China's Changing of the Guard

Can incoming premier Li Keqing fill Wen Jiabao's shoes, or more importantly, those of Zhu Rongji?

In October, when the Communist Party Central Committee meets in Beidaihe to deliver generational change in its leadership, the spotlight will turn to Vice Premier Li Keqing, the heir apparent for the premiership and whether he can follow through on his predecessor Wen Jiabao’s financial, economic, and most important, political reform.

Wen and Zhu: Can Li live up to them?

Theoretically Wen leaves a mess behind him, including outrageous steel-making over capacity, excessive fiscal reliance on real estate development and the resulting housing problems, which may or may not be a bubble, depending on who is dong the telling.

Despite China’s 25 years of steadily growing prosperity, which has lifted hundreds of millions out of poverty, there are significant imbalances in the system that will take a herculean effort to correct.

China’s local governments went on a massive development binge starting in 2008 that has put them 10.78 trillion yuan (US$1.69 trillion) in debt, equivalent to 27 percent of the country’s entire GDP, according to a study of Chinese local government debt by the Seoul-based Samsung Economic Research Institute.

It faces an eventual  sea of demographic problems engendered by the one-child policy, which has led to hundreds of millions of increasingly elderly with only one child to support each family. State-owned enterprises, the behemoths that had to be bailed out in the 1990s, have been quietly reasserting their control over the economy. A long range of environmental disasters includes problems with the Three Gorges Dam and poisoned rivers from unregulated rare earths mining. Some -- nobody knows how much of the headlong construction resulting from the 2009 stimulus package is resulting in bridge and rail failures.

As with all party apparatchiks, Li Keqing has training for the job for most of his life, advancing steadily up through the hierarchy. Although he appears to have lost out to Xi Jinping to take over from Hu Jintao in an internal power struggle, he has taken on some of the government’s most important portfolios. An economist unlike many of China’s leadership, who have tended to be engineers or to come from other hands-on professions, he has been conspicuously visible in green development and green energy, cutting China’s growing income gap, modernizing key industries and focusing on raising domestic demand.

So how will history judge Wen Jiabao, and will Li follow in his footsteps? In terms of management style, Wen often suffers in comparison with his predecessor, Zhu Rongji, in governing China over the past two decades. Zhu, once called the iron prime minister, is usually considered to rank considerably ahead of Wen in terms of relative career achievements.

Indeed, Zhu is credited with successfully steering China out of the aftermath of the Asian Financial Crisis and clear of the bursting of the US tech bubble. Under Zhu’s stewardship, China soft-landed, with the economy maintaining 7-8 percent annual gross domestic product growth between 1998 and 2003. Zhu personally led a famous task force to Xiamen in 2000 to crack down on a vast smuggling ring and put it out of business. The ring’s leader, Lai Changxing, decamped to Canada to spend years fighting extradition before the Chinese authorities finally got him back.

Wen has never won those kinds of stripes. But that is not to forget that Zhu charged then-Vice Premier Wen with handling delicate financial and agriculture policymaking during those very difficult economic times. And Wen rose to the task. Having entered the premiership in 1998 after China had enjoyed years of extremely rapid double-digit growth but essentially also unrestrained double-digit domestic inflation, Zhu Rongji knew and had to make sure that China would have to take on serious economic reforms ahead of entering the World Trade Organization in 2001.

The influx of foreign capital, along with China’s promise to open previously safeguarded sectors for outsider competition, catapulted China to the next level. Zhu’s straight-talking and corruption-fighting management style was what China needed that to hit the WTO deadline. Unquestionably, Wen and his more toned-down consensus-seeking approach was a drastic departure from that of his predecessor, but Wen had the magic touch among people both inside and outside of China, winning him the title last only earned by PRC’s founding Premier, Zhou Enlai – the “People’s Premier.”

Almost certainly some of Wen’s populist policies can be expected to deliver imperial headaches for the incoming premier to deal with. Nevertheless, reflecting on Wen’s two terms, China under his economic leadership delivered enviable growth rates - six years of 10%-plus GDP, and relatively tamed inflation, with the annual consumer price index exceeding 5% for only two of 10 years. Some commentators have argued that China’s financial sector reforms have slowed, but surely there were few complaints when the Shanghai Stock Exchange Index was going from new high to new high during 2006 and 2007.

In addition, with the global financial markets crippled so dramatically by “financial innovations” from the “financial engineers” in 2008, the pragmatic and on-the-ground approach on financial sector reform taken by Wen, a trained geologist, was perhaps the better bet. While Wen and Zhu took on the premiership with widely differing styles, both appear to have been appropriate for their eras.

Now it is Li’s turn. Despite the criticisms of Wen, Li will have a tougher act to follow than most critics think.

Steve Wang

No Movement on Major Disputes as Clinton Meets With Chinese Leaders

BEIJING — The United States and China clashed openly on Wednesday over two of the most contentious issues riling their relationship, the violence in Syria and growing tensions over territorial disputes in the South China Sea.

After hours of meetings with other top leaders that began Tuesday night and continued Wednesday, Secretary of State Hillary Rodham Clinton failed to narrow the gaps over international crises involving Iran and North Korea and the competition for dominance in the Asia-Pacific region. China also rebuffed Mrs. Clinton’s appeals to soften its support for the government of President Bashar al-Assad of Syria. Adding to the bumps on what is likely to be Mrs. Clinton’s last visit to China as secretary of state, one of her most important appointments, a session with Vice President Xi Jinping, the likely next leader of China, was canceled.

Most important, the Chinese leadership showed no signs of buckling after months of efforts by Mrs. Clinton and her senior aides to persuade the country to be more flexible on maritime disputes in the South China Sea.

“China has sovereignty over the islands of the South China Sea and the adjacent waters,” the foreign minister, Yang Jiechi, declared flatly during a lengthy appearance with Mrs. Clinton in the Great Hall of the People on Tiananmen Square. “There is plentiful historical and jurisprudential evidence for that.”

