Chinese Communist Party's Third Plenum Expected to Dodge Political Reforms

By Parameswaran Ponnudurai
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Xi Jinping (C) raises his glass during the 64th National Day reception at the Great Hall of the People in Beijing, Sept. 30, 2013.

When Chinese President Xi Jinping unveils his much-anticipated "comprehensive" reform package at a meeting of the ruling Chinese Communist Party's top brass beginning this weekend, he is unlikely to address the metaphorical elephant in the room — political reform.

He will instead focus on setting the agenda for economic reform for the next decade.

Some are already speculating that the market reform initiatives he would announce at the plenary session of the party's 205-member central committee—the third since Xi took over the helm late last year—would make the Nov. 9-12 meeting one of the three most important events in Chinese economic history.

They say the so-called Third Plenum meeting in Beijing will rival the 1978 plenum when paramount leader Deng Xiaoping declared the opening-up of China's economy and the 1993 plenum when Premier Zhu Rongji announced the "socialist market economy."

Indications are that the upcoming economic reforms are intended to rein in state-owned enterprises; open up key sectors such as energy, finance, and telecoms; and lead to the internationalization of the yuan currency and major changes to land and household registration systems.

But the Third Plenum is expected to stay away from political reform in a bid to keep the party's tight grip on power in the world's second largest economy after the U.S., analysts say.

"Political reform is off the table I think maybe by precedence and practice," said Randy Schriver, head of the Washington-based Project 2049 Institute. "That's not to say that they are prohibited from discussing political reforms at the Third Plenum."

But he said the agenda for economic reform has become a key focus for China, which after three decades of double-digit growth driven by exports and investment is attempting to shift its strategy for economic expansion largely through domestic consumption.

"Many people see the two [economic and political reforms] as linked, but I think this particular leadership seeks to de-link them and wants to create expectations related only to the former, not the latter," Schriver said.

The Chinese leadership, he said, is wary of allowing any political opening following the failure to combine political openness with economic reform in the ex-Soviet Union under Mikhail Gorbachev.

"I think the Chinese are very mindful of what happened when the former Soviet Union pursued both economic reform and liberalization as well as political reform and the whole thing came crashing down," said Schriver, a former senior U.S. State Department official in charge of East Asia policy.

Stronger will

Many had thought that the new Xi-led seven-member Communist Party politburo standing committee—four of whom are princelings, or younger relatives of party veterans—would have a stronger will to carry out political reform, having more political capital and resources than did the team led by his predecessor Hu Jintao.

Some of the early rhetoric and analysis surrounding the build-up to the Third Plenum suggested the possibility of deep and comprehensive economic, political, and social reform, said Douglas Paal, vice president for studies at the Washington-based Carnegie Endowment for International Peace.

"By now, however, it is clear that political reform will take a back seat to economic reform at this stage," he said.

"The recent detentions and arrests of political and human rights activists, coupled with internal party 'mass line' and 'self-criticism' sessions, indicate that the new leadership is wary of risking economic and political reform simultaneously, if ever," said Paal, who was previously on the U.S. National Security Council as director of Asian Affairs.

The mass-line campaign encourages the Communist Party leaders to remain close to the people to understand and address their needs.

But Paal said that although the party under Xi has decided to strengthen internal discipline and sternly attack pervasive corruption, it "is unready to contemplate a more liberal course or a fundamental change in the nature of its governance."

Over the past year, the Chinese leadership under Xi has tightened media censorship and instructed scholars at China’s universities, think tanks and other institutions to avoid speaking about "sensitive" issues such as freedom of the press, civil society, citizens’ rights, past party and government mistakes, and judicial independence.

"Xi and his six colleagues on China’s super-powerful Politburo Standing Committee have wasted no time in signaling that their aim is to preserve political control and double down on ideology," noted Larry Diamond, a professor of sociology and political science at Stanford University and a senior fellow at the Hoover Institution, a conservative policy think tank.

He said that if China is to avert a systemic political crisis, its leaders must start implementing "real political reform."

"It is not only 1.3 billion Chinese, but the entire world that has a huge stake in this process," he said in a commentary in the Atlantic, a leading American journal.

Political crisis brewing?

Diamond said that five or 10 years ago, most experts on China regarded predictions of the early demise of Communist Party rule as ridiculous or fanciful as they believed the party had become extraordinarily institutionalized and effective at governing.

"But today—even with all of China’s impressive economic achievements—more and more American and other China experts believe there is a political crisis brewing," he said.

"In clinging to its absolute political monopoly, in resisting any serious effort to separate the party from the state and the judicial system, in demonizing and arresting—or in the recent case of Peking University professor Xia Yeliang, firing—dissenting voices calling for democratic reform, the CCP is skating on thin ice," Diamond warned.

But some analysts believe that Xi's economic reforms at the Third Plenum, which the party leadership says will be comprehensive and unprecedented, could set the stage for political changes in the long term.

The Xi leadership has signaled an embrace of “comprehensive reforms” at the meeting, which include economic, social, political, cultural, and ecological transformation, instead of merely economic reform, said Cheng Li, a top China expert at Washington-based Brookings Institution.

"This implies that if President Xi is able to improve the lives of the middle class in the coming years, he may consider embarking on political and legal reforms," he said.

"After all, an innovation-led economy requires political openness and media freedom; service sector-centric development needs a stable environment with rule of law; a vibrant consumer culture must be accompanied by a maturing civil society."

Tough anti-graft campaign

Cheng Li, who grew up in Shanghai during the 1966-76 Cultural Revolution, said that despite concern over a trend toward political conservatism, Xi and his leadership team have earned public praise for their tough anti-corruption campaign, "which has already changed the behavior of many Chinese officials."

While some argue that Xi’s governing strategy, characterized as politically conservative and economically liberal, will not be sustainable since economic development and political development are closely linked, Cheng Li said the view is correct only in theory.

It "overlooks the importance of implementing reforms in a sustainable sequence and the fact that market reforms will both pave the way for political changes and provide the political capital for Xi to pursue other changes in the near future," he said.

Xi could also face pressure to make political changes as a result of his economic reforms.

"Economic reform is challenging, and it will lead to demand for more of the political change that Xi is limiting right now," said Ian Bremmer, president of Eurasia Group, a global political risk research and consulting firm.

"That’s the risk," he said in a Reuters news agency opinion piece. "But the reward is tangible: a more efficient, dynamic economy that can be sustainable even without the government fueling it."

While Xi has already done more for that cause than Hu and his premier Wen Jiabao could, and in far less time, Xi "faces a Goldilocks challenge, where moving too slowly could produce an angry clamoring for more progress, but changes that come too rapidly could destabilize the economy altogether," Bremmer said.

In a bid to strike a balance, Xi may have plans to give limited political freedom to his citizens while keeping the economy of the world's most populous nation expanding, possibly emulating the administration styles of business friendly and politically stable Singapore or Hong Kong, some analysts say.

"I always think China's leaders probably have a strategic goal of how to create a Singapore or even a Hong Kong—times 1.4 billion—where they have a very modern competitive economy but single party political control with certain restrictions on political participation among the population," Schriver of the Project 2049 Institute said.

"That's an untested proposition that's difficult to achieve."


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