Chinese Politics: Not an Oxymoron

I have a PhD in Chinese politics—which means I have an abiding faith in the idea that, yes, China actually does have politics. That’s always been true, even in the authoritarian depths of the Mao Zedong era. And it’s been true in nearly every aspect of Chinese life, including atop the commanding heights of the economy.

Nearly twenty years ago, I wrote a book about how contending networks of generals and technicians fought pitched battles in China’s defense industry at the height of the Mao era. They fought over everything from budgets to weapons designs to procurement priorities to whether China should invest in basic or applied research. And the outcomes of those debates, the book argued, determined quite a bit about China’s trajectory in strategic weapons and, for awhile, in other strategic technologies too.

To put this bluntly, even one-party states have politics. And those politics can get pretty intense.

I’ve been reflecting on that a lot lately for three reasons:

For one thing, China has announced an array of new and grandiose state-backed initiatives. These include the ambitious “Made in China 2025” industrial policy program, the gargantuan “Belt and Road” infrastructure effort, and the slightly mindboggling Jing-Jin-Ji (JJJ) regional economic development scheme, which is supposed to reorient economic development in three provinces affecting a combined population of some 120 million. In theory, at least, these kinds of grandiose schemes should reflect a political and policy consensus.

As such—and here’s the second point—these programs represent top strategic priorities for the Chinese state. They are lionized by the Communist Party and the state propaganda organs. And that, in turn, feeds the perception that they enjoy the support of “the system” in pretty much every way.

Third, it’s worth noting that some of these schemes enjoy the personal backing of China’s top leaders, not least President Xi Jinping. Xi is especially associated with the Belt and Road and JJJ initiatives.

But precisely because China has actual politics, none of these stories is quite so simple.

Much of the debate about China these days presumes that because Beijing has grand plans, it must also have coherent strategies, unity of purpose, and an ideologically coherent development model. And that is consistent with an analytical view that dates back decades. Just take, for instance, the arguments we used to hear about the existence of a “Beijing consensus.” Back then, I wondered if there really was such a consensus. Today, I wonder much the same thing, no matter how grand the schemes or how effusive the state propaganda.

Contending interests and views exist around nearly every economic and foreign policy debate in China today. And the fact is, interest groups can and do shape Chinese decisions in meaningful ways.

I was reminded of this the other day while reading Damien’s blogpost about the EV component of the Made in China 2025 plan. As Damien lays out there, private sector players in China have exploited industrial policies to their own advantage to get resources and subsidies. But this was not necessarily the original intention of the state. Nor is it what China’s state-owned sector, which those subsidy policies are primarily designed to support, may desire.

Damien describes a world not united by a single purpose but instead beset by competing players, policy contestation, asset bubbles, and local governments competing with one another to hew to broad yet vague policy mandates from Beijing.

China’s foreign policies aren’t always so coherent either. Take North Korea. Americans (including me) often vent their frustration with Beijing. Why, we ask rhetorically, doesn’t China ever seem to “get” it in the face of North Korea’s shocking intransigence? Why won’t China react more strongly to North Korea’s obvious and destabilizing provocations?

It turns out that China’s leaders are perfectly willing to wheel and deal, as the Bush, Obama, and Trump Administrations have all discovered when pressing China to do more to rein in Pyongyang. But the Chinese are cautious—incredibly cautious: first, because they flatly refuse to throw the North Korean state overboard; second, because there are interest groups in the Chinese system that still have a lot staked on North Korea; third, because Beijing has been able to string the issue along without paying a hefty price; and fourth, because there is simply no disincentive (or even incentive) at this point for Beijing to start trading off or trying to rationalize the interests of so many interest groups amid the growing complexity of Chinese politics.

Here are a few other examples, dating back a decade or more:

Back in 2010, China broke the dollar peg for the yuan, but it did so incrementally.

China cut a climate deal with the United States at Paris in 2016, but a very modest deal indeed—and one that, in fact, reflected priorities that Beijing had already set for itself in its national plans, programs, and targets.

China worked with the United States on Iran sanctions, but then contested the designation of Iranian entities and, ultimately, watered the sanctions down.

China has refused to mollycoddle both Kim Jong-un and his father, Kim Jong-il, in his final years, but, as noted above, it simply hasn’t proved willing to strongarm the family, the regime, the North Korean state, or the money flows that support all of them.

On these and other issues, Chinese leaders have proved themselves amenable to reforms and diplomatic deals—but on their own time, in their own way, and in a manner that reflects how they, not others, define Beijing’s self-interest. And what is more, they have proved that they like to split the difference among competing views, contending interests, and diverging perspectives. Break the yuan peg as reformers advocate? Okay, but do it incrementally in a way that conservative voices can live with. Enforce sanctions in UN Security Council resolutions? Maybe, but do so unevenly and in a way that doesn’t throw the baby out with the bathwater or compromise the interests of the skeptics and the reluctant.

And so as I’ve written a lot over the years, even when Chinese and American interests converge, turning common interests into complementary policies can be difficult because, among other things, China’s leaders have diverging assessments from America’s about the scope and urgency of threats. And yet it’s also clear that the growing complexity of the Chinese political scene has at least something to do with China’s reticence. The current crop of senior Chinese leaders—even the much bolder Xi Jinping—is still innately conservative on issues like giving North Korea the big push. And with the 19^th Communist Party Congress and questions of political succession looming, they are fostering balance among the interest groups that now contest economic issues, such as competition policy, in particular.

On many issues of importance to the United States, from North Korea to whether and how much to open protected sectors to greater foreign competition, the political winners in China, thus far, just haven’t seen the issues Washington’s way.

Here’s the point: politics among a wider array of views and interests matters more than ever in today’s China. But Chinese leaders have responded to this complexity with a heaping dose of caution. We’re seeing some least-common-denominator outcomes and less decisiveness than one might expect, especially on economic reforms. And we are certain to keep seeing this until at least this fall, when the Communist Party replaces all but two of the country’s top leaders on its top decision body.

Succession politics is, I’m afraid, going to make an innately fence-sitting group of bureaucrats and officials even more conservative about some important things.