What a difference a year makes.
Late last year, Xi Jinping told an historic Communist party congress that it was at the dawn of a “new era” of Chinese politics and power and it was time for the nation to transform itself into a force in politics, the military and finance. A few months later in March, China's National Congress, or Parliament, voted to lift the limit on two terms for a President, effectively allowing Xi to stay in power indefinitely. By Christmas, there were reports he had mimicked Mao and required the Politburo to take part in self-criticism sessions to ensure loyalty.
Chinese President Xi Jinping (R, front), also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, meets with senior officers of the 71st Group Army of the People's Liberation Army. Photo: AFP / LI GANG / XINHUA
Elizabeth Economy’s fine book, The Third Revolution: Xi Jinping and the new Chinese State - one of the best books on China this year - examines the implications and contradictions of Xi’s rise. She argues that Xi Jinping’s time in office represents a “third revolution” for China, a moment when it is exerting its economic and military power to shift the way the world operates. This idea of a third revolution follows Mao’s 1949 revolution to install communism and then Deng Xiaoping’s decision to “open up and reform” the economy of China. To some Chinese, Mao united the country, Deng made it better off. Each changed China utterly. Economy argues that Xi is engaged in the same overhauling of China - and it is hard to argue.
There is no doubt of her scholarship. Her award-winning 2004 book The River Runs Black: The Environmental Challenge to China’s Future put the spotlight on the spiralling environmental problems. Ten years later, her book with Michael Levi, By All Means Necessary: How China’s Resource Quest is Changing the World, was a must-read. Economy was named by Politico magazine as one of the top 10 voices on China to follow in the US.
Chinese President Xi Jinping (left) and US President Donald Trump in Florida earlier this year. Photo: AFP
She began her academic career as an expert on the Soviet Union, finishing her dissertation under Condoleezza Rice, later the Secretary of State for George W Bush. She became a Gorbachev analyst for the CIA. Her focus then shifted to China. She is now director for Asia studies at the Council on Foreign Relations. All of which means she is highly attuned to a range of issues from how one leader can change the fortunes of a nation to the environmental issues that untrammelled development can bring - both strong points of her work.
A new revolution
China expert Elizabeth Economy Photo: Supplied
Economy argues that in many ways Xi is undertaking a contradictory revolution. China has expanded its presence on the world stage, shedding Deng’s maxim that the country should hide its strength and bide its time - a policy which became known as “hide and bide”. But at the same time, Xi is seeking to overcome what he has seen as weaknesses within; China was growing richer but needed to accelerate to pull all its people out of poverty, the Communist party needed to regain its ideological centre, shuck off corruption and put itself at the centre of the country’s growth.
“In the eyes of Xi, nothing less than dramatic, revolutionary change could save the party and the state and propel China forward to realise its full potential as a great power.”
In some ways, Xi’s vision, implies Economy, is “back to the future”. He has a vision of a great power, righting the humiliations of a century or more, embracing technological innovation and entrepreneurship. But he also has ordered crackdowns on dissent, reduced the spaces for NGOs to operate, put the Party at the heart of the State, has reversed many of the reforms of the big SOEs, constrained any spread of foreign ideas or culture and instituted curbs on free speech on the Internet.
Xi Jinping delivers a report to the 19th National Congress of the Communist Party of China. Photo: AFP / Xinhua News Agency
“Xi and the Chinese leadership have parted ways with their predecessors. They have elected a way forward that largely rejects the previous path of reform and opening up: instead there is reform without opening up. In a number of respects, the leadership has embraced a process of institutional change that seeks to reverse many of the political, social and economic changes that emerged from thirty years of liberalizing reform. The Chinese leaders have also shed the low-profile foreign policy advanced by Deng Xiaoping in favour of bold initiatives to reshape the global order.”
Party Central
The Communist Party is central to Xi’s vision. In 2013, Xi began a drive to shore up socialist beliefs among Party members. “If the ideological defences are breached, other defences become very difficult to hold,” he told the Party. More importantly, like many of China’s potentates before him, he became worried corruption was sapping public support for the Party and the State. The anti-corruption drive he has instituted has busted hundreds of thousands of officials. In 2015, some 300,000 officials were found guilty - at a prosecution rate of 99 percent. Where Economy is very strong is in pointing out the contradictions and challenges for every action. In the case of the anti-corruption drive, it comes with the publicity. The more Xi seeks to combat corruption, she argues, the more publicity there is and the more the public seeks the Party associated with corrupt officials and continues to rank it highly as a problem.
New analysis, The Third Revolution Photo: Supplied
Economy is especially good at teasing out two key challenges; how to handle the economy and the issue of pollution caused by growth. She charts how Xi touted the need for more reform and more openness in his early years but over time has shifted back to less market, more control in the economy. SOEs once seen as inefficient and ripe for breaking up, are now the pillars of the state in the economy. In 2014, Xi even touted them as rising “like a phoenix from the ashes.” But this focus, points out Economy, means Beijing has turned away from efficiency gains and productivity for a “far less ambitious course….The result after four years of economic reform is state sector that continues to incur ever-higher levels of debt, consume valuable credit and provide few new jobs.”
The book paints a frightening picture of China’s pollution problems, a legacy of years of rapid uncontrolled growth or ageing factories, but also posits Xi’s determination to clean it up. In 2015, none of the 300 cities which China monitors for air quality met World Health Organisation’s air quality standards. Water scarcity is also a problem. Economy, whose interest in the environment shines through in her analysis, points out that China had 50,000 rivers in the 1990s; it has 23,000 now. Water is being both polluted and pumped out for new developments, intensive industries and agriculture. The United Nations puts China as one of thirteen countries facing water shortages. The problem for Xi, as Economy points out, is that these are massive problems and ones that go to the heart of the health of the populace. Residents are directly affected - and will sometimes protest or revolt over the conditions. Local officials, faced with protests, will often threaten violence or prevaricate rather than trying to fix problems, she points out. But the Chinese leadership are making gains in trying to clean up the mess - the problem is that it is both a big problem and one that continues to grow as the economy grows.
Chinese President Xi Jinping in 2017 Photo: TYRONE SIU / POOL / AFP
Economy ends by trying to grapple with how countries, especially the United States, should engage with a resurgent China. The book predates Donald Trump’s decision to impose massive tariffs on China, a policy seen by Beijing as just one part of a new American drive to contain and constrict it. Economy advocates more efforts by Washington to understand and engage Beijing, more diplomacy, more entanglement, though she also believes America needs to strengthen its relationships with allies equally worried by China. That’s not an easy ask under Trump’s “America first” policy. She also argues that America needs to go back to the Trans Pacific Partnership agreement, which has been resurrected by many of its allies after it walked away. But, if all else fails, she argues that the US should adopt punitive measures when Chinese actions undermine Western interests.
“American policymakers have long acted under the assumption that if the United States remains true to its democratic values and models best behaviour - with an open and rules-based economy and political system - China will eventually follow suit. Xi Jinping’s third Revolution has largely upended this understanding.”
She concludes that the US and its allies must look for ways to cooperate with China “but at the same time be prepared when Xi’s Third Revolution spills over into the rest of the world undermining the principles underpinning global security and prosperity it purports to uphold.”
It is a challenge which in the months since the publication of this book, Trump seems to have accepted with the opening of his tariff war. How it plays out against Xi’s Third Revolution will help define 2019.
