AS the results of the “election” started coming in, displayed on an electronic screen set up beside the expansive stage on which China’s leaders sat in the Great Hall of the People, a collective gasp went around the auditorium. The verdict read: “2,952 for, one against.” For the 3,000 delegates of the National People’s Congress (NPC), or Parliament, and the hundred or so journalists present in the press gallery, the margin of victory for Xi Jinping was hardly unexpected. The sense of surprise was likely triggered by the lone dissenting vote: who among the largely rubber-stamp Parliament’s delegates was daring enough to oppose the election of Xi?
For the Communist Party of China’s (CPC) new General Secretary, securing the approval of the NPC was always going to be a formality. Xi was chosen as the head of the CPC’s seven-member Politburo Standing Committee following the party’s 18th National Congress last November, and had been anointed as Hu Jintao’s successor five years ago. While Xi’s selection as President on March 14 was long-expected, what has, however, caught many people in China by surprise is the manner in which the CPC’s new leader has started his 10-year term. When Hu Jintao succeeded Jiang Zemin in 2002, he adopted a low profile. In some sense, he had no choice in the matter: Jiang held on to his post as the head of the CPC’s Central Military Commission (CMC) even after he relinquished his titles as General Secretary and President. It took a full two years for Hu to fully emerge from Jiang’s shadow, and even when he did so, he had to spend his presidency leading a Politburo stuffed with Jiang’s allies.
The clean transition that Hu Jintao enabled—a grateful Xi praised Hu’s decision to hand over all his titles as a reflection of “his foresight as a Marxist statesman and strategist, and his broad mind and noble character”—has allowed Xi to very quickly carve out his own vision for the country. In the months since taking over as the head of the party, Xi has centred this vision over a “Chinese dream” of national rejuvenation (see “In search of a dream”, Frontline , March 8, 2013). Xi further fleshed out this vision—and how this might be reflected in the policies of the new leadership—during the NPC’s two-week-long session.
Xi’s first address as President, on March 17, was markedly different from those of his predecessors. Eschewing the long-winded political terminologies that usually littered the speeches of earlier leaders, Xi spoke directly to the public, suggesting he has been quick to grasp the importance of public opinion following the first leadership transition in China that saw the news agenda set by the Internet, and not Party-run media outlets. Xi spoke of “the earnest expectations of the people for a better life”, and said the CPC “cannot have the slightest complacency”. He called on all members of the CPC and “especially the leading cadres” to “consolidate their ideal and conviction” and “always put the people above everything else”. Xi ended his speech with a call to “resolutely reject formalism, bureaucratism, hedonism and extravagance” and “strengthen the ability to resist corruption, prevent degeneration and ward off risks”.
Xi’s new leadership style has been on full display in the months since he took over. His first major campaign was to eliminate “extravagance and waste” in the government. In Beijing, at least, it appears that the CPC’s new leadership indeed intends to see this campaign through. One CPC official who works for a Cabinet-level Ministry revealed some of the changes in the working habits of government departments in the weeks since Xi took over. A common tradition for government departments was to hold banquets to mark the end of the working year before the March Parliament sessions are held in Beijing. This year, however, departments were not allowed to host their usually lavish banquets in Beijing hotels; instead, they had to have sober functions—with no liquor served—in their offices. Several Chinese newspapers—including those that are not Party mouthpieces—confirmed his account in recent reports that quoted restaurant owners complaining of a steep fall in business this March.
Restructuring Xi’s focus on a “cleaner, smaller” government was emphasised in the new leadership’s first major policy decision, which involved the biggest restructuring of the government in 15 years. The plan involved dissolving two Cabinet-level Ministries, including the powerful Ministry of Railways (see “Ambitious reforms plan”, Frontline , April 5, 2013). The new Premier, Li Keqiang, the second-ranked Politburo Standing Committee member, explained the move in his first meeting with the domestic and foreign press, on March 17, describing it, strikingly, as a “self-imposed revolution”.
“To succeed in doing anything,” Li said, “one has to strike the proper balance between idealism and reality. This plan is about streamlining the government and delegating power to lower levels. Institutional reform is about optimising the distribution of power within government. Transforming government functions is about redefining the relationship between government on the one hand and market and society on the other. We need to leave to market and society what they can do well. On the part of the government, we need to manage matters that fall within our purview.”
Li acknowledged that there was “frustration” in China about excessive bureaucracy and inefficiency in government. “When I visited local communities, I always heard people complain to me that they need the approval of several dozen government departments to get something done or to start a business,” he said. “People are quite frustrated about this. Such a state of affairs is not good for efficiency and might lead to rent-seeking and harm the image of the government.” He announced a move to cut by one-third the 1,700 administrative items that require the approval of government departments.
Three goals The Premier outlined what he described as the new leadership’s three goals. The first, he said, was achieving an annual growth rate of 7.5 per cent in the next five years in order to build a “moderately prosperous” society by 2020. “That will not be easy,” he said, “but we have favourable conditions in place and enormous potential in domestic demand.” He said the key would be achieving “economic transformation” and to “combine the dividends of the potential of domestic demand, and creativity and vitality, to together form new drivers of economic growth”. China, he said, needed to “enhance the quality and efficiency of economic growth, raise employment figures and people’s income and enhance environmental protection”.
