When China leads

For the last 40 years, China has implemented a national strategy that, despite its many twists and turns, has produced the economic and political juggernaut we see today. It would be reckless to assume, as many still do in the US, Europe, and elsewhere, that China’s transition to global preeminence will somehow simply implode, under the weight of the political and economic contradictions they believe to be inherent to the Chinese model.

By Kevin Rudd

NEW YORK – The West, by and large, has no idea what awaits it as China continues its rise. The United States, under President Donald Trump, has become a global laughingstock in less than a year. Europe, with the notable exception of French President Emmanuel Macron, remains a rolling seminar on itself, oblivious to its declining relevance to the rest of the world. And the less said about Britain’s collective act of national political and economic suicide in last year’s Brexit referendum, the better.

In short, the West has turned decisively inward, while China, breaking with its 3,000 years of dynastic history, has turned decisively outward, so that today few corners of the world are untouched by its influence. Deng Xiaoping’s maxim, “hide your strength, bide your time, and never take a lead” has already been dead for some years. The just-completed 19th National Congress of the Communist Party of China (CPC) was its state funeral. Xi is now proclaiming explicitly to his own people and the world that it is time for China to take center stage within the global order, and to create a new type of international relations.

So, beyond the pomp and ceremony of the 19th National Congress, it is crucial to understand what its outcomes will mean for China and the world.

Xi the thought leader

CPC congresses are about three things: leadership and personnel, ideology, and political vision. Even before this Congress, Xi had strengthened his position to the point that he is now China’s paramount leader. Five years ago, I said he would be China’s most powerful leader since Deng. I was wrong. He is now China’s most powerful leader since Mao Zedong. His absolute control over the CPC is reflected in its deepest structures, from which, in an arcane process resembling the workings of the Roman Curia, an entirely new body of “Xi Jinping thought” has been elaborated – and has now been incorporated into the Party’s constitution.

Xi’s achievement is no small matter. In one fell swoop, he has transcended his immediate predecessors and joined the ranks of Mao and Deng, who have until now been the only leaders to hold this political status.

Clearly, Xi’s anti-corruption campaign over the last five years helped him consolidate his position. Since the campaign began, some 278,000 officials have been punished, including 440 at ministerial rank and above – several of which were Xi’s politburo rivals. And, rather than loosening the screws, Xi’s report to the 19th National Congress suggested just the opposite: the Party should prepare for further tightening.

The new Politburo Standing Committee also reflects Xi’s personal preferences; indeed, its members will be loyal ultimately to Xi himself. Li Zhanshu, who will chair the National People’s Congress, and Zhao Leji, who will chair the Party’s disciplinary authority, are both members of Xi’s inner circle. Han Zheng, the executive vice premier, and Wang Huning, who is in charge of all CPC affairs, are both protégés of former president Jiang Zemin. And Premier Li Keqiang and Wang Yang (likely to be Chair of the Chinese People’s Political Consultative Committee) are from the Tuanpai, the Communist Youth League faction. This political balance will likely favor Xi enough to allow him to secure a third term as president.

Xi’s priorities are reflected in other key appointments. Liu He – a Harvard-educated economist and Xi confidant, who is the current vice-chair of the National Development and Reform Commission – has been appointed to the Politburo, the top ruling body after the Standing Committee. Already one of Xi’s closest financial and economic advisers, Liu is now likely to become Vice Premier, gaining even more influence over China’s economic-reform agenda. This, together with the elevation of Han – who has brought with him from Shanghai a reputation for strong economic governance – to the Politburo Standing Committee, suggests that economic reform will be a top priority for Xi in the next five years.

On the foreign-policy front, Yang Jiechi’s appointment to the Politburo is a sign that Xi intends to lift the status of the Chinese foreign-policy establishment within the system. This will put him in a stronger position to realize his ambition of a more globally assertive China.

Then there is the question of Xi’s own future. Everything about the 19th National Congress points to Xi continuing as China’s paramount leader beyond the next five years, and possibly for the next 15. His report didn’t point to the conclusion of his mandate by 2021, the centenary of the CPC’s birth and the date (announced in 2013) by which China would become “a moderately prosperous society” against global benchmarks. Rather, the speech points to 2035, when the next national milestone is to be reached on China’s path to becoming a global power by 2049, the centenary of the People’s Republic. The strong inference is that Xi is likely to remain in office through the 2030s.

What all of this reflects is that Xi is likely to be in power for longer than any other major national leader serving today, including Vladimir Putin. What he thinks and says to the Party, the country, and the world, therefore, must be taken with the utmost seriousness. Xi is driving China in a new direction, and whether we like it or not, the rest of us had better understand his agenda sooner rather than later.

Grand ambitions

This brings us to the actual content of Xi’s ideology, which can be found behind the CPC’s almost impenetrable dialect. First, Xi’s China will remain permanently governed by a Leninist party that monopolizes state power. The decades-long hope of many in the West that China will gradually transform itself into something approaching a Singaporean-style or Western-style democracy is the stuff of dreams.

