Are China’s Domestic Politics Beginning to Erode its Governance?
from Asia Unbound and Asia Program

Are China’s Domestic Politics Beginning to Erode its Governance?

Chinese authorities have launched a regulatory blitz.  But its haste and scope raise questions as to whether technocratic governance of the economy is eroding as China's politics swings in the direction of one-man rule.
Shanghai's cityscape illuminated at night.
Shanghai's cityscape illuminated at night. Gropius Xi/EyeEm/Getty Images

Recent months have seen Beijing launch a regulatory blitz that has targeted sector after sector of the Chinese economy with tough crackdowns – private tutoringentertainmentreal-estate, and now financial institutions.   

As economist Barry Naughton has noted in an excellent recent online lecture at Stanford University, these moves seek to rapidly consolidate a new model of “expanded government steerage” of China’s economy.  This is not entirely new.  It is an outgrowth of Beijing’s efforts since the early 2000s to pivot towards a more state-led development approach characterized by an aggressive industrial policy.  

More on:

China

Xi Jinping

Chinese Politics and Society

East Asia

Asia

However, as Naughton notes, two new features mark this “summer blitz”:  

  • Dramatic proliferation of policy objectives.  These include Xi Jinping’s new “common prosperity” agenda, an aggressive effort to raise birthrates, de-risking and increasing control over the financial system, and data security, among others. 
  • Reliance on “hasty and ill-conceived” regulatory measures, which have lost the “market-conforming character” that were a hallmark of Beijing’s industrial policies pursued since the early 2000s. 

What explains this haste?  

Naughton and Jude Blanchette argue (in a follow-up piece) that China’s political calendar is driving these shifts. They argue that this is a calculated gamble by Xi to try and roll out an ambitious domestic political agenda to justify his continued domination in the lead-up to the 2022 Party Congress - which is virtually certain to see Xi confirmed as China’s top leader for at least another five years, and potentially raised up to a status resembling that of Mao himself.  

A second – and entirely complementary – reason may lie in the ideological shifts now taking place in the Party itself.   

More on:

China

Xi Jinping

Chinese Politics and Society

East Asia

Asia

Shifts in state policy have coincided with a steady escalation in the cult of personality surrounding Xi Jinping himself.  Since 2019, the Party’s main ideological journal, Qiushi (Seeking Truth) has devolved into a one-man show, with every issue leading off with a reprinted version of a speech by Xi.  The same trend is now occurring with respect to the Party’s flagship paper, Renmin Ribao (People’s Daily).  The past year has seen a steady proliferation of lengthy articles regurgitating Xi’s quotes – sometimes for pages on end.  Xi’s thoughts have been serialized as a regular column, his name repeated ad nauseum, his sayings flagged in colored text boxes reminiscent of the days when the same paper carried Mao’s quotations in bright red print. 

All of this amounts to the “great stultification of China.”  Demands for political orthodoxy and rigid displays of conformity with the views of China’s top leader are steadily seeping deeper into the bureaucracy. Slowly but surely, what limited space had emerged in China over the course of the post-1978 reform era for reasoned debate over policy in state and society alike is being crushed.   

As if to drive this point home, the Cyberspace Administration of China removed Caixin, China’s most well-known business publication, from the list of approved news sites on October 21.  One of China’s last independent-leaning media outlets, Caixin had managed to both retain a reputation for aggressive investigative journalism and survive the steadily worsening atmosphere that had seen the asphyxiation of other similar outlets. 

Centralization of power in the hands of a single man.  A further closing down of channels of information to accurately reflect back bad news to top leaders. This is precisely the political ecosystem which can produce a rapid proliferation of sycophants, echo chambers, unsteady implementation, and rapid shifts in direction depending on the whims of the top leader – in China just as elsewhere.  

And one very real question posed by the “summer blitz” of Beijing’s regulatory operations is whether the erratic nature of its implementation is but a forerunner of yet deeper governance problems to come as China’s domestic politics continue to slide in the direction of one-man rule.