When the Communist Party wrapped up its landmark four-day meeting on Tuesday, observers were left with mixed signals about the next stage of China’s economic reform but clear signs of the growing power of its supreme leader, Xi Jinping.
First, the mixed, if not conflicting, messages about reform. A policy blueprint issued at the end of Central Committee’s gathering said for the first time that market forces will play a “decisive” role in the economy, rather than a “basic” role as previously stated.
But hopes for bolder steps towards a market economy have been dampened by the party elites’ assertion of the essential role of public ownership. In its communiqué, the Central Committee stressed the need to “encourage, support and guide” the private sector, but added that state firms will remain the “mainstay” of the economy.
These comments and the release of the otherwise long, vaguely worded communiqué after the gathering of more than 370 members of the party’s highest echelon sent mainland and Hong Kong stock markets down the next day, reflecting the gulf between expectation and reality.
Media reports said more details of specific new policies will be available when the party issues the full version of the communiqué.
The policies may lack clarity now but there are ample signs already about the growing power of Xi, with the decision to create two super-committees — one on reform and another on national security.
The leading group on deepening reform will be held responsible for macro planning and design, coordination, implementation and supervision of reforms. Xi, who is head of the party, state and the military, is tipped to head this body. Xi is also expected to chair the national security committee, which is said to be modeled on the United States National Security Council.
The security committee will act as the highest decision making body on domestic and external security-related policies and strategy. It is widely expected to provide Xi with a new platform to wield influence over the country’s diplomatic, intelligence, military and law enforcement agencies. Importantly, it will help strengthen Xi’s power to navigate vested interests in the military, which have resisted the idea of a national security body since it was broached by former party chief Jiang Zemin in the 1990s.
The launch of the two top-level bodies marks a major step in Xi’s leadership of the ruling party and its capacity to ensure reforms are fully implemented.
“[We] must strengthen and improve the leadership of the party, give full play to the role of the party in overseeing the overall situation. [We] must play a leadership role in enhancing the leadership and executive capability of the party to ensure the next stage of reform is a success,” the plenum’s communiqué said.
It was along those same lines that the national security committee was given the go-ahead at the plenum.
It is no doubt just coincidental but the deadly terrorist crash at Tiananmen Square just days before the plenum convened was a sharp reminder to party leaders about the separatist activities rampant in some ethnic minority regions.
Governments at all levels also face severe challenges from the rise in civic activism reflected in disputes between people, government and business over issues ranging from environmental protection to labour rights.
On the external front, US President Barack Obama’s “rebalancing” in the Asia-Pacific region and the hawkish stance of Japan’s Prime Minister Shinzo Abe have stoked Beijing’s longstanding fears about what they deem as hostile forces bent on causing trouble in China’s modernization. Beijing has developed a greater sense of urgency to catch up in the global security game since the Edward Snowden saga brought the US intelligence agencies’ eavesdropping program to light.
As the Communist Party took stock of its three-decade reform journey at its 18th national congress in November last year, they identified two major tasks crucial to building a moderately well-off nation by 2020.
With bottlenecks appearing to slow the economic engine, the party vowed to venture into the “deep-water zone” of reform, so much so that it emerged as the main theme of the policy-setting third plenum.
The ascendance of the Chinese economy to second in the world has meanwhile deepened a sense of crisis in the ruling party to ward against domestic and external threats to the country’s hard-earned economic success.
The mixed signals of reform direction in the plenum’s communiqué show that the policy details of how this is to be achieved remain a subject of debate and compromise. But the formation of two super-panels on reform and security is an unmistakable sign that Xi is keen to expand the party’s power to take the decades-long modernization drive to a new height.
Chris Yeung is deputy chief editor of the Hong Kong Economic Journal. This column appears every Friday.
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