Xi states that China will never import a political system from anywhere else in the world. “China’s socialist democracy,” he argues, “is the broadest, most genuine, and most effective democracy to safeguard the fundamental interests of the people,” and it now represents an alternative model for the rest of the developing world.

China’s official media have taken the cue. Government-controlled news outlets have flooded the country with story after story on why Western-style liberal democracy is now moribund. Moving beyond the conventional arguments that democratic decision-making has been ineffective in bringing about long-term economic development, a new set of arguments has been unveiled: Western democracy is corrupt, hypocritical, and fails to meet the needs of the poor. Under Xi, the CPC senses that the global spread of liberal democratic ideas has ground to a halt, leaving the West’s geopolitical power and prestige ripe for challenge.

Xi has outlined two grand objectives for the CPC and the Chinese people. During the 15 years from 2020 to 2035, China should become a “fully modern” economy and society. This is to be followed by another 15-year period until mid-century, when China’s quest for national wealth and power, first dreamed up in the 1890s, will finally come to fruition. By then, according to Xi, China will have become “a global leader of composite national strength and international influence.”

Global China

As for China’s role in the world, we have seen its outlines emerging since the CPC’s 18th National Congress in 2012, particularly in Xi’s speech to the Central Work Conference on Foreign Affairs in November 2014. The heavily edited published version of this speech provides an invaluable glimpse of the contours of Xi’s strategic vision.

It is a vision of a new type of great power relations, by which Xi means geopolitical parity between the US and China. Moreover, China is to shape the rules governing a new international system that includes not only the United Nations and the Bretton Woods institutions, but also China’s own institutional innovations in the form of the Belt and Road Initiative, the New Development Bank, and the Asian Infrastructure Investment Bank.

Where we will see even greater Chinese diplomatic innovation is in Xi’s concept of a ”global community of common destiny for all humankind.” Whereas strategic “realists” in the West simply roll their eyes when they hear this type of language, for the Chinese, Xi’s concept looms as large as the Atlantic Charter, the Bretton Woods conference, or even the UN Charter.

But the world should be prepared, because Xi’s “global community” remains very much an experimental concept – and for good reason. The truth is that Chinese history provides little guidance on how China should act on the world stage. Throughout most of China’s history, its leaders have focused on domestic governance and how to keep foreigners from entering the country. Still, the message conveyed by Xi’s coded language is easy to decipher: the rest of us should get ready for a new wave of Chinese global policy activism.

It's still the economy

The third dimension of any CPC National Congress is, of course, policy. Foreign analysts will complain that Xi’s report to the 19th Congress is short on details. A careful read of the text suggests very little variation from China’s existing economic, foreign, and defense policy settings. But spelling out the details is not the traditional role of a National Congress. These will come in the subsequent annual plenums to be convened by the CPC’s newly elected central committee.

Nonetheless, the central policy question remains the economy. The challenge for Xi is to implement the Party’s 2013 blueprint for economic reform. That plan outlined a comprehensive market-based strategy to replace China’s current economic-growth model, based on low-wage, labor-intensive export manufacturing, with one based on technology-driven productivity gains, high wages, and a booming service sector driven by the rapid emergence of the domestic consumer market.

If Xi succeeds in implementing this economic-reform agenda, notwithstanding significant social – and some political – instability along the way, China will entrench its position as the world’s largest economy. If, on the other hand, Xi deems the transition too difficult, China’s economy may fall short of both domestic and international expectations. We should have our first reliable read on Xi’s intentions either at the next Central Economic Work Conference (likely to be held later this year or early next year), or at the Third Plenum of the 19th Central Committee of the CPC, in the autumn of 2019.

When China does become the world’s largest economy over the next decade, the global system will be led by a non-English-speaking, non-Western, non-democratic state for the first time since George I ruled Great Britain and Ireland. The current rule-based international order will not remain immune from this fundamental geo-economic and geopolitical change. Nor will the conceptual foundations of the West – Judeo-Christian values and the Enlightenment principles of science, liberty, and universal human rights – be immune from challenge. To believe otherwise is willfully to ignore the deep changes that are now afoot.

The list of what can go wrong for China’s unfolding economic and international project is formidable. Still, for the last 40 years, China has implemented a national strategy that, despite its many twists and turns, has produced the economic and political phenomenon that we see today. It would be reckless to assume, as many still do in the US, Europe, and elsewhere, that China’s transition to global preeminence will somehow simply implode under the weight of the political and economic contradictions they believe to be inherent to the Chinese model.

Since the fall of the Soviet Union, there has been little, if any, grand strategy to guide the future of the West. Instead, we find a West – particularly its twin pillars, the European Union and the US – that is increasingly self-absorbed, self-satisfied, and internationally complacent.

It is sobering to reflect on the fact that the CPC’s 19th National Congress occurs on the 200th anniversary of Napoleon’s famous reflection on China’s prospects and potential. “China is a sleeping giant,” he wrote in 1817 from the splendid isolation of his exile on Saint Helena. “Let her sleep, for when she wakes she will move the world.”

  A shorter version of this commentary originally appeared in the Financial Times.