fair to assume that whenever anyone gets more than his dues, everyone else becomes jealous of him and disgruntled, hesitant of cooperating willingly with him thus creating a boiling pot.
China can boast of speeding up its ammunition manufacture by utilizing robots, but with over centralization of power, the PLA hierarchy also has no choice but to behave like robots and no scope for dissent which is not a very happy state of affairs for any military force. It is learnt that PLA sidelined more Generals in anti corruption campaign than poor performers in any war, with suspicion of falling out of Xi’s thinking, besides genuine corrupt cases.
Amongst many firsts post !9th Congress, China places its internal security force PAPF being placed under CMC, which is being managed by loyalists of President Xi Jinping. Message which comes out is that the internal security will also have much better grip of CMC and the role of NPC under which it has been traditionally, will have a limited role. The speculation can also be that with total autocratic style of hierarchy, China may be expecting much greater dissent than earlier.
No dissent with “The Core” XI Jinping, or be declared anti-national: A new normal
The biggest threat to China comes from within. The viability of “Implosion theory” is worth analysation with a totalitarian regime. Besides taking control of powerful PLA, with dissenters sidelined, some powerful civil members who held important positions in CPC, and booked under anti-corruption drive also add on to this lobby of disgruntled elements. The resolution of 19th Congress includes that adequate ‘Revolutionary Tampering’ will be resorted to quell dissent even in the society. The legal system stands hostage to party leadership justifies the boiling pot theory. The people’s belief that Xi will make China great and his popularity amongst the masses is his greatest strength, a dent on which is a great risk. Some of his actions like forcing Christians to replace Jesus Christ photos by Xi Jinping’s photo to avail government benefits, laying restrictions on religious practices on Uyghurs’ in Xinjiang, use of force in trying to prevent democratic thoughts and autonomy in Hongkong may be too risky, as it may break the internal cohesion of China. Xi’s efforts like forcing students to read Xi’s thoughts (Equivalent of Mao Redbook) can be seen as an effort to change societal fabric may not go very well in China of New era having educated population. The strict censorship of media and internet, and electronic isolation of thoughts indicates attempt to bring societal changes in a manner that chances of student unrests/disagreements are minimized.
With Xi Jinping holding all key appointments with no room for dissent, the over-centralisation of power with him will lead to decision paralysis, with everyone in governance looking up to him for every decision, which might affect effective execution and growth of the country.
External Risks for Xi Jinping: Has he pushed others together?
The second major risk comes from reactions of the external environment to the autocratic, over ambitious Xi Jinping challenging the entire global system. Xi has left no ambiguity in conveying that he wants to ‘Restore’ China’s position as the ‘Global Superpower’ replacing US, and have a world class military by 2050.He has forced other countries not in tune with him, and some neutral countries to come closer to US against his aggressive designs. His direct threats to Taiwan and indirect ones to potential adversaries in his speech in 19th Congress, and the Resolution thereafter, indicate unprecedented arrogance. The threat to Taiwan, is being demonstrated with increased number military drills and air exercises around Taiwan, notwithstanding the Tsai call for mainland trying to destablise the region.
China’s aggressive posture is visible in incremental encroachment of features and converting them into islands in South China Sea, stretching its sovereignty claim as per its perception based on impractical historical logic, over-riding UNCLOS and ruling of Permanent Court of Arbitration in favor of Philippines. Having done that his claim to be “Insurer of world order and peace” in his New Year message of 2018 does not make sense to the world outside China. China also continued to convert features to islands to military base (Announcing completion of infrastructure development in Ferry Cross Reef), without any physical opposition by taking advantage of window of opportunity due to US engagement with North Korea, Afghanistan, and controversies regarding Iran and Israel, besides certain internal controversies. China may have projected North Korea as a concern and supported UN sanctions, but the alleged leakage of oil despite, more so with impounding of Hongkong ships by South Korea, keeps China under scanner for not being serious about UN sanctions.
