Not too many surprises are expected from the 20th Congress of the Chinese Communist Party (CCP), which meets from October 16 to 23, except perhaps the promotion of newcomers among the seven members of the country’s supreme governing body, the Standing Committee of the Political Bureau. Not too many surprises either for some who consider that the die has been cast: the totalitarian clampdown on individual freedoms, on Uighurs and Tibetans, while the risks of war will only increase in light of the recent pressure on Taiwan and the growing confrontation with the American hegemony.
A Congress without surprises?
Paradoxically, the same people generally predict that the Chinese regime will fall as a result of its own demographic, economic and political contradictions, and that pressure simply needs to be stepped up to accelerate its fall. Others are more skeptical about the contradictions of a model that could continue to assert itself on the world stage as a rival superpower, a “systemic adversary” as European diplomats say. But they come to the same conclusion that more firmness is now needed after years of conciliation and cooperation that have allowed China to break unprecedented records to the point of being the world’s second largest economy today. The flaw in this “confrontation” thesis is that it forgets that the Chinese people have their say and that they do not shy away from it, as shown by the regular demonstrations against the zero covid policy, or those of small property owners against crooked property developers.
One can therefore consider that the mass is not said, that China is the product of the global system, the antagonistic face of the Western order and that one should not fall into the confusion between the regime, China and even less the Chinese at the risk of tightening the links between the regime and the people in the name of the security of the country. The Chinese regime carefully cultivates this confusion, for example, by noisily celebrating each year the anniversary of the looting and burning of the Summer Palace in Beijing on October 18, 1860 by a British-French expedition. Or, last year, the 100th anniversary of the founding of the Chinese Communist Party in Shanghai in 1921, which was brutally interrupted by the French Concession police. Xi Jinping has recently introduced the “Great Renewal of the Chinese Nation” as one of the three pillars of his action plan, along with “socialist modernization” and the “reduction of inequality in a middle-income society”. The regime must square the circle and prove that it is the best guarantor of Chinese sovereignty while ensuring prosperity for all. Is this the case with the model proposed at the 20th Congress?
Leninism is against the Chinese society culture
The Congress itself is a well-oiled machine that confirms the Leninist character of the regime, with the party’s pre-eminence over the state and businesses clearly reinforced by Xi Jinping. Nearly 100 million members, or 7% of the population, even if they are less and less from the working classes and still not very feminine: less than 30% of the members and none sitting in the ruling body. The exception of Xi Jinping’s third term of office, which was acquired at this congress, clearly removes any prospect of democratization of the regime. On the contrary, it explains the strengthening of Orwellian control of the population, which is made possible by the most modern technologies, such as the video surveillance cameras (a target of 600 million), and social control norms and penalties.
But the Chinese are stubborn and not very fond of the “legism” of Han Fei, who in the second century BCE developed the first absolutist imperial doctrine, the one that clearly inspires Xi Jinping and his main ideologue, Wang Huning, the fifth member of the current Standing Committee. The Chinese folk clearly continue to prefer their mix of three historical philosophies specific to China but fairly universal in content: the libertarian individualism of Laozi (Taoism), the communitarianism of Buddhism, and finally the moral and justice virtues of Konzi (Confucianism). Xi Jinping’s task is therefore to deal with them, while preparing for a confrontation with the former dominant American power, which he considers inevitable.
The new model and its contradictions
The arrival of Xi Jinping at the head of the CCP in 2012 clearly marked a shift away from Deng Xiao Ping’s model of dealing with the Western economic order in order to reap the full benefits of globalization in terms of rapid catch-up. The results are indeed impressive, with GDP per capita rising from less than $200 to nearly $12,000 this year, now above the world average. Above all, its development indexes are worthy of developed countries, such as for schooling or the average life expectancy, which in 2021 will have surpassed that of the United States (77.1 versus 76.1).
