[NSP Report 54] Prospects for Stability Amidst Changes in China's Politics and Economy

Seo Bong-kyo

Professor of Chinese Studies, Dongduk Women's University. He holds a Ph.D. in Economics from Seoul National University. He previously served as a Senior Researcher in the Overseas Business Research Team at Samsung Financial Research Institute (specializing in Chinese finance) and as a Senior Researcher at LG Economic Research Institute (specializing in the Chinese economy).

Lee Dong-ryul

Professor of Chinese Studies, Dongduk Women's University. He obtained a Ph.D. in Political Science from the Graduate School of International Relations at Peking University in 1996. He has served as the Editor-in-Chief of the Association for Modern Chinese Studies and is the Chairman of the China Research Panel at the East Asia Institute. His main research areas include China's foreign relations, China's ethnic minorities, and Chinese nationalism. His recent works include "China's policy and influence on the North Korea nuclear issue: denuclearization and/or stabilization of the Korean peninsula?", "Speaking of China's Future" (editor), "New Frontiers in Chinese Foreign Policy Research" (co-author), "China's Territorial Disputes" (co-author), and "The Chinese Government's Sinicization Strategy in Tibet: Current Status and Implications."

I. Introduction

China is aiming for the "comprehensive realization of a moderately prosperous society in all respects" by 2020, the centenary of the founding of the Communist Party. To achieve this vision, China faces the challenge of maintaining its high growth trajectory of the past three decades while effectively resolving or managing the 'crises of success' accumulated since the reform and opening-up period. In particular, the fifth-generation leadership, which emerged in 2012, is confronted with various socio-political crises and challenges of the late reform era, unlike its predecessors. These include crises of legitimacy due to ideological vulnerabilities and corruption, crises of social cohesion stemming from polarization, and crises of growth sustainability related to energy and environmental issues.

The "12th Five-Year Plan" (規劃), finalized at the fourth session of the 11th National People's Congress (NPC) in March 2011, specifically outlines these national challenges. Based on this, the key domestic political and economic tasks for assessing whether China can stably achieve its rise to a superpower over the next decade can be broadly summarized into three categories.

First, will the large-scale generational change to the fifth-generation political elite, occurring between 2012 and 2013, be successfully established? Furthermore, what continuities and changes in systemic characteristics and policy orientations will the newly formed fifth-generation political elite exhibit compared to the previous generation?

Second, can China maintain political and systemic stability over the next decade by adhering to its so-called "Chinese-style political reform" and "Chinese-style development model," while deferring Western-style political reforms? From a Western perspective, significant questions have been raised about the continuation of "growth without political reform" over the past 30 years, and it is predicted that China will face a crisis due to this issue in the future.

Third, can China achieve balanced growth by resolving or managing the issues of social polarization, corruption, and unemployment that have accumulated during the high-growth period of the past three decades, through the "improvement of people's livelihood" and "strengthening of social construction" outlined in the "12th Five-Year Plan?"

It is no exaggeration to say that the sustainability and stability of the Chinese system depend on the continuation of economic growth. If China's high economic growth falters, various crisis factors that were masked by the growth myth could surface, potentially leading to a broader economic crisis. Simultaneously, the continuation of economic growth is likely to be significantly influenced by non-economic factors. Political system stability is the most crucial variable, and in China's case, the stability of political elites is particularly important. As with the previous generation, the key will be whether the fifth-generation political elite can maintain political stability through consensus. In essence, the stability of China's power politics and balanced growth will organically influence each other, becoming key factors determining the stability of the Chinese Communist Party regime in the future.

II. Emergence and Characteristics of the Fifth-Generation Political Elite

1. Prospects for the Emergence of the Fifth-Generation Political Elite

Considering that power transitions in China since Deng Xiaoping, particularly the transfer of power from Jiang Zemin to Hu Jintao, have been remarkably stable, allowing for policy continuity in broad terms, it is highly probable that the power transition to the fifth-generation leadership, which is already at the center of power, will proceed as scheduled without major disruptions. China's unique model of power transition is entering a phase of consolidation. The nine-member Politburo Standing Committee system is also becoming established. It expanded from seven members at the 16th Party Congress to nine, and this nine-member structure was maintained at the 17th Party Congress, indicating institutionalization.