His direct messaging for PLA to be ready to realise China’s reunification at any cost (Implying use of force), take expeditionary roles to ensure world peace, leaves no doubts about his hegemonic design and uncontrolled autocratic stance. He challenges the law based global system but wants to impose it inside China. This has pushed all other powers which are immediately affected by it, to get closer. The Quadrilateral Security Dialogue (QUAD) may be at official level talks on sidelines of Association of Southeast Asian Nations and East Asia Summits, to discuss regional and global cooperation in Manila may be an old idea with limited scope today, but it signals thinking and talking about balancing China’s growing assertiveness. The signal seems to have reached China as its foreign office shows concern that it should neither be politicised nor exclusionary. It is seen that China is trying to deal with each country bilaterally, thereafter. Malabar exercise in Bay of Bengal and global use of word ‘Indo-Pacific’ instead of ‘Asia-Pacific’ (cutting out China from it), Asia- Africa Growth Corridor are some examples of it. Quad may not be a relevant balancer today, but it may become formal, relevant and powerful in future, in case Chinese stance continues to be aggressive.
Notwithstanding larger than life image of Xi Jinping inside China, Post 19th Congress most reactions from other countries do not indicate any global swing in Xi’s favor. Pakistan, the closest ally of China refused to accept Yuan as global currency in Gwadar SEZ in favor of Dollar initially, till US announced cuts in financial aid. It pulled out from Diamer-Bhasha dam deal over China’s ‘too strict’ conditions. CPEC is being criticized in Pakistan to be against their interest, raising questions on viability of CPEC. In fact China itself has apprehensions on CPEC, concerning security and corruption of officials, and has recently stopped its fund flow to Pakistan to revisit terms and conditions, leaving some other energy projects in jeopardy. Nepal has already scrapped the deal of $ 2.5 Billion Budhi Gandaki hydropower project. Its BRI programs seem to be slowing down after symbolic progress initially, starving for funds.
While Xi may claim to have reached in US neighborhood for investments in South America, as a counter to US influence in South and East China Sea, but his idea of replacing US as global peace provider is still not acknowledged by anyone and does not indicate the practicality of its dream of being leading superpower. If China’s Defense budget for 2017 was $ 215.7 Billion and US had allocated $ 611.2 Billion for defense (SIPRI Factsheet), there is no way that it can replace it as global security provider. The largest military need not be the best in the world, despite such aspirations. In my opinion his ambitions, aggressiveness and arrogance is moving faster than its capacity building. Xi’s idea of proving to the world that the authoritarian, socialist model of governance with Chinese characteristics in new era is better than liberal democratic model of West has no takers. China’s next door neighbours like Nepal going for complete democracy and Vietnam moving towards more liberalism post 19th Congress justify the point.
The global strategists have reason to expect a more confident, assertive, foreign policy from China in light of Xi Jinping’s announcement that China would continue to seek a greater role in world affairs in a new era, as it strides towards the global centre-stage. He is following it up with military build-up in expeditionary design in places like the South China Sea, and soft power play through economic schemes like the BRI.
History is full of examples where a totalitarian regime whenever started making threatening postures with no internal checks and balances, it led the country to disaster, like the way Hitler led Germany to a disaster when his ambition grew beyond his capability. It also need to be noted that in future the idea of having one or two superpowers is getting outdated, because all countries work as per their national interest and do not follow the dictate of any one country. North Korea standing up to US, Vietnam standing up to US and China, India and Bhutan standing up to China in Doklam stand-off, are some examples to prove that a well determined country cannot be forced to adopt a particular course by any power.
