The Foreign Policy Essay: The Fault Lines in China’s New Empire

This article was originally published by the Lawfare Blog on 9 November 2014.

Editor’s Note: Under President Xi Jinping, China appears more aggressive and dictatorial: a worrisome combination as China’s wealth makes it more influential and helps it build a stronger military. Drawing on her piece in the latest issue of Foreign Affairs, Elizabeth Economy of the Council on Foreign Relations argues that Xi’s “China Dream” is not coming to pass: his attempt to transform the country is encountering resistance, and the resulting divisions and weaknesses are likely to limit Beijing’s influence in the years to come.

Chinese president Xi Jinping is attempting to reform—even revolutionize—political and economic relations within China as well as between China and the rest of the world. He has articulated a vision for China that is well encapsulated in his “China Dream,” or the rejuvenation of the great Chinese nation. In practical terms, this means Xi Jinping himself is at the top of a strong Communist Party, at the forefront of the political system, in command of a robust and innovative Chinese economy, and fostering an expansive foreign policy in which all roads lead to Beijing. It is a Chinese empire with socialist characteristics.

Xi has moved quickly to consolidate his political power and that of the Communist Party. He has assumed control of all significant established leading groups and commissions and has established new ones to cement his power over issues such as cybersecurity and economic reform. His anticorruption campaign, the signature issue of his first two years in power, netted 182,000 officials from every sector of society in 2013, a significant increase from previous years. Transparency and public accountability in the campaign remain weak, however, and it really is a tool of political consolidation; according to University of Pennsylvania political scientist Wang Yuhua, roughly half of the 50 or so most senior officials caught in the anticorruption drive have ties to Xi Jinping’s most well-known political opponent, Zhou Yongkang, a former Politburo Standing Committee member and head of public security who himself has been detained for corruption.

Centralization of power also translates into a narrowing of political space for civil society. The Internet is no longer a virtual political space that provides an opportunity for political participation, transparency, and accountability—all the elements of good governance missing in the official Chinese political system. Instead, under Xi’s leadership, a raft of new Internet regulations have silenced alternative influential voices and dampened enthusiasm for sharing ideas and information. For example, a study of 1.6 million Weibo users commissioned by the Telegraph revealed that the onset of tighter content restrictions and censure by authorities led to a 70-percent drop in posts on Weibo between March 2012 and December 2013. Xi Jinping has also called upon artists and scholars to ensure that their work serves the needs of the Chinese people and the Communist Party. And at least one major city, Guangzhou, recently issued a new set of provisional guidelines that make it far easier for government officials to close down non-governmental organizations, sparking an outcry from civil society groups there.

On the economic front, Xi has laid out a long agenda of institutional and other reforms designed to rebalance the Chinese economy away from a dependence on investment and exports to one rooted in consumption-based growth, transform China from a manufacturing to an innovation nation, and provide a greater role for market forces and private enterprise. All the while, however, Xi is seeking to ensure that the state retains a high degree of control over core sectors.

Looking outward, Xi’s foreign policy envisions China at the center of a newly integrated Asia and beyond, connected through a vast infrastructure of Chinese-funded roads, railways, pipelines, and ports. New institutional arrangements proposed by Xi such as the Asian Investment Infrastructure Bank and a potential new Asian security arrangement will also help position China as the dominant player in the region. And Xi has already presided over a more forceful effort to assert Chinese control over long-disputed maritime and other territories in the region.

It is too early to determine whether Xi’s efforts to construct a new Chinese empire will be successful, but fault lines are already emerging. Pressures from inside and outside China are shaping China’s path forward in unexpected ways, and Xi’s policies are creating deep pockets of discontent domestically. He has announced, for example, that his anticorruption campaign is encountering serious resistance. Even former top leaders Jiang Zemin and Hu Jintao have warned Xi that if he continues to pursue his campaign so aggressively, he risks undermining the party itself. In addition, his political crackdown on the home front is alienating many of the best and brightest Chinese citizens necessary to effect that change. According to Hurun Report, almost two-thirds of Chinese with assets of $1.6 million or more have emigrated or seek to emigrate. And, of course, Beijing’s White Paper on the future of Hong Kong elections has precipitated widespread and ongoing protests in Hong Kong that neither the Hong Kong government nor Beijing has been able to tamp down.

Even Xi’s bold economic reform plan—announced to great fanfare just one year ago—appears to have run into difficulty. As one prominent Chinese businessperson commented to me privately: “The property tax is delayed, currency reform is delayed, the Hong Kong-Shanghai ‘through train’ [a cross-border stock connection] is delayed, and approvals for new business are being delayed. No one knows what is going on with the economic reforms.” Economic indicators are mostly pointing in the wrong direction, and several Western analysts now predict a long, tough slog forward with no guarantee of success.

Xi’s desire to promote the centrality of China—both through physical and institutional infrastructure as well as soft power—also has encountered serious obstacles. Beijing’s efforts to enforce various maritime and other territorial claims in the Asia Pacific have raised tensions dramatically in the region, and rather than contributing to a shared regional vision of Chinese leadership, they have led a number of countries, including Vietnam, India, Japan, and Australia, to enhance their security relationships with one another to hedge against China. Xi’s initiative to establish an Asian Infrastructure Investment Bank was hurt (at least initially) by the decision of most of the region’s prominent economies—including Japan, South Korea, Australia, and Indonesia—not to sign on. While the United States apparently used its political leverage to influence some of these countries to hold off on participation, there were also concerns within these countries over the proposed bank’s governance, environmental, and labor standards.

Even Xi’s strong desire to promote Chinese soft power is undermined by his very lack of understanding of what constitutes such international influence. He insists, for example, that artists foster “correct” viewpoints of history, nationality, and culture, as well as strengthen pride in being Chinese. And even as he bemoans the lack of think tanks in China with “great influence and international reputation,” he insists that they be “led by the Communist Party of China and adhere to correct direction.” Such directives—if enforced—virtually guarantee that Chinese soft power will never spread beyond the country’s boundaries.

Xi Jinping’s Chinese empire with socialist characteristics provides a useful context for understanding current Chinese intentions. However, as the United States and other countries seek to advance their own interests in the face of Xi’s reforms, they must pay close attention to what is actually happening on the ground, rather than to Xi’s stated intentions. As the emerging fault lines in Xi’s imperial construct suggest, the reality of Xi’s China is likely to be quite different from his “China Dream.”

Elizabeth C. Economy is the C.V. Starr senior fellow and director for Asia studies at the Council on Foreign Relations. She is the author, with Michael Levi, of By All Means Necessary: How China’s Resource Quest is Changing the World (Oxford University Press, 2014).

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