Party All The Time: Xi Jinping’s Governance Reform Agenda After the Fourth Plenum

In the lead-up to major Chinese Communist Party (CCP) events, China watchers tend to look for signs of economic liberalization or factional conflicts. So rumors swirled recently that CCP General Secretary Xi Jinping would use the Fourth Plenum of the 19th Central Committee, when its 370-odd full and alternate members met in Beijing in late October, to anoint an heir apparent or to take decisive action on the US-China trade war and China’s slowing economy.

Yet rumors often turn out to be unfounded, and the lack of dramatic developments was treated as something of an anticlimax. In fact, the Plenum’s “Decision” (jueding) on “several major issues related to upholding and improving the system of socialism with Chinese characteristics and advancing the modernization of China’s system and capacity for governance” received scant attention outside the country, save for its pledge to tighten security in Hong Kong.

But this low-key approach does not mean the Plenum was unimportant. The Decision showed that Xi remains firmly in control of the Party-state leadership by providing greater coherence for his ultimate priority—to improve the effectiveness of CCP governance. This program has permeated Chinese politics since the Third Plenum of the 18th Central Committee in 2013, a shift that was overshadowed at the time by a fixation on the CCP’s pledge to give markets a “decisive role” in resource allocation. That focus obscured the fact that, of the 60 points in that plenum’s decision, about half were related to governance.

Institutional reforms may not be as appealing as “liberalizing” economic reforms but, from Beijing’s perspective, it is the key to China’s future. While the Fourth Plenum’s Decision did not offer many concrete policies—not unusual for such high-level statements—it consolidated many developing strands of Xi’s agenda into one authoritative document. In that vein, the Decision offers a revealing overview of the CCP’s overarching policy priorities. The following analysis provides context for and analyzes major pillars of this governance reform program.

Context of Governance Reforms

Xi’s emphasis on governance reform reflects a judgment that the CCP must urgently develop a more sophisticated administrative apparatus to exert control over its 90 million members and manage a country of 1.4 billion people with an increasingly complex economy, society, and international profile. Xi’s predecessor, Hu Jintao, led the Party-state during a decade of relatively decentralized governance that fueled economic growth but could not keep a lid on corruption, indiscipline, local protectionism, and bureaucratic turf wars.

A sense of systemic crisis prompted Xi, in the years after he came to power in November 2012, to comment candidly that such issues had become “major factors restricting our development and stability” and that deficiencies in governance were to blame for numerous policy problems that “urgently await resolution.” These included inefficient economic development, insufficient capacity for innovation, poor environmental protection, and inadequate social services. He also underlined that citizens and cadres alike were losing faith in the system.

Therefore, governance reform was necessary to “break down the barriers of entrenched interests, resolutely remove institutional and systemic obstacles that hinder social progress and the development of productive forces.” And Xi concluded that the best way to overcome these obstacles was asserting central control and reducing local policy flexibility.

Xi clearly announced his focus on governance reforms at the Third Plenum of November 2013, which issued a decision that was as political as it was economic. The decision declared that “improving and developing the system of socialism with Chinese characteristics and advancing the modernization of China’s governance system and capacity”—a phrase almost identical to the title of the Fourth Plenum’s Decision—was the “overall goal” (zong mubiao) of the CCP’s new signature drive to “comprehensively deepen reforms.”

For Xi, the Third Plenum’s agenda should be interpreted as the CCP’s much-delayed response to former paramount leader Deng Xiaoping’s call in 1992 to “develop a more mature and well-defined system” within thirty years. Xi even compared “the modernization of China’s governance system and capacity” to the “four modernizations” in agriculture, industry, science and technology, and national defense that Deng championed in the post-Mao era.

The importance of the 2013 Third Plenum, and its stress on governance, in CCP policymaking has risen in line with Xi’s own consolidation of power. In his “Explanation” (shuoming) of this October’s Fourth Plenum Decision, Xi put the 2013 Third Plenum on equal footing with the legendary 1978 Third Plenum of the 11th Central Committee, which the CCP identifies as the beginning of China’s “reform and opening.” Xi first made this comparison only in January of this year, when he described both plenums as “epoch-making” (hua shidai de), crediting the latter for launching a “new era” of “comprehensively deepening reforms.”