Strategic Encroachment in India’s Neighborhood, post 19th Congress
Post 19th Congress of CPC, China continues to encroach in Indian neighbourhood without talking about the core issues and points of divergences as earlier. To that extent I do not think 19th Congress of CPC has made any major difference to India China relations. While China has talked of better relations with India in 2018, but the visits of its Foreign Minister alongwith Russian Foreign Minister did not yield anything worthwhile, with each side quite firm on its stance on issues of divergences like BRI. On the controversial border issue there is a crying need of delimitation, definition and demarcation of LAC, and the demarcation be known to the troops manning it, if both sides want to avoid stand-offs. The Chinese however seem to be singing the old tune of better border management and confidence building measures to prevent it, which to my mind is a quick fix solution; with China again postponing the core issue even after 20th round of talks.
The only difference which affects India indirectly is that some of our common neighbors may give in to more aggressive ‘Chequebook diplomacy’ and ‘Infrastructure diplomacy’ of China or may get coerced/influenced by it. China’s decision for extension of CPEC into Afghanistan may affect Indian influence in that country. It indicates the clear strategic intent of getting Afghanistan into its strategic orbit, attempt to play as a mediator between Pakistan and Afghanistan by ‘Infrastructure diplomacy’, take Afghanistan away from US strategic space and Indian influence, mitigate Indian Chahbahar connectivity, besides using Afghanistan mineral resources. China has achieved rail connectivity with Iran, which does generate fresh concerns for Washington. Maldives signing FTA with China, land grabbing efforts of China in Sri Lanka, Bangladesh, Myanmar, Nepal and Pakistan are few such examples affecting Indian security adversely for which India needs to find an answer.
China is also trying to play the role of mediator in Rakhine state of Myanmar, emphatically increasing its influence over Myanmar, advertising its capability for humanitarian development, checkmating Indian stance towards Rohingyas to show India in poor light. China is not concerned about the terror potential of Arakan Rohingya Salvation Army duly supported by ISI/Pakistan. China with little investment of money power expects to get a pat from UN, as a responsible state .
On diplomatic side India needs to not only ‘Act east’ but ‘Act west’ also. India is better located to be the hub of global sea lanes with lesser choke points either side, and is working towards this capability to provide an alternate model of global connectivity like Asia- Africa Growth Corridor connecting further West.2 Domination of Indian Ocean is going to be another strategic competition, which will become unavoidable in due course. China can keep increasing bases in Indian Ocean, but whether they will be its strength or vulnerability will be a question mark due to distance involved, choke points and growing strength and operability of Indian Navy with other global Navies.
The National Security Strategy of United States calls China and Russia as competitors3. Although rubbished by China as ‘Cold War Mentality’, still brings the inclusion of China into a new arena of cold war with many more regional players getting in, looking for check and balance to aggressive China, even if they do not say so openly. A beginning of new cold war which may lead to a trade war is evident and reality. While China may be confident to ensure that the ‘Implosion theory’ will not work by its super strict checks, but will this narrative sell outside, I have my doubts. It remains to be seen that a country having an autocratic system, with only one decision maker and rest executers, with educated population will continue in this form for decades. Any slowdown in economy might result in democratic winds flowing inside to an extent that it may be difficult to control. The exact evaluation of Yuan is a suspect hence China may claim to stand tall on economic front, but is there a bubble inside only time will tell.
The views expressed are of Major General S B Asthana (veteran) and do not represent views of any organization. The General is reachable on Facebook, Linkedin, Twitter and Google+ as Shashi Asthana, also on website http://www.asthanawrites.org
- Resolution of the 19th National Congress of the Communist Party of China on the Report of the 18th Central Committee, October 24, 2017, Xinhuanet.
- Asthana S B, Opinion: What does Xi’s autocratic position mean for India?WION News, December 07, 2018. URL http://www.wionews.com/world/opinion-what-does-xis-autocratic-position-means-for-india-26100
- National Security Strategy of United States of America, December18,2017. https://www.whitehouse.gov/wp-content/uploads/…/NSS-Final-12-18-2017-0905.pdf
South Korea should go with the United States
Now, previous success won’t guarantee same success in future in the age of the Fourth Industrial Revolution, We are expecting generation that ability to create new and missing things is more important than keeping existing assets.
The economic survival strategy also changes.
