Xi Jinping is consolidating power – but for a higher purpose

Keyu Jin says the Chinese leader’s anti-corruption drive is no political purge, as some fear, but an attempt to rein in out-of-control local officials in order to strength China’s government and economy

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An April 2016 issue of Time magazine that features portraits of Xi Jinping and Mao Zedong on its cover is displayed at the Hong Kong Book Fair last month. Photo: AP

Published: 1:05pm, 5 Aug 2016Updated: 6:31pm, 5 Aug 2016

Much of the world is watching President Xi Jinping (習近平) with concern. Not only has he been reconcentrating power in the hands of the central government, many believe that his radical anti-corruption campaign is a fig leaf for a political purge. They worry Xi is building a cult of personality, much like the one that surrounded Mao Zedong (毛澤東) and fuelled the Cultural Revolution. The truth is far less sinister. While it is true that Xi is, to some extent, amassing power, his motivation is the need to strengthen China – both its government and its economy. To succeed, he must bring a bureaucracy that has spun somewhat out of control back into line.

Xi Jinping’s ambitious power play

Over the past three decades, power in China has been decentralised considerably, with provincial and municipal governments receiving, in an incremental fashion, substantial autonomy to experiment and test reforms aimed at attracting foreign investment and spurring gross domestic product growth. Moreover, they have been granted direct control over resources and local infrastructure development. As a result, subnational governments accounted for an average of 71 per cent of total public expenditure in 2000-2014 – a far larger share than in the world’s largest federal countries.

The goal was to spur overall growth by encouraging competition among regions. Local party bosses knew their career paths depended on their municipalities’ economic performance. And by working hard to spur growth, they have fuelled China’s economic rise and secured the ruling Communist Party’s legitimacy in the post-Mao era.

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Chinese tourists walk through an upscale shopping area in Beijing. Those who fear Cultural Revolution 2.0 need to understand that China is not the country it was 50 years ago. Photo: AP

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But decentralisation has had its downsides. It has led to substantial waste, exemplified in local governments’ massive debts. And it has spurred large-scale corruption.

In a country with stringent regulations and underdeveloped financial markets, private entrepreneurs face high barriers to starting and operating businesses. If illicit deals are what it takes to gain access to the resources and markets they needed, private firms have been more than willing to strike them.

Unless it reined in the municipal satraps, the central government could essentially kiss its reform plans goodbye

Such arrangements facilitated the entry of hundreds of thousands of private firms into the market in the late 1990s. In an era when growth was the top priority, the corruption that fuelled it was tacitly accepted, and even blithely condoned.