Furthermore, Xi Jinping is expected to be confirmed as General Secretary of the Party and President of the State at the 18th Party Congress in the autumn of 2012 and the 12th National People's Congress in the spring of 2013, respectively. Xi Jinping is following the process and procedures that Hu Jintao undertook to succeed Jiang Zemin. After being elected as one of the nine members of the Politburo Standing Committee at the 17th Party Congress in October 2007, Xi Jinping was appointed Vice President of the State at the 11th National People's Congress in 2008. Subsequently, at the Fifth Plenary Session of the 17th Central Committee of the Communist Party of China in October 2010, he was finally elected Vice Chairman of the Central Military Commission, thereby solidifying his position as the top leader of the fifth generation and dispelling previous controversies.

The 17th Party Congress experimented with power succession in a way different from the past. It shifted from the previous method of a single designated successor to a competitive dynamic between two individuals, Xi Jinping and Li Keqiang. The regimes of Jiang Zemin and Hu Jintao were extensions of the reform and opening-up era, and the succession system was based on Deng Xiaoping's designation. The newly emerging fifth-generation political elites, as a result of compromise among factions, have culminated in a two-person competitive structure. The future formation of a "two-top" system where these two individuals, with their differing political backgrounds and inclinations, share the roles of General Secretary and Premier represents an unusual attempt in Chinese elite politics.

Although the fifth generation's two-person competitive system is a new endeavor, if it is also a product of factional compromise, it is likely to prioritize consultation and compromise over factional confrontation. Moreover, considering Xi Jinping's personal leadership and the characteristics of the new leadership, it is highly probable that the collective leadership system will become even more pronounced than under the Hu Jintao administration. Specifically, the collective leadership system, where the nine members of the Politburo Standing Committee each take responsibility for their respective areas, will be further strengthened. Consequently, policy decisions are less likely to be monopolized by a single individual or a small group, and are expected to become relatively more complex yet refined.

Li Cheng identifies two factions within the Communist Party of China: the "princeling party" (太子黨) and the "Shanghai faction" as the core of the "Elitist" group, and the "Communist Youth League" (共靑團) as the core of the "Populists" (Li 2010). In reality, even if factions exist within China's political elite, clearly distinguishing them is difficult. While there may be confrontation and conflict between factions, instances where these are openly displayed are rare. Although factions are known to exist under the Hu Jintao administration, policy disagreements have only surfaced occasionally over the past nine years, with few cases of serious factional conflict being publicly expressed.

Paradoxically, the greater the awareness of the crisis surrounding the diverse and complex domestic issues among China's political elites, the more widespread the consensus on unity and stability within the political elite has become. The recent Jasmine Revolution in the Middle East has also served as a significant catalyst. This internal stabilization of the elite serves as the most robust pillar for maintaining stability in China despite various political and social challenges. In other words, a consensus has formed that division leads to crisis.

This can be seen in Hu Jintao's remarks, quoting Deng Xiaoping: "The key to China's problems lies in the Politburo, especially the Politburo Standing Committee; if no problems arise in this area, China will remain as stable as Mount Tai" (Xinhuanet 2007). This can be interpreted as the logic that the stability of the Chinese system depends on elite politics, the most important issue in elite politics is power succession, and if no problems arise in power succession, China's stability is guaranteed. Conversely, this suggests that a sense of crisis and consensus regarding regime maintenance exists within the power elite. A consensus exists regarding the crises that could be caused by internal divisions due to policy disagreements or the external exposure of conflicts, not to mention power transitions. Therefore, internal unity among political elites is prioritized as an important value, and even if internal disagreements arise, they are likely to be suppressed from being exposed externally.

