China's change brings needed
urgency By William H Overholt
Western pundits have pronounced China's
new leadership team "conservative", meaning
reactionary old communists who won't be able to
get anything done. After all, our favorites got
left out.
Wang Yang, who solved a village
crisis in Guangdong with democratic reform, didn't
make it. Nor did my personal favorite, Li
Yuanchao, who had made a "democratic personality"
prerequisite for high promotion. Wang Qishan, the
vigorous market-oriented reformer, got put in
charge of discipline rather than the economy.
Hence the conclusion that bureaucrats and
reactionaries are in charge. But that is not the
Chinese view.
In Chinese terms, this
leadership is centrist and stripped down to get
things moving. Both the charismatic reactionaries
(Bo Xilai) and the charismatic reformers (Wang
Yang) have been sidelined as disruptive, the
reactionaries much more decisively. (Imagine
Washington with a ban on
the Tea Party and MoveOn.org; congress might
actually get some work done.) The leadership
structure has been changed in the hope of moving
forward following a decade of immobilism.
The Politburo Standing Committee was
changed from nine people to seven to expedite
decisions. Abandoning precedent, outgoing
President Hu Jintao was retired as head of the
Military Commission so he won't get in the way of
the new leaders. People too close to him,
including reformer Li Yuanchao, have been
partially sidelined for that reason. Xi Jinping is
intended to have his own team, with less of the
old versus new leader factionalism that has been
so paralyzing.
Wang Qishan didn't get the
executive premier job running the economy because
he is so influential that he would have
overshadowed his boss, the premier; would Obama
have chosen Bill Clinton as his vice president?
But he will be enormously powerful, including on
economic matters, as the country's inspector
general. Reformers Wang Yang and Li Yuanchao both
remain important and both have a future.
Streamlining reflects a spreading
consensus that economic progress has been
endangered by slow reform and that political
legitimacy is being squandered by corruption and a
widespread sense of unfairness. Originally, the
leaders' plan was to spend the first two years
getting organized, then in the third year of the
new administration tackle financial reform, state
enterprise reform, agricultural income reform, and
political reform. But the new sense of urgency
means that key economic reforms must come sooner.
We should see early official endorsement of the
principal findings of the book China 2030,
written by economic reformers in collaboration
with the World Bank.
Of course, getting
China moving again will be difficult. The interest
groups - big state enterprises, the provinces, and
the army - have far greater clout than they did
before the Hu Jintao era. Even though the
"extreme" views have been quieted, the leaders'
opinions remain quite diverse. The old factions
remain vigorous just below the top.
Against this, it is crucial to understand
the sense of urgency, not just among the leaders
but throughout society. A decade ago, it was the
opposite. Western pundits expected that Hu Jintao,
whose term at the Central Party School saw
innovative thinking about political reform, would
initiate new reforms. They did not understand how
weary Chinese society was after a decade of Zhu
Rongji's reforms that cost 50 million state
enterprise jobs and 25 million manufacturing jobs.
The top of government was cut in half and everyone
felt insecure. Hu's promise of a "harmonious
society" provided just what people wanted.
Now the mood is the opposite, and the
numbers say that the old economic drivers - cheap
exports and infrastructure investment - have
permanently weakened. Beijing's atmosphere on this
exactly parallels Washington's fear of the fiscal
cliff.
Western pundits disappointed by the
absence of their favorites from the top seven are
missing what is truly important: the sense of
urgency, the streamlining, and the universal
acknowledgment among the top leaders that bad
economic numbers and political discontent demand
decisions. Economic reform is coming.
The
leaders' political "reform" comprises
anti-corruption and a restoration of meritocracy.
It won't work; Hu Jintao's near-doubling of
government and Party employment, and the enhanced
power of the state enterprises, ensure endemic
corruption absent deep structural reform.
Moreover, even if the anti-corruption
campaign worked, it wouldn't assuage public
discontent over unfairness. In a few years,
political facts will become as compelling as the
economic numbers.
William H
Overholt
(billoverholt@yahoo.com) is senior research fellow
at Harvard's Kennedy School of Government and the
author most recently of Asia, America and the
Transformation of Geopolitics.
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