There is no longer continuous growth in this new era, even for a major growing corporation. For example, an automobile can be a mobile computer with value added on software and electronics. Every industry becomes IT related company, not only food and pharmaceuticals industry, but also construction and banking business as well. Now, a company own by person who counts the money in front of the vault and calculates the stock number can’t be survived. Although the South Korean economy has global competitiveness in mobile phone semiconductors and some industries, South Korea is facing huge challenges.
South Korean companies must challenge upcoming new business in order to servive. South Korea has strong engineering system. But even Germany which has world’s most powerful engineering system is having difficulties in developing new business areas. South Korea has no resources and can’t be self-sufficient. It is the fate of South Korea to look out for the world.
The US and China trade wars of two axis of the global economy are becoming reality.
As the United States imposed a $ 60 billion tariff in retaliation for China`s breach of intellectual property rights, the Chinese Department of Commerce immediately launched a counterattack by imposing a $3 billion tariff on 128 U.S. products.
Global stock markets plummeted dramatically and The WSJ reported that world was horrified by the terrible of uncontrolled commerce war. This trade war is a step in keeping the United States ” Economic security “on the rapid growth of China’s high-tech sector.
China, once called the “World Factory” by cheap labour put their hand to rebellion. To take an instance from smartphone, Huawei, Oppo, Vivo’s superiority in Apple designed by California and produced by China is striking. Oppo and Vivo are focused on advanced technologies, not only low-price.
China is moving from ‘Made in China’ to ‘Created in China’ through the ‘China Manufacturing 2025’ plan for the manufacturing powerhouse. By the manufacturing 2025 project has an ambition to boost China’s competitiveness to surpass the US, Germany, and Japan levels and to become the world’s No.1 in 2049.
According to Financial Times that the Trump government emphasized “economic security is the security of the country,” that is meaning the United States to take aim at the Chinese manufacturing 2025.
It is not so simple in terms of South Korea reality.
In South Korea, China and USA are first and second market highly dependent on exports of Korea that counts 25 percent of China and 12 percent of US market.
If the market shrinks due to the friction between the U.S. and China, South Korea could be caught in the middle of the market and not be able to choose either
But The true global leader in today is the United States and Unites States is really strong.
South Korea should go with the United States.
Power Projection of China
A coin has always two faces, an analyst is ought to analyze the both sides.
China is considered as flag holder of soft power with a global agenda of peaceful rise. At moment, the world is facing a new emerging global order by the rise of multiple actors in the international arena. Now there are two school of thoughts who are proposing contradictory views like one wing regarded it as optimistic Sino rise who believes that China’s rise is peaceful. Its foreign policy is viewed as one of the most harmonious policy ever structured. They believe in the mutual cooperation and peaceful coexistence. Rise of China is an optimistic opportunity which is justified by different aspects. As African states were facing a massive number of problems at all levels, many super powers came and ruled the world but they didn’t bothered the prosperity of third world countries.
China started invested in African region and assured the chances of prosperity over there. Due to this economic integration of China in Africa, a demise of Indian influence in that has been observed as well. Their economic cooperation is based on model of helping underdeveloped countries by initiating the projects like Belt and Road Initiative. They are extending the helping hand to developing countries by selling products at cheaper rates. They respect the ideologies of other countries, for example, China didn’t celebrated Pig year in Muslim countries. Regarding Pakistan, here the optimistic view is prevailed at higher context. Pakistan’s policy makers favor Chinese investment in Pakistan, as it will help Pakistan in economic prosperity. China helps Pakistan at almost all of the international forum. Friendship of china and Pakistan is the strongest one to be observed. Pakistan can learn a lot from them. The proper use of diplomacy, image building, projection of soft power and individualism in ideologies and beliefs. Long term planning strategies can be learned from them. China is all weather friend of Pakistan but self-skills are significant, as there is a famous Chinese saying, “to serve a guest by fish is a good way but to teach them how to catch fish is the best way to serve them.”