Xi’s Explanation elaborated that “reform and opening in the new era” has “new connotations and characteristics,” because “deep-seated systemic and institutional problems” have raised the importance of “system construction.” Xi believes that the CCP must use governance reform to strengthen Beijing’s “top-level design” (dingceng sheji) of policymaking and shift the system from a blunt and narrow focus on growth to a more nimble but holistic “five-in-one” (wu wei yi ti) perspective that balances economics, politics, culture, society, and the environment.

Reclassifying Xi’s reform program as a historical milestone on par with the national renewal of 1978 shows how critical he believes these policies are for China’s continued development and for his own legacy. While the CCP’s domestic goals have not changed enormously—they still center on raising living standards, reinforcing political legitimacy, and perpetuating the Party-state—Xi’s reforms represent a new interpretation of how Beijing can best achieve them.

Content of Governance Reforms

The upshot of Xi’s attention to the Chinese “system” is that he believes, if the CCP is to reinforce its rule and achieve its policy aims—summarized in the Decision as “political stability, economic development, cultural flourishing, ethnic unity, the people’s wellbeing, social tranquility, and national reunification”—then it needs to ensure the CCP’s brand of authoritarian capitalism will be “mature and finalized” enough to manage the challenges ahead.

References to “top-level design” and “coordinated reforms” reflects the well-known trend in Xi’s leadership to recentralize control away from the provinces and bureaucracy and back towards the CCP leadership, with Xi himself at its “core.” Prominent examples of this approach include the creation of powerful central CCP commissions to oversee government policy, the CCP’s absorption of countless state functions in the extraordinary institutional reforms of March 2018, and increasing the reporting requirements of lower-level officials.

The unusually wide range of policy domains included in the Decision reflects the comprehensiveness of this vision. Not only did the Decision address governance of the economy, environment, society and culture, but also foreign policy, the military, Hong Kong, Macau, and Taiwan. Such breadth of coverage is more commonly found in leaders’ quinquennial Party Congress reports.

But the most fundamental sections of the Decision were devoted to improving the mechanisms by which policies are formulated, implemented, and supervised. In short, systemic reforms. Four notable themes of Xi’s agenda in the Decision were: institutionalization, ideological education, government for the people, and law-based governance.

First, the Decision outlined various objectives to further institutionalize the operations of the CCP and the state, designed to “ensure that the Party plays a leading role in all organizations.” Xi has already executed the largest overhaul of intra-Party regulations in decades, and he is set to further “standardize political life” and “enforce political discipline” to make the CCP a more efficient engine of governance. For the administrative state, the Decision promised to deliver more streamlined economic management, eliminate clashing policy mandates, clarify central-local responsibilities, and fortify Beijing’s control over priority issues such as intellectual property protection, social security, and environmental protection.

While better institutions should theoretically improve governance, the Decision was clear that “the vitality of the system lies in its implementation.” Xi said in July that “our main problem right now is that rules are not followed and implementation is ineffective,” demonstrating that even a strong leader still faces corruption, resistance, and incompetence down the chain-of-command from Zhongnanhai to the grassroots.

The two main levers that Beijing will use to target these issues are a stronger role for “governance capability” in personnel decisions and tighter disciplinary supervision of cadre decision-making in “key areas.” These areas include administrative approvals, construction projects, resource development, and public finance. For the bureaucracy, this reform means more accountability but also a shorter leash.

Second, the first item in the Decision’s section on strengthening Party leadership was about building a system around the CCP’s ideological education campaign to “remain true to our original aspiration and keep our mission firmly in mind,” which already has a dedicated leading small group headed by propaganda czar Wang Huning. In Xi’s mind, the Soviet Union collapsed because the CPSU was weakened by “intense struggles in the ideological sphere,” and so he has elevated the study of CCP theory, policy, and regulations to a level unseen since Mao.

The aim is to create a disciplined organization with loyal members who self-regulate their political behavior to better follow Beijing’s policies. At a deeper level, all this learning is meant to instill in Party cadres and members an unshakeable sense of “self-confidence in the system” (zhidu zixin). But it’s uncertain whether more study will actually make cadres more enthusiastic about Xi’s policies, let alone more able to overcome practical difficulties to policy implementation.

Third, the Decision reiterated the CCP’s call for a system in which “the people run the country” (renmin dangjia zuozhu). This does not mean electoral democracy but rather consultative mechanisms that improve Beijing’s governance by collecting information from its people.