From now on, the prospect of becoming the world’s leading economic power for obvious reasons of size, and therefore of imposing its political, ideological and technical standards, is becoming incompatible with the pursuit of this strategy for both the West and China. Politics is now taking precedence over economics. Growth is no longer the number one objective, even if an alternative line recently proposed by Professor David Li of Tsinghua University in Beijing recommends not taking the plunge too soon and continuing to give priority to economic growth, since the gap with the Western world, whose per capita GDP is on average three (EU) to four times greater (USA), remains wide. What is the change of economic model at stake during the 20th Congress?
There are, of course, short-term emergencies, such as whether or not to continue with the zero covid policy, the management of the real estate crisis, or monetary policy to avoid too sharp a depreciation of the yuan and the return of inflation. What is certain is that Congress will not announce a big stimulus policy as in the past, even though youth unemployment is officially estimated at 20%. Pragmatism will probably prevail here by ruling out any break with world trade. Hence Beijing’s obvious discomfort with the Russian-Ukrainian war.
But it is the medium-term challenges that prevail in a congress that meets every five years and that has its eyes riveted on the centenary of the founding of the Republic of China in 1949.
* There is the obvious demographic challenge, since the cancellation of the one-child policy is not helping the birth rate, so that China’s population could fall back to between 1.4 and 1.2 billion by 2050. Its working population, already in decline, could fall from 986.5 million today to 767 million by that time, while the proportion of people over 60 years of age would rise from 18% to 25%, or 300 million people. It is the entire retirement system that needs to be urgently reformed.
* Then there is the ecological challenge of climate change, which is hitting harder and harder, as we have seen with the droughts and floods that have reached new records this year. And this despite the upheaval of the Chinese energy mix in favor of renewables, which are now overtaking nuclear power and which should both replace coal by 2070. However, the war in Ukraine has instead revived it for reasons of shortage and cost of electricity.
* Finally, there is the technological challenge, as China is now increasingly close to the so-called “technological frontier”, so that it can no longer rely on simple copying. Especially since developed countries are placing more and more embargoes on the latest technologies, as President Biden has just announced for semiconductors, for example. On the other hand, China can no longer rely on its almost unlimited pool of disciplined and cheap labor to turn back the clock. Other countries such as Vietnam or India are clearly taking over, including for reasons of dependency, as Apple has just shown for the assembly of its next iPhone.
These three challenges draw the economic model of the XXth Congress in coherence with the Leninist and nationalist political model of refocusing power and geopolitical confrontation with the United States. But it is not free of contradictions in each case:
* Less growth but more intensive, with a priority on advanced technologies for both civilian (e.g. health) and military reasons. But how to ensure that a Leninist system can be innovative while the geopolitical confrontation is bringing more and more severe embargoes? The regime continues to target 5-6% growth in the decade, but it could fall below 3% this year, largely due to a zero covid policy linked to the low effectiveness of Chinese vaccines. One third of the so-called vulnerable people are still not vaccinated today.
* A more egalitarian growth then, because the Chinese society can no longer bear inequalities, and in particular the young people who can no longer afford to live because of the price of real estate, and therefore to marry and start a family. The contradiction here is with the reinforcement of a single party regime that generates systemic corruption and the predation of resources by the party elite.
* Finally, a relative closure of China, as we have seen very clearly over the last two years. This is of course to limit the risks of “ideological contagion” but also of external economic dependence in the face of any international crisis, as Russia is currently experiencing. The contradiction here is that China still needs foreign markets because its domestic demand is not dynamic enough due to the precautionary savings of the old people (retirement) and the youth (unemployment), and because China is already overburdened by increasingly useless public over-investment. It also needs to build more than ever a system of alternative alliances as it did with the New Silk Roads (OBOR or BRI) Xi Jinping’s baby. But Beijing’s partners do not want to be locked into a camp against another as we see in Southeast Asia or Africa.
The future will tell how China will manage these contradictions during the 20th Congress. Nothing is written in advance and firmness does not mean confrontation. This is the contradiction of China’s partners including India.