August 30, 2017    6 minute read

China’s Upcoming Communist Party Congress Will Formalise ‘Xi’ism’

World Domination?    August 30, 2017    6 minute read

China’s Upcoming Communist Party Congress Will Formalise ‘Xi’ism’

The once in five years upcoming Congress of China’s ruling Communist Party, to be held this autumn, would in every circumstance be a major global political event. But this year’s Congress will be even more significant because it will formally consolidate Xi Jinping’s position as China’s most powerful leader since Deng Xiaoping and Mao Zedong. In official terms, Xi is already designated as the ‘core’ of China’s leadership. But this position is likely to be extended formally into the ideological and policy fields in what may be termed ‘Xi’ism’. Given Xi Jinping’s position, it is therefore crucial for understanding China’s dynamics to accurately understand the basic features of Xi’ism and what distinguishes it from previous policies by China’s leaders.

 

The Development of Xi’ism

Adopting the strong terminology of an ‘ism’ to characterise China’s policies highlights the new situation existing within China and internationally to that which confronted previous Chinese leaders. Given there may be shock at the real content of global trends, and how these are reflected in China, a non-Chinese source will be used to establish them – IMF projections published accompanying its latest World Economic Outlook.

Two simultaneous realities, one domestic Chinese and one international, characterise ‘Xi’ism’. The conclusion which flows from their interrelation in turn clearly explains why Deng Xiaping’s dictum ‘hide brilliance, cherish obscurity’ has been modified to explaining China’s analysis to a global audience in events such as Xi Jinping’s widely reported speech to this year’s Davos World Economic Forum.

  • Domestically, China is in transition within five years to a self-defined criterion of ‘moderate prosperity’ and within a decade to the World Bank’s definition of a ‘high income economy’.
  • Internationally, China’s chairmanship of the G20 during 2016, and other initiatives, confirm that it hopes for, and plays a role in aiding, growth in advanced economies. But China cannot depend on this. The IMF data projects, although this is not yet widely recognised, that following the international financial crisis advanced economies face prolonged average growth slower than after the Great Depression started in 1929.

Given that slow global economic development makes it harder for China to achieve its target of a high-income economy China concludes therefore it must pro-actively take not only domestic initiatives but aid world growth – that is the logic behind China international policies such as One Belt One Road (OBOR) which aims to help provide the underpinnings of an ‘all Asia, growth centre.

International Situation Facing China

Analysing first the situation in the Western economies facing China, the term ‘Great Recession’ is generally used referring to events after 2007, but several analysts have gone further – notably former US Treasury Secretary Larry Summers reference to ‘secular stagnation’ and IMF Managing Director Christine Lagarde’s to a ‘new mediocre’. But nevertheless it may still come as a shock to many to realise that IMF economic projections imply that the common phrase that Western economies face the ‘deepest economic problems since the Great Depression’ in one crucial aspect understates the situation.

IMF projections show that by the end of 2017 the total 12% growth in advanced economies after 2007 will be slower than the 15% in the decade after 1929. Strikingly, by 2021, fourteen years after 2007, the IMF projects total growth in the advanced economies will be less than half that in the 14 years after 1929 –  21% compared to 50% after 1929. As relative stagnation in the Western economies will not be accompanied by a corresponding slowdown in Asia a striking transformation of the world economy is projected in the next half decade. Taking a ‘core’ definition of China’s OBOR region (developing Asia, East Asia excluding Japan, the former USSR, Iran, Iraq, Turkey):

  • At current exchange rates projections from IMF data show in 2016-2021 the OBOR region will account for 45% of global growth – compared to North America’s 24% and the EU’s 10%.
  • In purchasing power parities (PPPs) the OBOR region would account for 57% of world growth – compared to North America’s 14% and the EU’s 11%.

World economic growth consequently more depends on the OBOR region’s success than on North America or the EU and China’s ability to use global development is chiefly dependent on the OBOR region’s success. Internationally, therefore, Xi Jinping faces a fundamentally different situation to previous Chinese leaders.

China’s Domestic Situation

But simultaneously China’s domestic situation has been transformed by cumulative growth since its 1978 economic reforms. In 1949 only approximately 10 countries had a lower per capita GDP than the China Mao Zedong took leadership of. China had considerable social achievements prior to 1978, China’s life expectancy rose from 73% of the world average in 1949/50 to 105% in 1976, but China’s 4.9% annual average GDP growth in 1950-78 was roughly comparable to the world average 4.6%.

In contrast China’s leaders from Deng Xiaoping until the international financial crisis produced rapid growth. In 1978-2007 China’s annual average GDP growth rate was 9.9%, achieving the transition from a ‘low income’ to an ‘upper middle income’ economy by international classification. The result is that on current growth rates China will achieve the World Bank’s definition of a ‘high income’ economy early in the next decade. To understand the global impact of this it should be noted that high-income economies by World Bank classification in 2016 were only 15.6% of the world’s population whereas China alone is 18.5%. Therefore, China achieving high income status will more than double the number of people living in such countries – a transformation of the world economy.

Conclusion

Xi Jinping is therefore the first Chinese leader facing a simultaneous combination of China’s transition to a high-income economy with low Western growth. This combination, therefore, produces China’s new policy configuration – ‘Xi’ism’.

Xi Jinping’s organisational position was already consolidated by his official designation as the ‘core’ of China’s leadership. But the previous most powerful leaders of China, Mao Zedong and Deng Xiaoping, are also officially designated in terms of their analysis of the periods of their leadership in terms of ‘Mao Zedong thought’ and ‘Deng Xiaoping theory’. It is therefore likely that China’s Communist Party Congress will also ideologically and in policy terms formalize Xi Jinping’s position in terms of what amounts to Xi’ism.

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