When asked about the deepening of American military engagement in Australia and the Philippines, Mr. Yang pointedly added that the United States should reconsider its own strategy in Asia in light of “the trends of our current era and the general wish of countries in the region.”

Mrs. Clinton and her senior aides did not come to Beijing with high expectations of resolving major differences, given China’s once-in-a-decade leadership transition beginning this fall. The highly scripted transition has been jolted by a political scandal that led to the downfall of a major party official, Bo Xilai, that revealed some of the maneuvering among the political elite. As Mrs. Clinton was wrapping up her trip, a central figure in the scandal, Wang Lijun, wascharged with “bending the law for selfish ends, defection, abuse of power and bribetaking,” according to the official Xinhua news agency.

American officials said that Mrs. Clinton was not told of the looming charges against Mr. Wang during her talks on Tuesday and Wednesday, but, they said, the United States had expected that Mr. Wang would be charged at some point amid the churning internal maneuvering ahead of the transition.

At the news conference with Mr. Yang, there was little effort to paper over the two countries’ differences on Syria and the territorial disputes in the South China Sea. In July, China established a military garrison and a legislative assembly on the tiny Paracel Islands, which Vietnam also claims, exacerbating the tensions there.

Mrs. Clinton, who is in the middle of a 10-day trip through Asia, has repeatedly called on China to discuss with the Association of Southeast Asian Nations a code of conduct to address disputes in the region. The Chinese have firmly resisted that idea, with Mr. Yang insisting on direct negotiations with individual countries.

The State Department has said that China would be more likely to get its way by bargaining with individual nations than with the entire regional bloc.

In the last few months, for example, China has effectively blocked the Philippines, an ally of the United States, from gaining access to the Scarborough Shoal, known as Huangyan Island by China. The Chinese placed a rope across the entrance to the island lagoon and have kept patrol boats in the adjacent waters.

After days of hostile articles in the official Chinese news media about American interference in the region, Mr. Yang said any settlement over the South China Sea disputes should only involve those “directly concerned,” in other words, not the United States.

The foreign minister repeated China’s oft-stated policy that China would assure “the freedom and safety of navigation in the South China Sea.”

On the conflict in Syria, Mrs. Clinton reiterated American criticism of China’s veto, with Russia, of three United Nations Security Council resolutions intended to press Mr. Assad to end the violent crackdown in his country, which has claimed an estimated 20,000 lives and created a rising flood of more than 240,000 refugees, 100,000 in the last month.

“We believe that the situation in Syria is a threat to peace and stability in the entire region,” Mrs. Clinton said. “And the longer the conflict goes on, the greater the risk that it spills over borders and destabilizes neighboring countries.”

The foreign minister, Mr. Yang, countered that China opposed international interference in any other country’s internal affairs, though he expressed support for the peace proposal of the former United Nations envoy, Kofi Annan, which American and most other diplomats consider to be moot at this point. He suggested that China’s policy, not the United States’, would ultimately prove successful. “I think history will judge that China’s position on the Syrian question is a promotion of the appropriate handling and resolution” of the violence there, he said.

The Foreign Ministry said at its regular briefing that the cancellation of Mrs. Clinton’s meeting with Mr. Xi was a “normal adjustment of the itinerary.” Mr. Xi also canceled his scheduled meeting Wednesday with Singapore’s prime minister, Lee Hsien Loong. “We have reached consensus with the United States and Singapore” on the cancellations, the Foreign Ministry spokesman, Hong Lei, said.

Diplomats in Beijing said they were told that Mr. Xi had hurt his back and said there was no reason not to believe that explanation, even though there was speculation about whether the cancellation of the meeting with Mrs. Clinton was connected to the once-in-a-decade transition, or whether it was intended as a snub.

Instead of Mr. Xi, Mrs. Clinton met with the vice premier, Li Keqiang, who is expected to become the premier early next year. Earlier Wednesday, she met with President Hu Jintao, whose term ends next year, at the Great Hall of the People. Despite the differences, Mrs. Clinton and her aides appeared satisfied with the Obama administration’s efforts to build greater openness between the two countries by creating regular consultations that allow them to endure disagreements like those on display here. She noted that President Obama and Mr. Hu have met 12 times, while she has visited Beijing five times, joking at one point that she had lost count.

N.Y. Times

Party Hit by New Scandal

The ruling Chinese Communist Party is rocked by another scandal following a fatal but mysterious Ferrari car crash.

Li Zhanshu (R) during a visit to a state-run factory in Guizhou province, April 11, 2010

A powerful official of the ruling Chinese Communist Party, who is an ally of outgoing president Hu Jintao, has been sidelined after his son was identified as the driver in a fatal, but mysterious, crash of a Ferrari sports car, fueling speculation of a power struggle ahead of the Party transition later this year.

The Beijing crash in March appears to be a fresh embarrassment for the Party, which has replaced Ling Jihua, the head of the general office that oversees security for the country’s top leaders, with Li Zhanshu, a close ally of Vice-President Xi Jinping who is forecast to take over from Hu and as party head.

The Party's Central Committee appointed Li, 62,  as director of its general office, replacing Ling Jihua, 56, who was given a far less powerful role as head of the Stalinist-era ideological body, the United Front Work Department, which handles relations with organizations and individuals outside the Party.

Beijing watchers expressed surprise over the swift changes announced on Saturday, saying they raise various questions and point to a power scramble in the Party.

“Within one day, Li Zhanshu has been promoted from deputy director to director of the general office. What's hidden behind this mysterious personnel change leaves vast space for speculations,” He Liangliang, a commentator with the Hong Kong-based Phoenix TV, told Radio Free Asia's Mandarin news service.

“There are some strange things that have happened to Ling Jihua. His son suddenly died in a car accident. We don’t know exactly what kind of role he had played in the Bo Xilai case,” he said.

