The country’s recent leadership transition was widely depicted as a triumph for conservative hardliners and a setback for the cause of reform—a characterization that has deepened the gloominess that pervades Western perceptions of China.
In fact, nothing could be further from the truth.
Xi Jinping and Li Keqiang—the top two officials in the new governing council, the Standing Committee of the Politburo—are both well-educated, well-traveled, and sophisticated thinkers who bring a wealth of experience to the many challenges that China faces. As so-called fifth generation leaders, they continue the steady progress in competence that has marked each of the leadership transitions since the emergence of Deng Xiaoping in the late 1970s.
While it is entirely premature to judge the style and direction that the new leaders will take, three early hints are worth noting. First, Xi’s assumption of power is more complete than was the case in earlier transitions. By immediately taking the reins of both the Communist Party and the Central Military Commission, he has greater opportunity to put his personal stamp on policy than his predecessors had at the start of their administrations.
Yes, China governs by a consensus of the Politburo Standing Committee. But Xi is well-positioned to drive the thinking of a now-leaner decision-making body, which has been downsized from nine members to seven. Moreover, he has long favored a market-friendly, scientific approach to economic development, which will be vital to the country’s future.
Second, Li—the presumptive premier—could be the big surprise in the new leadership team. Unlike the current premier, Wen Jiabao, who was third in the chain of command for the past ten years, Li has been elevated to No. 2, which suggests a greater potential for power-sharing between the party and the government at the top of the new team.
With a doctorate in economics, Li, who as executive vice premier headed the all-important Central Committee Finance and Economy Leading Small Group, is especially well-equipped to deal with the long-awaited structural transformation of the economy. Indeed, having overseen China 2030—an extraordinary joint report recently produced by the World Bank and China’s own high-level think tank, the Development Research Center—he has a deep understanding of the roadmap the country must embrace. His promotion could be a major step up from Wen, who emphasized rhetoric and strategy more than implementation.
Third, and contrary to prevailing wisdom in the West, Wang Qishan, one of the country’s savviest and most experienced senior officials, has not been relegated to obscurity in his new position in charge of “discipline” on the Standing Committee. Yes, Wang has invaluable experience in the financial sector, and it would have been logical for him to assume similar responsibilities on the new leadership team. But as one of the top seven in the party hierarchy, he will still be able to weigh in on all important economic and financial matters, while assuming responsibility for tackling one of the toughest problems: corruption. Having known Wang for more than fifteen years, my sense is that he is very well-suited to this vital task.
The other members of the new Standing Committee bring a broad array of experience and skills to their new leadership positions. That is especially true of Yu Zhengsheng and the two Zhangs, Dejiang and Gaoli, who come from senior roles in three of the country’s most powerful and dynamic urban centers: Shanghai, Chongqing, and Tianjin. Their deep knowledge of the key role played by urbanization in driving economic development will be critical to broadening the structural transformation that China now faces.
The West is not only overlooking the new leaders’ enhanced skill set, but is also misjudging the current state of the country’s economy, which, while far from perfect, is not in crisis and in desperate need of a quick fix. In fact, China is emerging in reasonably good shape from yet another global slump. This gives its new leaders leeway between now and the National People’s Congress in March 2013 to focus on the development of implementation tactics for their strategic agenda.
None of this is to minimize the enormous challenges the country faces. But strategy is not the problem: The pro-consumption 12th Five-Year Plan lays that out with great clarity. The new leadership must now shift the focus to commitment and implementation of that strategy, namely through enactment of a new set of bold reforms, especially those related to the services sector, the social safety net and state-owned enterprises. Xi’s emphasis on the “top-level design” of reforms lends itself particularly well to this agenda, as does Li’s intimate familiarity with the detailed blueprint provided by China 2030.
Western observers, focusing on recent public statements by Xi and Li, highlight a dearth of comments in favor of economic or political reforms. But the same could have been said of the early utterances of Deng, modern China’s greatest reformer. As the writer Ezra Vogel notes in Deng Xiaoping and the Transformation of China, Deng’s first public statement after his political rehabilitation in 1976 was: “Marxism-Leninism and Mao Zedong Thought constitute the guiding ideology of the party.”
Those were not exactly enlightened words, especially in view of what was shortly to come. Yet Deng seized the moment at a critical juncture that is strikingly reminiscent of the one now faced by Xi and Li.
As is the case in any country’s leadership transition, no one knows for certain whether the incoming administration is up to the multiplicity of challenges they face. Since the days of Deng, China has had an uncanny ability to rise to the occasion and meet challenges head-on.
The new generation of leaders has the right skills and experience for the task. Western biases notwithstanding, we will know soon enough whether they can translate strategy into action.