Return of the Party: Shifting Power from the Mandarin Class To the Political Class

If “separation of church and state” has been a source of longstanding political tension in the West, then the “separation of Party and state” has been a defining tension in Chinese politics. Although the state was always subjugated to the Chinese Communist Party (CCP)—hence the moniker “Party-state”—previous CCP leaders gave the state more autonomy in policymaking and allowed it to serve as something of a check on the potential excessive or suboptimal decisions of the political class.

That model of state autonomy, exemplified by a powerful State Council, is being eroded under President Xi Jinping. Although Xi has been telegraphing this intent for the past decade, the apotheosis of returning power from the “mandarin class” (State Council) to the political class (Party) became apparent at the just-concluded 14th National People’s Congress (NPC). In fact, there’s arguably no better time for Xi to make that explicit than after managing a clean sweep in the Politburo Standing Committee (PBSC) and securing a historic third term.

Personnel appointments at the NPC and the elevation of trusted confidantes to run the economy at the Politburo level clearly illustrate the neutralization of the State Council.

Xi Contra Mandarins

There were few surprises on personnel appointments at the NPC, since all the key people decisions were made at the 20th Party Congress last October. The premier (Li Qiang) and four vice premiers (Ding Xuexiang, He Lifeng, Zhang Guoqing, and Liu Guozhong)—who together constitute the top-level economic team—were largely expected. But the difference now is that although the premier is the head of government, the premiership likely matters much less than being #2 on the PBSC. If anything, the premier and the vice premiers’ main role is likely to supervise and make sure the State Council marches to the same drum beat as the Politburo.

To add insurance to ensuring an obeisant State Council, 19 out of 27 (70%) new ministers appointed at the NPC have either a direct working relationship with Xi or a secondary relationship through a Xi ally. These secondary connections with Xi could well blossom into direct connections over the next five years as he needs to cultivate new loyalists when many in the current cohort will reach retirement age in 2027.

These personnel moves clearly suggest that Xi’s PBSC intends to keep the State Council on a short leash, while relying on Party mechanisms to make executive decisions. To be sure, Xi seems to have never fully trusted the “mandarin class” that populate the State Council—preferring to elevate the “political class” of Party operatives who worked in provinces to solve “real problems.” From Xi’s vantage point, the State Council looks like a bloated bureaucratic sore that hinders swift and effective execution of his vision.

Xi’s “anti-mandarinism” can also be seen in the State Council reform plan announced at the NPC that put more government functions under Party control. By moving the finance, technology, social work, and Hong Kong and Macao portfolios under Party committees—which reflect priorities that Xi believes have not gotten desired results—that effectively shrinks the State Council. That shrinking may continue in Xi’s third term, which could take the form of renewed anticorruption efforts within the State Council.

Xi’s Economic Influencers

If major economic decisions will be made almost exclusively at the Politburo-level small committees, who will have Xi’s ear? Going forward, Xi will likely rely on the “LDH trinity” of Li Qiang (Premier), Ding Xuexiang (Executive Vice Premier), and He Lifeng (Vice Premier). These appointments are on brand for Xi: all three came through the provinces (Zhejiang, Shanghai, and Fujian, respectively) and have little experience in state agencies.

But each of them also has a different relationship with Xi. Li stands out as perhaps Xi’s closest ally, having forged a special relationship that may have allowed Li to push a reluctant Xi toward abruptly ending Zero-Covid. Ding, on the other hand, has been Xi’s chief of staff for a decade, allowing him to build a close working relationship with his boss. And He appears to have earned Xi’s trust when he was an up-and-coming young politician in Fujian province. In an early indicator of Xi’s trust, He was able to pluck one of his close associates, Zheng Shanjie, to succeed him as head of the National Development and Reform Commission.

This economic team will likely oversee key portfolios, such as Ding on tech and Hong Kong and Macao affairs and He on finance and trade. It is here where the dynamics among the “LDH trinity” could get interesting as each vies for personnel appointments and getting their agendas on the table over others. For instance, if some of the trinity’s favored candidates replace the current Finance Minister Liu Kun and central bank governor Yi Gang, both slated to retire soon, that could be an indicator of who is gaining influence.

Future analysis will examine the new leadership in more depth as well as assess how well Xi’s new Party-state governance model is delivering on its intended outcomes.

Damien Ma is the Managing Director of MacroPolo. You can find his work on energy, politics, and other topics here.

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