Embarrassing
Ling's demotion comes amid reports of his son's death in a car crash under circumstances that could prove highly embarrassing to a Party already rocked by the fall of former Chongqing Party chief Bo Xilai.

The powerful Bo was sacked in March and is currently under investigation for unspecified "disciplinary violations" while his wife Gu Kailai last month received a suspended death sentence for the murder of a British businessman in the biggest political scandal to rock the Party in two decades.

As director of the general work office, whose past directors include Premier Wen Jiabao and former Vice-President Zeng Qinghong, Ling had been tipped as a possible candidate for the all-powerful standing committee of the Party's Politburo.

In a report on Monday, Hong Kong's English-language South China Morning Post (SCMP) identified Ling’s son Ling Gu as the driver who was killed in a mysterious crash of a Ferrari in the middle of the night in Beijing in March.

All online information or comment about the crash, which prompted widespread speculation among Chinese netizens, was blocked on China's tightly controlled Internet.

Ling Gu was killed, while his two female companions, one Uyghur and one Tibetan, were injured, the SCMP reported.

One of the women was naked, while the other was "semi-naked," it said.

The paper cited an unnamed source as saying that officials implemented an elaborate cover-up to shield Ling Gu's identity, even faking the name on the driver's death certificate.

“People will ask how Ling Gu could have afforded a 5 million yuan (U.S. $788,000) luxury sports car in the first place,” the paper said in an editorial. "It will only confirm the public belief that the children of senior officials have rich and decadent lifestyles beyond the wildest dreams of the people."

Searches blocked
Keyword searches for "Prince Ling," "Little Ling," and "car crash, car sex," were blocked on the popular microblogging service Sina Weibo on Monday, according to the China Digital Times, which monitors banned keywords.

A retired Party official told Reuters that the cover-up had been decided upon at the highest level.

"The central leadership decided that the scandal over the incident was too serious to allow Ling Jihua to be promoted, and Hu Jintao really couldn't resist," the agency quoted the official as saying.

One source and a journalist who once worked for a Party publication—both speaking on condition of anonymity —also confirmed to Reuters that Ling Gu had died in the crash. The source also confirmed that the driver's death certificate had been changed to disguise Ling Gu's identity.

Three young people were in the car at the time of the crash, the agency quoted further unnamed sources as saying.

RFA

China’s Greatest Challenge: Not America, But Itself

China faces tough economic, demographic and social issues it must deal with. Foreign affairs may take a back seat.

Back in February, at an Iowa state dinner held in his honor, Chinese Vice President Xi Jinping offered what the Des Moines Registerdescribed as a heartfelt toast to the Hawkeye state. Xi, who a quarter century before had visited Iowa as a local official, returned in 2012 as a national leader aiming for greater global exposure. In the presence of Iowa’s leading citizens, Xi shared his childhood memories reading Mark Twain and his long-held fascination with the Mississippi. And so he was glad that, on this most recent trip, “the unequaled beauty of Muscatine at sunset” had greeted him once again. The man who charmed the heartland of America will, at the 18th Party Congress in Beijing this coming October, officially become the President of China.

As China’s international profile continues to rise in tandem with its economic and political significance, one might conclude that the Chinese public is likely to expect Xi to carry a higher profile on the international stage. As the leader of a world power, Xi will have to devote more time to international affairs, take the lead in debates on global issues, interact more frequently with foreign audiences like the citizens of Iowa, and articulate China’s role as a shaper of world affairs. In reality, however, Xi may be preoccupied with addressing a host of economic and social challenges that China is likely to encounter in the decade ahead. 

As China's next leader, one of Xi's main concerns will be managing the significant economic challenges that are beginning to surface.  In particular, Xi will have to shepherd his country through the most turbulent part of its gradual transition from an export-oriented economy to one that is based more on domestic consumption. 

For the past 30 years, low-wages and an abundance of able-bodied young workers has given Chinese manufacturing a huge comparative advantage and enabled its expansion.

In recent years, however, China's economic model had become increasingly problematic. As consumers in Europe, Japan, and the United States, saddled with economic challenges at home, reduced their consumption, an export-centered economy has proven to be unsustainable, with unsold goods—everything from toys to automobiles—reportedly piling up on factory floors and showrooms across the country. 

Chinese wages, once the country's greatest assets in attracting manufacturing, have been rising for years, leading some, like Boston Consulting Group, to predict that there will be a “manufacturing renaissance” in the United States. Meanwhile, should conditions continue to deteriorate and unemployment rise throughout China, the government will be particularly worried about social unrest, as was the case during the early stages of the global financial crisis that began in 2008.

Over the medium-term, China's economic challenges will be driven more by its bleak demographic trends. As the Economist reported, the Chinese government's most recent data revealed that population growth averaged 0.57 percent annually during the first decade of the 21st century, down from the 1.07 percent annual growth rate China maintained during the 1990's. 

Consequently, China’s population is aging. One could attribute China’s demographic challenges to Beijing’s one-child policy, or the fact that as a country modernizes and becomes wealthier its people tend to live longer and have less children. Whatever the cause, as China grows old before it gets rich the government will need to find a way to pay for a better social safety net and the other increased needs a graying population creates for a government.

As Xi, along with China’s new group of leaders, work through these challenges and gradually reform the country’s economic system to better accommodate the social, economic, political, and demographic developments at home and abroad, they'll also have to contend with a citizenry that is becoming more assertive in demanding and protecting their rights and interests after 30 years of rapid, harsh, and often unequal processes of growth. They may not be calling for regime change, but they are certainly demanding that their current government be more responsive to their needs.

In short, the China that Xi and the incoming leadership inherit is one in the midst of a delicate transition. The export-led system that China’s leaders had relied on for the past several decades benefited their country tremendously. 