The call for “public opinion” and “popular wisdom” to “permeate all work in the CCP’s governance” is already manifest in different ways, from more public consultation on policies and transparency on environmental disclosures to new channels for citizens to report grievances and communicate with government representatives. Immediately after the Fourth Plenum, Xi attended the China International Import Expo in Shanghai and used the visit to spotlight a “consultation meeting” on draft legislation at a community center.

Fourth, the Decision reiterated “law-based governance” (fazhi) as an “intrinsic requirement” of upholding and developing the Chinese system. Law-based governance refers not only to improving the quality of CCP regulations and state legislation but also to the “institutionalization, standardization, and routinization of party, state, and social affairs.” The formalization of Xi’s anti-corruption campaign in the new National Supervisory Commission, and its expanding role in governance, is another major effort along this line.

While the Party leadership will retain ultimate authority, the CCP wants to use legal structures to deliver consistent administration and predictable recourse to the majority of Chinese people whom it does not regard as a threat, including by trying to discover and discipline Party members who step out of line.

Taken as a whole, Xi’s governance reforms are an attempt to centralize political control in order to improve the Party’s responsiveness to the rising complexities of ruling China. More institutional clarity, public consultations, and reliable legislation could improve government performance, and more details in these areas should emerge in coming months and years.

But the intensification of ideological study—which seems a less plausible tool to improve policy outcomes—suggests Beijing may be struggling to find effective ways to improve accountability within the Party-state system. Moreover, the continued concentration of power places greater decision-making burdens on Xi and his inner circle.

These policymakers have assumed greater responsibilities but confront the age-old problem of information asymmetry or stove-piped communication channels. They cannot possibly know more than all local officials or state functionaries about what works best within their specific jurisdictions and policy domains. And, with tighter regulation of lower-level cadres, people throughout the system seem less likely to want or even have an opportunity to provide their input, increasing the potential for ineffective and even detrimental policies to accumulate.

Thus, the current governance agenda, while probably producing greater effectiveness and efficiency within China’s vast government apparatus, may simultaneously cause the CCP to have less control over China’s future. How this paradox gets resolved remains to be seen.

Conclusion

It is clear that Xi sees the governance reforms cemented at the Fourth Plenum as critical to the resilience of CCP rule. His Explanation said that “today’s world is experiencing a great turn of events unseen in a century,” and stressed the urgency of preparing China’s polity to withstand the threats and seize the opportunities of this moment.

The CCP’s tasks of governance are now of “unprecedented difficulty” and it faces “risks and challenges” of “unprecedented severity” from both home and abroad, from both the economy and society, and from environmental threats like climate change. Governance reforms to the socialist system are needed to “win the battle to prevent and resolve major risks.”

Adding to the sense of historical gravity, Xi also quoted from a 1980 speech by Deng that “summarized the lessons of the Cultural Revolution,” highlighting Deng’s warning that fault lay not just with Mao but also with “problems in the leadership and organizational systems that are more fundamental, widespread, and long-lasting.”

While Xi is often called the most powerful Chinese leader since Mao, his style is actually closer to Deng’s in this regard. Xi’s removal of presidential term limits confirms that he does not share Deng’s belief in the need to constrain the power of the paramount leader (although Deng’s own power was often informal). Unlike Mao, however, he shares Deng’s abhorrence for the destabilizing potential of erratic governance and weak institutions.

The Fourth Plenum was just one step in what the CCP sees as an “extremely ambitious” project of political reform. Its Decision echoed Xi’s authoritative report to the 19th Party Congress in October 2017 by reiterating a timetable by which the modernization of China’s governance system would be “basically achieved” by 2035 and “fully achieved” by 2050. At that point, China is expected to have become a wealthy and powerful country with a leading global influence.

The Decision asserted the “superiority” of the Party’s governance for China’s domestic situation based on its achievement of “the two miracles of rapid economic development and long-term social stability.” Yet, while it’s too early to say for sure, the re-concentration of political power in Zhongnanhai could ironically weaken the features of Chinese governance—experimentation, flexibility, innovation—that contributed to past successes.

The CCP is obsessed with avoiding the fate of the Soviet Union, and has made a habit of muddling through periods of significant political disruption. But only time will tell if the CCP’s current approach proves adequate to the task of governing a more demanding China. As Xi has stressed, “the task is weighty and the road is long.”

Neil Thomas is a Research Associate at MacroPolo. Read more of his work on politics, political economy, and US-China relations here.