If the Xi Jinping-Li Keqiang administration is established as scheduled after 2012, it will appear to be a combination with greater heterogeneity than any previous system. However, given the current trend, there is a shared understanding that the next decade is a crucial strategic window of opportunity that will determine the success and direction of China's rise. This common understanding will serve as the source of power for mending and coordinating conflicts. Within the political elite, a sense of shared crisis of mutual destruction, along with a sense of shared expectation for coexistence, is being formed. "People's livelihood" has been consistently emphasized by the Hu Jintao government, and it was also a keyword in the "12th Five-Year Economic Development Plan." This suggests that the fifth-generation elite will fundamentally continue to pursue livelihood-focused politics. This indicates that China's political elites accurately grasp the nature of the era's demands and crises facing the Communist Party, and this shared sense of crisis is acting as a driving force for elite unity.

2. Characteristics and Policy Direction of the Fifth-Generation Political Elite

The changes in the nature of China's political elite have proceeded in conjunction with changes in the constitution of the Communist Party of China, and will therefore serve as an important indicator for forecasting future political changes in China. The Party transformed from a revolutionary party that led class struggle and socialist revolution during the Mao Zedong era to an administrative party that drives development through reform during the reform period. It is now gradually entering a transitional phase where changes toward becoming a political party are anticipated (Zheng Yongnian 2007, 32-41). The official inclusion of the "Theory of Three Represents" in the Party Constitution during the Jiang Zemin era itself reflects the reality that the Communist Party is inevitably transforming from a class party to a national party and from a revolutionary party to a ruling party.

Along with the changes in the Party's constitution, the nature of the ruling elite of the Communist Party has also evolved. While revolutionaries constituted the ruling elite during the Mao Zedong era, technocrats and experts were recruited as the ruling elite during the Deng Xiaoping and Jiang Zemin eras. Following the Hu Jintao period, which is a transitional phase towards becoming a political party, the newly emerging fifth-generation political elites are being recruited not as technocrats with engineering backgrounds like their predecessors, but as politicians and social managers with humanities and social science educational backgrounds who are interested in social issues.

The fifth-generation elites were generally born after the founding of the People's Republic of China, experienced the Cultural Revolution in their teens, and joined the Communist Party in their early to mid-twenties during the late Cultural Revolution and the period of seeking reform and opening-up. They share the common characteristic of having consolidated their positions primarily through economic achievements in local politics during the reform and opening-up process, and formally entered the central political stage in 2007 (17th Party Congress) as members of the Politburo. Furthermore, while the fourth generation can be characterized as technocrats, the fifth generation possesses administrative expertise, primarily with majors in humanities and social sciences. The fifth-generation leadership generally perceives livelihood stabilization through the resolution of various social issues as a primary policy objective.

Notably, they share the common experience of being part of the so-called "lost generation" who were students during the Cultural Revolution, having been born after the founding of the PRC. They also experienced the Tiananmen Square incident in 1989 during their mid-level cadre years. Therefore, despite having different policy directions, these shared experiences have instilled in them the understanding that unity and stability are paramount. They harbor a sense of crisis that internal party divisions could ultimately lead to the collapse of the party system and China's downfall. Moreover, as elites who have played a significant role in realizing China's rise since the reform and opening-up, they possess a stronger sense of self-confidence and national pride than any previous generation.

The emergence of the fifth-generation political elite signifies a major generational change after a decade. Nevertheless, in broad terms, policy continuity is expected to be stronger than policy change. The primary reason for this is that, although there is a difference in the method of power transfer—from the previous method of designation by the predecessor to a competitive approach—as long as stable power succession is maintained in the absence of democratic procedures, it is highly likely to imply policy continuity rather than abrupt policy changes. In other words, because the influence of the predecessor still plays a role in China's power succession, a certain degree of policy continuity is likely to be maintained... (continued)