In the process, however, the model also strained Chinese society in significant ways, for which the consequences are now only beginning to emerge. The build-up of internal pressure, coupled with the inability of developed economies to sustain China’s export-oriented economy, means that efforts to rebalance—internally and, in the process, externally—must take place.

The conversation on the significance of tackling these internal challenges is already taking place publicly in China. Professor Cui Liru, who directs the government-affiliated China Institutes for Contemporary International Relations, admitted in a recent essay that the coming task for Beijing is substantial, and will require the “strenuous efforts” (jianku nuli) of both the government and the people. 

The Chinese government’s shift to establish a social safety net and improve the people’s well-being, Cui argues, will be the concrete examples demonstrating that the promises of “social fairness, justice, prosperity, and harmony” are being kept. They also form, Cui goes on to say, the legal foundation for which the Chinese Communist Party’s long-term rule is based.

As I have argued in the past, it is imperative that U.S. policymakers realistically assess China’s internal challenges if they hope to understand Beijing’s intentions and insecurity, its policies’ impact on the globalized economy, its relations with Washington, and, ultimately, what type of power it will be within the existing international system. 

For what matters most is not so much Xi’s ability to present himself and his country abroad—which is, nevertheless, no doubt, important—but how successful he will be in guiding China through a decade of painful but necessary transitions. In this, perhaps all countries are not so different after all: that, as a legendary American politician once said, "all politics are local."

• The Greatest Show on Earth?
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• Why Asia Wants America
• India’s Greatest Threat?
• Why America Needs a Grand Strategy

Anka Lee

Vietnam, China lurch towards crisis

The economies of the People's Republic of China (PRC) and Vietnam are both lurching into crisis, creating new opportunities for friction between the two hostile neighbors and bringing the prospect of intensified geopolitical migraine for the United States.

Certainly, the geostrategic foundations for conflict have been laid.

In a few years, Wikipedia might have an article like this:

The PRC ... was ... growing increasingly defiant against the United States. On November 3, 2018, the United States and Vietnam signed a 25-year mutual defense treaty, which made Vietnam the "linchpin" in the United States' "drive to contain China." 

On January 1, 2019, Xi Jinping [having taken over from Hu Jintao as party general secretary in 2012] declared that China planned to conduct a limited attack on Vietnam. The reason cited for the attack was the mistreatment of Vietnam's ethnic Chinese minority and the Vietnamese occupation of the Spratly Islands (claimed by the PRC). ... 

In response to China's attack, the United States sent several naval vessels and initiated a US arms airlift to Vietnam. However the United States felt that there was simply no way that they could directly support Vietnam against the PRC; the distances were too great to be an effective ally ... Vietnam was important to US policy but not enough for the Americans to go to war. When Washington did not intervene, Beijing publicly proclaimed that the United States had broken its numerous promises to assist Vietnam.

The punch line is, this Wikipedia article on the Sino-Vietnamese War already exists, with minor edits. [1] For the United States, just substitute "the Soviet Union" and for "2019" pencil in "1979".

It isn't clear who "won" the 1979 war - a subject that is still debated today by partisans on Internet message board with the civility and detachment typical of most discussions concerning Sino-Vietnamese issues. [2]

The bloody campaign revealed numerous shortcomings of the People's Liberation Army in its late-Mao/post Cultural Revolution incarnation, and the hardened, motivated, and well-equipped Vietnamese units gave a good account of themselves.

However, if it was Deng Xiaoping's intention to demonstrate to Vietnam that it would have to confront China alone and without significant assistance from the Soviet Union, he succeeded.

It is safe to say that the United States would very much prefer not to be forced into the same predicament as the Soviet Union, ie called on to make good militarily on its contain-China commitments in Asia in the case of Chinese aggression against Vietnam.

The ideal scenario for conflict-averse leaders in Beijing, Washington, and Hanoi would be for surging economic growth to create division of labor, shared prosperity, and a win-win outcome in the region.

However, thanks to the mis-steps of the North Atlantic financial combine in 2008-2009, political roadblocks to stimulus in the United States, and the German-driven austerity fad sweeping Europe, surging economic growth simply isn't on the agenda.

Dee Woo, a columnist and provocateur from the pro-panda side of the street, contended in a column that war between China and Vietnam was "inevitable" since the PRC would find the temptation to give Vietnam a military comeuppance irresistible, and the United States and the international oil companies would see no alternative to abandoning Hanoi for the sake of joint development of South China Sea oil resources. [3]

Indeed, as the bad news stacks up, the stresses on the export-reliant economies of China and Vietnam mean that competition, beggar-thy-neighbor policies, jingoism and, when necessary, confrontation are more likely to appear on each country's agenda.

Nevertheless, the signs are that the PRC and Vietnam are responding independently to their shared economic difficulties in complementary ways, giving hope that the mutual temptation to make political and nationalistic mischief will be trumped by a shared desire by each party to keep its own economy on track.

Because of its massive economic footprint, China's travails attract the most international attention. But Vietnam is experiencing severe growing pains of its own.

Prime Minister Nguyen Tan Dung's ambitious plan of nurturing chaebol-style privatized industrial and service conglomerates manifested itself in a program of indiscriminate bank lending to politically-connected cronies and creaky state-run behemoths. The program's first fruits included growth and inflation; as inflation was tamed, the world economy hit the wall, exports have slowed and corporate profits have sagged, and the problems of non-performing loans and dodgy bank liquidity have emerged.

Aggregate non-performing loans are rumored to reach 10% of loans outstanding. In a normal banking environment, that translates into insolvency. For Vietnam's small buccaneer banks, bad loans may account for a 50% share.

Nguyen Duc Kien

Bad banking news was compounded by the arrest of high-profile Vietnamese banking tycoon Nguyen Duc Kien on August 21 for murkily defined economic crimes - perhaps a pyramid scheme to obtain hundreds of millions of dollars of bank funding on dubious collateral - followed by a run on his Asia Commercial Bank.