The second goal, he said, was to create a social safety net and ensure compulsory education, medical care for all ages, housing and social insurance for the whole population. Li stressed the need to bridge the “two biggest gaps in society”—the gulf between urban and rural areas and regional disparities. “This involves 800 million rural residents and 500 million urban residents,” he said. “We need to take action to gradually narrow this gap. We need to enhance the reform of the social security system and raise the level at which social security funds are managed. In the area of medical and old age insurance, we gradually need to make sure people can have their expenses reimbursed and transfer their accounts to the places where they currently reside. This will also contribute to labour mobility in China.” The third goal described by Li—and arguably the most challenging of the government’s three objectives —was to promote social fairness to “create equal opportunities for everyone, for people from rural and urban areas, and for people regardless of their family background”.
The urbanisation challenge The new Chinese leadership has outlined a vision of “inclusive urbanisation” that would focus more on social welfare rather than merely accelerating growth. “What we stress,” Li said, “is a new type of urbanisation that puts the people in the heart. It needs the support of job creation and provision of services.” At the heart of the challenge of achieving this objective is the status of the 260-million migrant workers in China’s cities. A further 10 million farmers are expected to add to China’s urban population every year for the rest of the decade.
The debate in China on how to bring forward this “new type” of urbanisation is centred around reforming the “household registration” or “hukou” system, which restricts access to social welfare benefits, from hospitals and to schools, for migrants. One side of the debate—echoed by Li and the government—argues that easing restrictions in the most sought-after centres of employment, such as first-tier cities like Beijing or Shanghai, would unleash a wave of migration that local governments could not bear. Instead, it suggests encouraging migration to smaller, second- and third-tier cities, which would look to attracting workers by removing hukou restrictions. “The new type of urbanisation is not building sprawling cities,” Li said. “We need to prevent the urban malaise and avoid the situation in which high-rises coexist with shanty towns.”
The other side of the debate posits that the market should determine migration, and that rather than seeking to direct the movement of people through incentives, the government should instead focus on making more land available in big cities through the conversion of agricultural land. A detailed survey on China, focussing on the urbanisation challenge, released by the Organisation for Economic Cooperation and Development (OECD) in Beijing on March 22 made the case for “[easing] the limits on the use of agricultural land for development and housing” and “allowing farmers to sell land to developers directly and to consolidate agricultural land parcels in order to raise productivity” as a possible way to offset the tremendous pressure on land in first-tier cities that has led the government, fearful of rising housing prices, to discourage migration.
However the new leadership chooses to proceed, the OECD survey would have made good reading for the government in terms of the recent progress made in bridging income gaps. The survey found that national inequality had peaked in 2008 and had been declining since. It suggested that the decline might be “reflecting faster growth in wages and larger reimbursements for health care at the lower end of the spectrum”. “In rural areas,” the survey said, “migration has widened the gap between families where nobody has migrated and those with migrants, pushing up inequality. Overall, the gap between incomes at the first and ninth decile has started to decline. The gap between rural and urban incomes has also declined as migrants transfer income to the countryside.” It said regional inequality had also declined markedly. The decline in migration to coastal areas has driven up wages by such an extent—close to 30 per cent over the past year in southern Guangdong, according to some estimates—that industries were shifting inland. “By 2011,” the survey concluded, “regional inequality had fallen back to the level of the early 1990s.”
The more difficult challenge for the government is achieving what the Premier described as “social fairness”. Doing so requires not only economic reforms, but political reforms that are far more difficult to push through. Li, in his press conference, said rather cryptically that “stirring vested interests is more difficult than stirring the soul”. “Talking the talk,” he added, “is not as good as walking the walk.” He spoke of the need to curb government power—a reform of state-owned enterprises has been seen by analysts in Beijing as a possible first step, despite the many political interests involved.
The manner in which Xi Jinping and Li Keqiang have started their term has left a sense of optimism among China’s progressives, who believe the new leadership will be bolder than the previous administration. Similar optimism also marked the start of the term of Hu Jintao and Wen Jiabao, who were, however, ultimately unable to push through many of the reforms they had initially hinted at.
Wu Jiaxiang, an influential political scientist, in an interview with a Hong Kong publication, Yazhou Zhoukan , went as far as comparing Xi to “a refurbished version of Hu Yaobang and Zhao Ziyang”, the liberal leaders of the 1980s. He also noted Xi’s careful invocations of Deng Xiaoping. “His first trip,” he said in the interview, which was also published by the Hong Kong-based China Media Project’s website, “was out to Shenzhen, and he invited along four people who had accompanied Deng [on his famous 1992 “southern tour” that preceded reforms]. He laid flowers before the image of Deng.”
Wu went on to say that Xi was looking to move against sections in the CPC that were backing a heavier role for the state and conservatives who were opposing economic and political reforms. He was of the view that Xi “can deliver” but the new General Secretary would begin cautiously. “Now, there is no [vocal] criticism of universal values, there is substantial progress, for example on the question of work style, on the question of lifestyle [among officials], on the need to make meetings shorter, on not simply following the official script, on not being extravagant, and on the anti-corruption drive,” he said. “No one is going to oppose these new policies,” he added, “regardless of which faction they belong to.”