On the other hand, there are supporters of pessimistic Sino rise who believe that China’s rise is threat for globe. This pessimism is oftenly prevailed by western analysts. They think that rise of China can disturb the existing world order. For example, China is competing with American economy in the international market. Balance of power is coin of international politics, so other actors are emerging now. But the rise and demise of powers after a certain time period is one of the laws of nature. Specially America is feeling threatened by this emergence of China as a super power which can be seen through events like Huawei issue over 5G technology, its sensitization, trade war between china and America, claim of copyrights by America etc. increasing influence of China in majority of states is posing the seriousness of issue. Chinese model of Confucianism is spreading as it has started practices in South Korea as well which is predicted through their cultural stimulus. Pessimistic school of thought deny the authenticity of foreign policy of China, they consider that it is a mere framework which has nothing to do with reality.In reality China’s behavior is like relations having towards Taiwan, South China Sea etc. Interest of states are very important which may differ from each other. Lensing through these views, this unpredictable situation leaves a humans mind into a chaos, whether the rise of China is peaceful or just a myth?
The origin of the Four Modernizations and President Xi Jinping’s current choices
On September 13, 1971 Lin Biao tried to flee to the USSR with all his family, aboard a Trident plane of civil aviation, which had left with little fuel and no active radio contact.
The crash of the aircraft in Mongolia, where both Lin and his whole family died, was caused by the order given directly by Mao to shoot down the plane.
What had happened, obviously in political and not in personal terms?
The answer is simple: Lin Biao was very strongly opposed to the new agreement between China and the United States and hence had organized a military coup. For Lin Biao all the room for US geopolitics was to be found in what the Third International’s forces traditionally defined as “imperialism”.
For Mao Zedong, imperialism was vital for both the USSR and the USA- and considering that he was far from the continent that was the prize for which of the two won the Cold War, namely Europe-he refused to make too many differences between the two.
As a man of Tao and Zen, Mao treated an evil with another evil.
Mao Zedong, however, also knew that a new economic relationship with the United States was needed, after the long economic crisis and the factional instability within the Chinese regime. The Soviet Union could certainly not give it economic stability and hence the “Great Helmsman” turned to the distant enemy rather than to the near quasi-friend.
Nothing can be understood about China, including current China, if geopolitical choices are separated from economic, financial and industrial ones which, however, are subjected to the strategic “policy line” defined by the Party – a policy line that is cultural and always based on a very long term.
On September 29, 1972 the diplomatic relationship with Japan were resumed, along with those with the United States. An evident overlapping of different geopolitical lines which, however – in the minds of the Chinese decision-makers -were similar also from the symbolic viewpoint.
In 1973 Deng Xiaoping reappeared in public, upon direct order by Mao Zedong.
Those were also the years of the late definitive success of the “policy line” of Zhou Enlai, who had successfully gone through the Great Cultural and Proletarian Revolution, which had partly overwhelmed him, and led the 10thCPC Congress.
That was the compromise which held the Party together, after Lin Biao’s elimination. An unstable agreement between the reformist “Right” (Zhou had spoken of “four modernizations” many years before, exactly in 1965) and the Left, silenced by Mao, that had crossed the red line of the Cultural Revolution and the failed communization of rural areas.
In those years, also the Party’s Left lacked mass management of the people and the Party and had to agree with the other factions, while Mao mediated and also created “third wheels”.
Create something from nothing – one of the Thirty-Six Stratagems of the Chinese Art of War.
In 1973, just before the equilibrium between Zhou and the old CPC apparata broke again, Deng Xiaoping was fully rehabilitated and also became member of the Chinese regime’s deep axis, namely the Central Military Commission.
In 1975 Deng was elected vice-President of the Central Committee and member of the Politburo Standing Committee.
The connection between the reformists – if we can call them so – siding with Zhou Enlai, and the “centre” of the Party’s apparatus – that regained its roles and posts by ousting the Armed Forces -prevailed once again.