The Vietnamese government pumped $900 million in liquidity into the banking system to make sure no anxious depositor would go home empty-handed. Vietnam's stock index, heavily weighted toward financial companies, sagged 9%.

These recent developments were contemplated with remarkable equanimity by the international analytic and pundit community. Kien's detention was viewed as a consequence of a power struggle between his economic godfather, Prime Minister Dung, and the more old-school communists clustered around the President, Truong Tan Sang, rather than a harbinger of impending economic collapse.

Apparently, Leninist rigor counts for more than free market discipline with emerging-market financiers.

Kien's arrest - following a management purge at Vietnam's particularly inept state-owned shipbuilder, Vinashin, and the government mediated merger of a faltering bank with a stronger rival - was seen as the culmination of a process of political correction meant to ensure social and economic order.

Perhaps international optimism contains a dash of wishful thinking attributable to capitalist blue chip Standard Charter's 15% share in Kien's flagship bank, ACB, and the eagerness of foreign financiers to participate in the restructuring of Vietnam's banking industry as investors and/or M&A overlords. Standard & Poor's decided that the government had a handle on the banking situation and contagion - a pervasive loss of confidence and evaporation of liquidity that characterized the Wall Street crisis of 2008 - was unlikely, at least for now. [4]

With price/earnings ratios down to 9.4 as a result of the collapse of the price of equities, Vietnamese stocks turned into a modest buying opportunity.

Perhaps attitudes within the ruling circles of the Vietnamese Communist Party are less blase. Dropping the hammer on Kien involved sizable expenditure of cash to prop up the banking system just for the day; a certainpercentage of that cash turned into private gold holdings (Vietnam reportedly has the highest per capita holdings of gold in the world) that probably won't come back into the banking system as deposits any time soon.

If, as news reports imply, Kien was running a pyramid scheme involving trillions of dong in cash obtained from Vietnamese banks through loans or bond sales based on dodgy assets, it would also appear to be untenable for banks not to write down their losses and they will have to be recapitalized largely at government expense. [5]

It isn't as if vibrant economic performance and elite unity made this a good time to clear out the financial and political deadwood and undertake an expensive overhaul of the banking system. As Agence France-Presse reported from Hanoi, things aren't going particularly well:

[W]ith economic growth now just 4.4% year-on-year in the first half of 2012, foreign direct investment down nearly 30% in the same period and toxic debt in the fragile banking system at "alarming levels" according to the central bank, there has been increasingly vocal criticism of Dung. 

"Never has Vietnamese society faced so many unheavals which weaken the Party's leadership and threaten the survival of the whole political regime," a retired National Assembly deputy told AFP. "Some party leaders have lost patience, and feel it is time to act to eliminate these potential threats and regain public confidence," he added, speaking on condition of anonymity. 

In a scathing op-ed on Thursday, President Truong Tan Sang - one of Dung's main political rivals - said that "Vietnam is now under not insignificant pressure because of broken state-owned enterprises."

This is a degree of economic, social, and political difficulty that does not automatically translate into a "let bygones be bygones" atmosphere between Prime Minister Dung and his critics in the Politburo, especially if public dissatisfaction turns militant.

As a prominent Vietnamese economist told the New York Times:

The problem in Vietnam is a very toxic cocktail from the European debt crisis, the stagnation in the US economy plus a very critical situation in the domestic economy. It's a very dangerous mixture. [6]

Economic crisis, corruption, public discontent, and a leadership split were the ingredients for near catastrophe for the Chinese Communist Party in 1989. If all those conditions apply to Vietnam in 2012, it will be a difficult time for the Vietnamese Communist Party and foreign investors as well.

At the same time, it appears the Vietnamese government is ill-equipped to deliver another round of crowd-pleasing stimulus without reigniting inflation, reinflating its real estate bubble, or digging a deeper hole for its banks with more non-performing loans.

The regime may well decide the best way to keep people in the factories and off the streets is to crank up the export engine through another devaluation of the dong, even in the face of slackening global demand.

Up north, China is facing a similar situation, without as much political heartburn. Having dealt summarily with loose cannon Bo Xilai, the disgraced Chongqing municipality party party chief, the party appears committed to maintaining party unity in the run-up to the leadership transition. The PRC is also trying to wean itself off its reliance on exports.

The impulse to correct imbalances in the Chinese economy is represented by the reformists advising Premier Wen Jiabao. The reformists' optimistic scenario involves China renouncing the easy gratification of infrastructure spending, export processing, and indiscriminately shoveling money into the maw of state-owned industries for the sterner pleasures of modernizing the Chinese economy through increased private investment and public consumption.

When international economic growth slowed (and the inflationary overhang of the 2008-2009 stimulus militating against another massive injection of cash into the Chinese economy), Wen's team seek to turn lemons into lemonade by using the current challenges as an impetus to reform.

However, gliding up the value chain and avoiding the middle income trap is neither a quick nor easy process, while the degradation in global demand has been rapid and unforgiving. According to China's July trade figures, exports to the United States flatlined year-on-year, while exports to the EU collapsed, 16.2% lower than last July.

The bad news was compounded by confirmation of a prolonged underperformance in consumption and disappointing profits or losses reported by consumer goods producers and retailers. If the Chinese government had any hopes of decoupling domestic consumption from the vagaries of the export market, they have been put paid by the simultaneous pricking of the real estate bubble, flabbiness in the stock market, and attendant losses among the asset-trading classes.

Per Bloomberg:

Passenger-vehicle sales trailed analysts' estimates in July. Sportswear seller Li Ning Co shut 1,200 stores in the first half and department-store chain Parkson Retail Group Ltd's same-store sales rose at less than a quarter the pace of a year earlier. Gome Electrical Appliances Holding Ltd. (493) said it would report a first-half loss on lower sales. 

"The pressure on retail sales is growing bigger and bigger," said Shen Jianguang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. "When exports are fragile and investment is weak, if companies started to reduce their production or workforce, how can it be possible for consumer spending to stay strong? 

