China’s President Xi Jinping reportedly is moving down a Maoist path. If so, this is probably the most important development of 2021.
The Wall Street Journal reports on this development in a story with the headline: “Xi Jinping Aims to Rein In Chinese Capitalism, Hew to Mao’s Socialist Vision.” The subtitle is: “Going beyond curbing tech giants, [Xi] wants the Communist Party to steer flows of money and set tighter limits on profit making.”
The Journal reports that Xi’s campaign has produced more than 100 regulatory and policy directives over the past year. The directives are said to have shattered the power of the companies that dominate China’s new economy — the Internet giants Alibaba and Tencent and a real estate behemoth called Evergrande.
USA Today also reports on Xi’s campaign. It notes the return of “self-criticism,” that oppressive communist practice:
Xi Jinping hit the road this week to Hebei, the province surrounding Beijing, whose 73 million residents have built an economy the size of Colombia’s. Instead of praise, Xi pushed Hebei’s leaders to criticize each other, and themselves, on camera.
“Criticisms and self-criticisms are forceful weapons to solve contradictions within the party,” Xi told them, in his far more important role as boss of China’s ruling Communist Party. “It’s a dose of good medicine,” he said, to boost unity, rectify decadent work styles and impose “democratic centralism.”
USA Today recognizes these words for what they are: “language and methods drawn from the often bloody rule of Chairman Mao.”
What’s really going on here and what are the implications? It would take someone far more knowledgeable than I am to answer these questions with confidence.
Even someone less knowledgeable can see the obvious. If China truly moves in a Maoist, cultural revolution direction, it means (1) tremendous suffering for a great many Chinese and (2) the economic weakening of America’s prime adversary. But the American economy is tied to that of China, so the implications of the second point are complicated.
Attacking local leaders who have helped build a hugely successful economy is a recipe for economic setback. So is shattering the power of the country’s most successful companies. “Democratic centralism” is a recipe for economic deterioration, as the history of communism demonstrates.
The economic warning signs are already present. Reportedly, China’s top six technology stocks have lost more than $1.1 trillion in value over the past six months. Evergrande, the real estate developer, may be on the verge of defaulting on tens of billions of dollars in debt.
But is this really the path Xi intends to take on a long-term basis? And if so, why?
The USA Today report quotes one analyst who views recent developments as “another step in a serious campaign to make the Communist Party work better and look more responsive – to both the public and to those in the party ranks concerned about shortcomings in the way the country is currently run.” In other words, this is partly a PR move and partly a short-term correction.
This was an accurate way of viewing an earlier revival of Maoist-style self-criticism instituted by Xi eight years ago.
However, another view of the present situation takes Xi’s actions much more seriously. David Ignatius of the Washington Post writes:
Xi’s leftward turn represents a major change in the management of the Chinese economy, in the view of a half-dozen experts I’ve consulted over the past week. It has the idealistic goal of “common prosperity” and a fairer distribution of China’s new wealth. But Xi will drive these changes using the ruthless instrument of an authoritarian, one-party state — and you can already see the purges and figurative “dunce caps” for those he views as obstacles.
The Chinese leader speaks internally of “amalgamation” of the public and private sectors, according to Christopher Johnson, a former top CIA China analyst who now heads the consulting firm China Strategies Group. Johnson describes an explanation often heard in elite circles: “Xi wants the state sector to have more market discipline, and the private sector to have more party discipline.” The result is a severe squeeze on what Xi views as “undisciplined” entrepreneurs.
Ignatius’ view is consistent with the Journal’s reporting, from which he draws. He cites this bit from the Journal article which seems telling:
The most chilling detail in Wei’s account involved Vice Premier Liu He, a market advocate who has over the past decade been China’s most important contact with the West. The article noted that Liu offered “self-criticism” for allowing the ride-sharing company Didi to float a $4.4 billion IPO this summer. This humiliation of a senior official was an echo of Mao’s Cultural Revolution, which eviscerated China’s educated middle class in the 1970s.
I assume that many members of China’s elites resent their lack of freedom. If, in addition, they are to be persecuted for their successes, fear of China’s coming ascendency may soon recede.
Why, though, would Xi revive ruinous Maoism? The obvious explanation is lust for power. The communist party’s reduced control over the private sector may be good for China’s economy, but it’s not good for a power hungry party head.
Ignatius puts it this way:
Xi is a cunning and ruthlessly successful politician; since taking power in 2013, he has purged a generation of leaders in the Communist Party, the military, and the intelligence and security services to gain absolute control. His hubris is that, like Mao, he now seeks to become a man-God, whose thoughts are holy writ.
Xi’s unabated hunger for power is evident in his drive for a third term as party leader. That would break the two-term rule that has prevailed in China’s modern history and provided the checks and balances of group leadership. “China had solved the major problem of a one-party state — succession. Now they are un-solving it,” argues a former top-level U.S. national security official.
If Ignatius and his sources are right, then Xi’s mini-Maosim is terrible news for China. It may also be terrible news for Taiwan, and therefore a major threat to peace.
However, if the U.S. is able to avoid war, Xi may end up doing for America what America arguably is incapable of doing for itself — keeping us ahead of China in the economic pecking order.