Again in 1975, the National People’s Congress praised the “Four Modernizations” already proposed by Zhou and, in its final statement, hoped “that China would be turned into a modern and powerful Socialist country in the approximately twenty years before the end of the century”.
Political transformation through the new economy, as well as preservation of the regime through political transformation itself.
We could call it “the Tao of geoeconomics”. Acceleration of industrialization and modernization, but without creating the disaster of rural masses, who were objectively unable of providing the start-up capital for implementing any of the Four Modernizations. This was the real difference with the USSR of the 1930s.
That capital had to be produced in innovative companies and be attracted from outside.
At the time, however, the CPC was not yet firmly in the hands of any factions. In September 1975, the national Agriculture Conference saw the harsh clash between Deng Xiaoping and the old “Shanghai group” of the Cultural and Proletarian Revolution that, however, no longer controlled most of the Party.
Zhou Enlai died in January 1976 and shortly afterwards, in Tiananmen Square, there were severe incidents, albeit with the constant presence of many wreaths reminding of Zhou.
Later there were also strikes and unrest, until the capture and trial of the “Gang of Four” in Shanghai. It had inspired the “Cultural Revolution” and was then directly accused by Hua Guofen – the man appointed by Mao to lead the transition- of having prepared a coup.
China’s transformation, however, began again from rural areas: at the second Agriculture Conference in Dazhai, in December 1976 – where various cases of corruption and “social polarization” were described and stigmatized- the discussion focused on the First Modernization, namely that of rural areas.
When you regulate too much, a parallel and illegal market is created. This always happens.
Obviously this also happens when total communization is applied to the economic cycle of rural areas.
Certainly those were residues of Sovietism in the CPC’s doctrine, but also of the a-dialectical implementation of Marxism-Leninism in historical and social contexts in which the analysis of the founder of “scientific Communism” had never focused.
In fact, when you read the works and correspondence that Marx dedicated to the Russian agricultural issue, you note that the author of “Capital” foresaw a direct Socialist social transformation stemming from the maintenance of the social and community networks in traditional villages. It may seem strange, but it is so.
This system operates only with a non-industrialized State that is scarcely widespread in the territory. Otherwise, the problem is that of capitalism in rural areas to generate the surplus of urban and industrial investments.
Even in the Second Volume of “Capital”, Marx’s model is essentially this one.
It is precisely on the agricultural issue that the stability and success of many Communist regimes isdefined and, not surprisingly, the first of Zhou’s and later Deng’s Four Modernizations was precisely that of agriculture.
The topic characterized all Party’s organizations, but it was in late December 1978 that the Third Plenary Session of the 11th CPC Central Committee decided to decentralize the economy – another factor strongly different from the Leninist tradition – and even to liberalize it, in addition to a process of ideological revision, namely Gaige Kaifang that roughly means “reform and opening”.
That was also related to the request for opening international trade based on the criterion of “mutual benefit” and equality between the various countries.
Hence, also from the ideological viewpoint, Deng became the Supreme Leader of the Party – as well as of the State apparatus – and announced the Open Door policy.
An extremely important fact was also the separation of the Bank of China from the People’s Bank of China, so as to serve as single State body for foreign exchanges.
That was the start of the “Long March” towards the Four Modernizations, with an unusually united Party, and currently towards “Socialism with Chinese characteristics” , as well as – at geopolitical level -President Xi Jinping’s New Silk Road.
In January 1980, the “four freedoms” – of work, people, goods and capital – were abolished.
The new planning needed to manage all aspects of productive forces.
That was explained by a covert war of the Chinese economy against the penetration of foreign capital and joint ventures, which in fact were immediately regulated by specific legislation enacted the previous year.
The great British operation of economic control over the South-Chinese coasts was resumed from Hong Kong, but the Chinese government eliminated the possibility of such an action by Great Britain (and by the USA, at least partly).