"Consumer spending is decided critically by income, and as we can see, China's industrial profits are falling at a faster speed in July, which means more headwinds for employee compensation, wages and bonuses," said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. "For non-wage income such as investment income from property and stock markets, you don't have to be an expert to tell that most people are actually losing money, so overall consumer disposable income is actually very weak." [7]

The specter of China failing to reach its annual export target of 10% growth (and thereby missing its GDP growth target of 7.5%) was apparently enough to send Wen Jiabao, essentially the PRC's apostle of doing something other than exporting, to the nation's export powerhouse, Guangdong, with words of encouragement.

However, depreciating the yuan, the only export-promotion quick-fix method with a hope of efficacy, is apparently the trade policy that dares not speak its name, perhaps because a combination of weak international demand and European and US protectionism stand ready to slam the door on this particular economic escape hatch.

Therefore, when describing what exporters should do when faced with slack international demand, increasing labor costs, and a strong currency, all Wen could do was nibble around the edges with empty exhortations to innovate and promises of regulatory relief. To put it cruelly, he sounded just like an American or European politician beating the hollow trade promotion drum:

Wen urged authorities to continue to implement and improve export policies, including fast-tracking tax rebates, expanding export credit insurance scale, bettering services to facilitate trade, cutting inspection directory and canceling unreasonable fees to ease burdens on enterprises. 

He said China should guide financial institutions to increase supply of currency hedge products to prepare for market changes. Meanwhile, Wen encouraged foreign trade enterprises to cultivate more self-developed brands, and build up international sales network. He said China should properly cope with trade frictions to minimize their negative impacts on the economy while improving investment climate for foreign capital. 

Wen noted that China's recent fine-tuning policies, especially those created since May, had produced noticeable effects in boosting market confidence and lift the economy. These pro-growth measures include more aggressive tax reduction, issuing subsidies to support enterprises' technology upgrades, and opening state-run sectors to private investors. [8]

The markets seem to be relying on expectations that the Chinese government will forget about reformism and incremental measures, turn its back on devaluation, and eventually roll out the big gun: stimulus to keep factories humming and move goods out of warehouses.

The euphemism for this expectation appears to be "confidence", a state of mind Wen repeatedly invoked on his trip to Guangdong. As Simon Rabinovitch put it in the Financial Times' Beyondbrics blog in a whistling-past-the-graveyard post that seems to embody the same kind of anxious hopefulness displayed by Westerners trying to will away the problems of the Vietnamese economy:

Wen Jiabao, China's premier ... has issued a rallying cry for "confidence". Sure, talk can be cheap. But have a look at the premier's track record when he calls for confidence in the government's economic policies. He doesn't dish the word out lightly. 

The first time was in September 2008, shortly after the collapse of Lehman Brothers. "Confidence is more important than gold and money," he said ... Weeks later, the government launched a mammoth stimulus package that powered the economy through the global financial crisis. 

Over the following three years, Wen has mentioned confidence several times - it is a hard word for a national leader to avoid. But yesterday was the first time since the news conference in March 2009 that he made confidence such a dominant theme in a speech. ... 

If history is any guide, Wen might just know what he's talking about. [9]

It appears that foreign and domestic stimulus junkies may have to wait for their "confidence" fix until early next year, as the Chinese government hopes against hope that international demand picks up, and tries to forestall inflation and a return to the blind craze of investing in real estate and other fixed assets in favor of a new kind of restructuring.

However, Wen's agenda of targeted and delayed stimulus is a hostage to circumstances: the dismal international economic outlook, the economic and political costs of a painful restructuring of China's labor-intensive export industries, and the strength of politically and ideologically motivated opposition to his agenda in the Politburo.

If Wen can't pull it off, the prognosis is for a more profligate and forgiving version of stimulus and some oblique form of currency devaluation, perhaps in the form of quantitative easing.

Even so, the fundamentals of the Chinese economy, the potential for a complementary trade and economic relationship with Vietnam, and the fraught circumstances of US-China relations in an election year still make significant, overt currency devaluation, a trade war with ASEAN competitors, and the prospects of a real war with Vietnam thankfully more distant.

Notes:
1. Sino-Vietnamese War, Wikipedia.
2. A Self Humiliation For China (China-Vietnam War 1979), YouTube. 3. Why A War Between China And Vietnam Is Inevitable, Business Insider, Jul 22, 2011.
4. S&P Says Vietnam Banks' Risks Highlighted; Contagion Unlikely, Reuters, Aug 28, 2012.
5. What tactics Kien used to do illegal business?, Vietnam Net, Aug 24, 2012.
6. Vietnam faces economic meltdown - Columnist - New Straits Times Vietnam faces economic meltdown, NST.com, Aug 25, 2012.
7. China Retailers Lose Steam, Deepening Wen's Challenges, Bloomberg, Aug 29, 2012.
8. Premier urges targeted, effective efforts to stabilize export growth, Xinhua, Aug 25, 2012.
9. Wen Jiabao, the confidence man, Financial Times, Aug 26, 2012.


Peter Lee

China's Hu seeks clean power handover with ally's promotion

China's outgoing President Hu Jintao is angling to promote one of his closest allies to the military's decision-making body, sources said, in a move that would allow him to maintain an influence over Beijing's most potent instrument of power.

Three sources with ties to the top leadership said Hu hopes to cut all of his direct links to the top echelons of power by early 2013, on the understanding that his protégé, Vice Premier Li Keqiang, is made a vice chairman of the military commission at the party's five-yearly congress later this year.

Hu wants a clean handover of the party leadership, the presidency and the top military post to his anointed successor, Xi Jinping, over the next seven months, to avoid a repeat of the past internal rancor when a transition of power took place, sources say.

They point to the example of his predecessor, Jiang Zemin, who clung onto the top job at the Communist Party's Central Military Commission for two years after stepping down as party chief and president, a move seen as unpopular with party cadres and the public.

Hu, as president, is the current military commission chairman and, like Jiang, could choose to stay on as its chief for another couple of years beyond his handover of the presidency to Xi in March 2013.

In what is seen as the ultimate bulwark of power, the commission oversees the 2.3-million strong People's Liberation Army (PLA) as well as the People's Armed Police which enforces domestic security.

Hu has not made public his plans for retirement but, unlike in the West where former presidents and prime ministers tend to fade from the public eye, Chinese leaders seek to maintain influence to avoid possible adverse political repercussions down the road.

The government generally does not comment on elite politics and personnel changes before the official announcement.

As a senior member of the commission, Li, who is also set to be named as the next premier in March 2013, would be expected to help protect Hu's legacy in the area of military affairs, which has included a more moderate approach towards Taiwan and to territorial disputes in the South China Sea and East China Sea.

"Hu hopes to go down in history as the first leader (since 1949) to step down when his term ends instead of being reluctant to go," a businessman with leadership ties said.

As well as helping to preserve Hu's legacy, analysts say Li's promotion will ensure there is no political retribution against Hu or his family by rivals who remain in power once he is gone.

But bargaining over the next leadership line-up is not over, and there is still room for change and surprises.

"CHECK AND BALANCE"

Some political analysts interpreted Hu's plan to promote Li as a move to bolster civilian oversight over the PLA - the world's biggest armed force.

But other analysts saw it as an attempt to dent Xi's political influence.

"It'll be a check and balance on Xi," a Chinese analyst said of the push to install Li, asking not to be identified due to the sensitivity of the issue.

Xi, 59, has been vice chairman of the military commission for two years and has military experience under his belt when he worked for then defense minister Geng Biao from 1979 to 1982.

Xi, like Hu, is a pragmatist seen as being keen to seize on opportunities from crises to perpetuate Communist rule and strengthen his own position, analysts say.

Though Xi is acceptable to both the Hu camp and the rival Shanghai Gang faction, the incoming premier, Li, is much closer politically to the outgoing president and belongs to Hu's own faction of the party, the Communist Youth League.

As vice chairman of the military commission, Li would oversee the 660,000-strong paramilitary People's Armed Police which acts against unrest, guards government compounds and foreign embassies and mobilizes during natural disasters.

The People's Armed Police is under the direct jurisdiction of the military commission and the State Council, or cabinet.

If Li held the positions of both premier and commission vice chairman, he would be in a stronger position to react to domestic emergencies than outgoing Premier Wen Jiabao.

Without a seat on the commission, and no say in military affairs, Wen had difficulty mobilizing the People's Armed Police to help with rescue work after the 2008 earthquake in Sichuan province which killed about 87,600 people.

"This will change if Li Keqiang becomes vice chairman of the military commission," a third source with leadership ties said.

Two People's Liberation Army generals are expected to also be named vice chairman of the commission, the sources added.

Reuters

China's Long History of Defying the Doomsayers

Losing legitimacy might not mean the end of the Communist Party. Past Chinese governments have survived worse.

Shanghai police crowd the site of a planned protest meant to model the Arab Spring. (AP)

Thirty-six years after "Great Helmsman" Mao Zedong died of a heart attack, leaving his country briefly rudderless during a time of crisis and uncertainty, the Chinese ship of state is still sailing. But is it still seaworthy? Observers are energetically debating whether the legitimacy of the Chinese Communist Party, which has endured so much, can endure. 

After all, the government today bases its legitimacy on economic growth, which may well be slowing. We can't predict the future, but we can examine the past, and Chinese history suggests that, even if the Communist Party does face a legitimacy crisis, it would not be out of character for it to survive this particular storm.

The China-watchers who insist the country faces a crippling legitimacy crisis include, perhaps most famously, Gordon G. Chang, author of The Coming Collapse of China, as well as political scientist Minxin Pei. As they see it, there are simply too many contradictions inherent in the Chinese model for it to survive.

Henry Kissinger and When China Rules the World author Martin Jacques, by contrast, have argued that, for better or worse, the Party is in good shape. And Beijing-based philosopher Daniel A. Bell, praising the China model in the New York Times op-ed pages and elsewhere, is even more optimistic. He portrays the Chinese model as steady and efficient, guided by Confucian values. Such boosters typically concede that China's government could use some sprucing up -- a reform here and there -- but maintain that it's basically sound, and in better shape than many others.

So who's right? In a sense, they both are. As specialists in modern Chinese history, we see ample precedent to suggest that, despite the Communist Party's ongoing struggle to maintain legitimacy, it could remain in secure power for the foreseeable future at the least.

In the 18th century, a British diplomat named Lord George Macartney visited China. It was a time when, like now, foreigners were torn between admiring and denigrating the country's system. Macartney likened China to a first-class fighting ship -- for a country not really defined by its navy, China seems to attract an oddly high frequency of nautical metaphors -- that had seen better days. 

The hard work of "able and vigilant officers," he said, had managed to help the awesomely enormous vessel "keep afloat." But it was impossible that it would remain seaworthy long, he predicted, as its timbers had rotted and the channels ahead were too treacherous. "She may perhaps not sink outright; she may drift some time as a wreck, and will then be dashed to pieces on the shore; but she can never be rebuilt on the old bottom," he wrote, adding that he would hardly be surprised if that end should come during his own lifetime.

Lord Macartney, best known for his failed 1790s effort to establish full diplomatic relations between Britain and the Qing Dynasty, never saw the Chinese decline he'd anticipated. He died in 1806; the Qing dynasty, which stretched back to 1644, survived another century, until 1912.

Macartney's failed prediction offers a fascinating and illuminating perspective on today's similar predictions of doom. After all, he wasn't actually wrong about the challenges facing the ethnically Manchu emperors of the Qing Dynasty. His remarkably insightful observations anticipated the spread of political corruption and the potential for rebellion from non-Manchus, who chafed under the yoke of "Tartar" rulers. It's true that the Qing dynasty fell, but only after outliving not just Macartney but generations of his heirs.