Hence the Party’s unity had to be reflected in a new context and, to some extents, in the whole society, so as to prevent the liberalized Chinese economy from taking the Party and Socialism away. A new rationale for the CPC’s Leninist unity.
The new Act on contract law was enacted in March 1981, and in 1982 also the new civil procedure law was enacted, which became effective on October 1, 1982.
In September 1983, at the 12th CPC Congress, there were three groups within the Party: the nostalgic Maoists, a small and narrow majority for Deng Xiaoping; the Orthodox group that still wanted a nationally planned economy, as in USSR -hence probably the heirs to Lin Biao; finally the real reformists.
Deng won with a clear, but not overwhelming majority.
Hence, everyone was waiting for the Four Modernizations to fail, so as to go back to the old routine of the Plan.
As also happened in the USSR, it was often fully imaginary compared to the actual reality of the things done and produced.
It was in 1983, however, that the Third Front strategy was implemented, i.e. Mao’s directive – drawn up as early as 1962 – according to which the national strategic industries had to be moved from the coasts – militarily and politically difficult to defend – to the internal areas. Without said Mao’s directive, the New Silk Road could not be understood even currently.
Hence 14 open coastal cities that were declared so in 1984, but with a new law on profits that served as mainstay of Modernizations: companies were asked to pay a certain share of profits to the government, but they could withhold some profits if they matched and exceeded the requirements of the contract with the State.
In 1985 a new regulation also involved government bonds. The seventh Five-Year Plan began, underlining a “scale” approach, in which the coastal areas – gradually freed from traditional strategic companies – were driving the economic development, which later spread like wildfire even in the internal areas.
It was the Hong Kong model that Deng Xiaoping’s executives copied and adapted.
For a short lapse of time, Chinese analysts and Party planners also looked to the Singapore model, with the (single) Party of Lee Kuan Yew.
It isby no mere coincidence that Shenzen was close to the former British colony, and often the Chinese attracted and favoured the companies of the British area towards the new Chinese coastal areas also characterized by free-market economy.
Advanced and high-tech services in coastal areas, and lower value-added, but still inevitable, productions in internal regions.
A new dualism, where rural overpopulation had to be gradually absorbed by inland strategic companies.
A double geopolitical status of inland areas which, in many cases, is repeated also in the current Belt and Road Initiative.
In 1986, the “open-ended” contracts for the manpower working in State-owned companies came to an end.
In October 1987,the 13th CPC Congress was held, in which – for the first time – there was talk about the “commodity economy”, i.e. a two-tier mechanism, in which the market is matched and also “corrected” by the old national planning.
A sort of re-edition, for internal use, of the formula “one country, two systems” implemented by China with the agreements for Macao and Hong Kong.
In 1988, however, the 7thNational People’s Congress officially legitimized the private initiative (not the mere ownership) and enabled private individuals to buy State-owned companies.
The term “People’s ownership” was also deleted, while individuals and groups, even non-Chinese ones, could buy land with a system similar to that of the British real estate leasing.
Profits, wherever made, had to be reinvested in the company that originated them, before requesting any financing from the People’s Bank.
The Special Economic Zones, modelled again on the Hong Kong system, became five.
Hence innovation on the coasts and strategic companies in the central regions – mainly public ones, which still remained almost completely public.
In April 1989, Jiang Zemin rose to power.
Student demonstrations also began in Tiananmen Square, where, year after year, the various anti-regime organizations gathered: Falun Gong, the networks of many illegal parties, unrecognized union organizations and many “spontaneous” groups.
And some old “Red Guards”.
Zhao Ziyang, the Party leader already defenestrated by Jiang Zemin, was in fact at the centre of “spontaneous” organizations.
The various Autonomous Federations of Workers -spread by location and not by industry – were legally created.
Gorbachev’s visit took place in May 1989.
That was the key moment of a long series of doctrinal, practical, cultural and historical differences that – from the very beginning – divided the two great Eastern heirs to the Marxist-Leninist Third International.
What really mattered to the Chinese leadership was that the Russian crisis did not overwhelm the Chinese Communists: that was the meaning of the declaration signed by Gorbachev, which regarded the “peaceful coexistence” of the two Communist regimes.
The leader of the Soviet Party was made fun of – not even so elegantly – not because he had reformed the Soviet economic system – in a way, however, that the Chinese deemed wrong – but for one reason only: he had relinquished the Party’s role in the reformist process, which the CPSU had to lead and guide for China, from the very beginning.
An “economicist” mistake, as the CPC’s ideologues said – yet another proof of the Marxist roughness of the “Northern enemy”, as Deng Xiaoping called Russia.
Sarcastic sniggers on the lips of Chinese leaders. Then Gorbachev explained again his perestrojka and glas’nost, but the Chinese leaders, whose power was based on Party’s bayonets, kept on not taking him seriously.
Days before the arrival of the Soviet leader, at least one million people had gathered in Tiananmen Square.
The problems that the Chinese leadership had to solve in a short lapse of time were radical: the “hard” wing that was previously a minority prevailed and managed to convince Jiang Zemin.
The Party and its authority – the basis of any transformation, even the most radical one – were re-established without much talk. It was impossible to think about a heir to the “Long March” that dissolved the Party within “society”.
On May 19, the CPC decided to follow the hard line and the military forces reached the areas near the Square, from the outskirts of Beijing.
Few hours later, the Square was completely cleared, but that was done the hard way.
Shortly afterwards, at the 4th CPC Plenum, Jiang Zemin – also following the experience of Tiananmen Square – returned to one of his old theories and developed the “Three Represents” model, i.e. the idea that the CPC’s power was based on its “vast representation” of the Chinese productive forces, of the cultural and technological avant-gardes and of the wide strata of population.
In other words, the Chinese society – and its economy, in particular – was reformed by bringing the elites together, part of whom were in Tiananmen Square, but also the large crowds still organized by the Party.
A Confucian middle way that was particularly successful.
Hence, Zhao Ziyang definitively lost the game within the Party that, however, was also inside the Tiananmen Square insurgency.
Once the crisis was over, Deng Xiaoping left also the last very strong power in Jiang’s hands: the leadership of the Central Military Commission.
Shortly afterwards – and there was nothing more symbolic than that event – the Stock Exchange of Shanghai reopened. A reopening that had been expected since the 1930s.
Later also the Shenzhen Securities Exchange opened. In both of them, any securities – including those issued by the State – were traded, but there was only one deep logic: to acquire productive capital to generate strong and self-sustained development of the coasts and of the high value-added industries that had to compete on the world free market, without granting protection and aid that would go to the detriment of the deep productive structures of the internal regions.
In 1992, Deng’s journey to Southern borders had a clear route, although the CPC’s leadership had always had some doubts about the “free economic zones”. The core of the issue was that the GDP had to be increased in the lapse of time between the 1990s and the beginning of the Third Millennium.
It had to be rapidly increased from 6% to 10%.
Without that “quantitative” assessment – just to use the old Communist jargon – there could be no “qualitative” transformation of Chinese society.
Everything had to be done soon – well, but soon. That was the characteristic of Deng Xiaoping’s years – extraordinary years, in some respects.
In a short lapse of time, the Party developed the concepts of “Socialism with Chinese characteristics” and of “market Socialism”, which are so important also in President Xi Jinping’s current policy line.
There were also other changes that, in a few years, led to the current Socialism with Chinese characteristics, as advocated by President Xi Jinping. However, everything could be done from a legal view point began in those years.
The transformation process of the Chinese economy is long, powerful and complex, but – unlike what is often said in the West – it is never a mere market mechanism or a naive adaptation of the Party or the State to the absolute Western rules of globalization.
As early as the 1990s, China has decided to govern market globalization and not just being a part of it. It wants to lead the process so as to be – now that the end of the century about which Deng thought has long been over – the axis of globalization and the centre of the new global hegemonies.
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