Astoundingly, China's challenges, and those facing the Qing dynasty and threatening its legitimacy, became even graver after Macartney's prediction. The stunning succession of crises included a series of internal rebellions, ranging from small-scale insurrections to vast religious risings. 

The Taiping Uprising, which coincided with the American Civil War but had an exponentially higher death toll (roughly 20 million killed, compared to the Civil War's 750 thousand), cost so much to suppress that it nearly bankrupted the Qing. The dynasty also survived two crushing military defeats at the hands of foreign soldiers and gunships, first in the Opium War (1839-1842) and then the Arrow War (1856-1860). 

The wars devastated, among other things, a legitimacy claim that the Qing and previous Chinese empires had used for centuries: that the occupant of the Dragon Throne possessed a divine mandate to govern a polity that was, in every way that mattered, the most powerful on earth.

The Qing case is a reminder that some Chinese governments have been able to endure, for generations at a time, deepening corruption, weakened legitimacy, and major challenges at home and abroad. And yet, of course, mere endurance is not proof of legitimacy.

China struggled to maintain both legitimacy and stability during one particularly difficult stretch from the early 1930s to the late 1940s. Then, as now, China was run by a tightly disciplined authoritarian organization, the Nationalist Party of Chiang Kai-shek, that was widely viewed as corrupt and nepotistic. 

Then, too, outside critics complained that the party's then-leaders shared little in common with the ideology of their previous head. Today, the capitalist "communists" are contrasted with actual-communist Mao; then, Chiang looked weak and lacking in vision next to his revered revolutionary predecessor Sun Yat-sen.

Chiang's regime, hoping to counter the perception that all they cared about was holding onto power, appealed to Confucian values of order -- just as post-Mao Communist Party leaders have. They also stressed the need for a strong central government. If the Nationalists fell, the argument went, China would be cast back into the chaos of the warlord era that had preceded Chiang's rise. A divided country would also be susceptible to becoming a "lost country," the term used to describe the fate of colonized lands such as India.

This legitimizing idea, which presented the Nationalists not so much as a group to be admired as a bulwark against horrific possible futures, might look a little familiar today. Chinese leaders have repeated similar arguments, notably in their purging populist party member Bo Xilai, which they called essential to keep China from spiraling back into the madness of the Cultural Revolution. Earlier, the government cited the implosions of first Yugoslavia and later Iraq to argue that the fall of authoritarianism leads not to stability and freedom but to international bullying, a violent settling of old scores, and disunity.

Yes, Chiang's Nationalist Party fell in 1949, ousted by the Communist Party that still rules today. The foreign observers who claimed in 1937 or 1947 that the Nationalist Party was bereft of legitimacy and about to fall turned out to be correct, but they could easily have been wrong. 

Discredited and embattled though that government may have been, had history gone just a little bit differently, the Nationalists might well have held power longer. Counter-factual histories are impossibly speculative, of course. 

Yet it would not take too much stretching to imagine that, had the Nationalist Party's White Terror campaigns of the late 1920s and early 1930s succeeded in their grim mission to "exterminate" Communists, Chiang might have held on at least through the 1950s. Not because his party was popular, but because it was accepted by the country's citizenry as the only group that might bring stability after decades of civil and international warfare.

There's probably no way to know whether, in the end, history will judge China's current leaders as more like the long-enduring Qing Emperors or the doomed Nationalists of the mid-to-late 1940s. Either is possible. For now, China's Communist Party has disproven observers who have predicted its imminent demise for years. Surprisingly adaptable and self-consciously diagnostic, the regime seems keenly aware of the precedents of history, both in China and internationally.

The Qing dynasty, as the Communist Party seems to see it, was too weak in the face of foreign pressure and failed to suppress disgruntled sectarian networks, including the anti-Manchu sworn brotherhoods (or "secret societies") that participated in the 1911 Revolution. Four decades later, the Nationalists failed to quash their political opposition. As for the Leninist states of Central and Eastern Europe whose falls Beijing so assiduously studies, they never managed to raise living standards as they'd promised.

The history-minded, stability-obsessed Communist Party's hold on power thus seems less mysterious when viewed in this historical context. And some of its actions, such as the paranoid and draconian 1999 crackdown on Falun Gong, seem less surprising.

Still, not all of the CCP's efforts have been so defensive in nature. The Party has also made some positive changes, such as loosening controls on private life, helping boost living standards, and raising China's global influence, all of which have likely made it easier for Chinese citizens to tolerate or even support the Party's rule.

The Party is talented at adapting incrementally, changing course a bit at a time. This can work for a while, even a long while, but that doesn't mean it can go on indefinitely. Both of the CCP's two most recent predecessors, struggling to maintain their legitimacy, eventually attempted their own complete reinvention. 

In the early 1900s, the Qing dynasty, in a failed bid to outrun the forces of revolution from within, abolished the Confucian examinations that legitimized it for more than two centuries and tried to reinvent itself as a constitutional monarchy. Taiwan, under Nationalist control from the late 1940s on, began its transformation into a thriving democracy under the watch of Chiang Kai-shek's son. Today, a Party president rules Taiwan not as a dictator but as an elected official.

China's military is presently powerful enough and its diplomacy stable enough that the Communist Party faces no realistic threats from outside. Internally, its control over society is effective enough that, while unrest and discontent may be widespread, there are neither well-organized opposition parties nor rebellious armies that might seriously challenge the central government. 

For now, the Communist Party finds itself in a position that would be enviable to the officials of the late Qing. It could, if it wished, reinvent itself with a new legitimizing narrative, or even open the way to a new multiparty political structure as the Nationalists did in Taiwan, likely without fear of being overthrown in the process. 

If it does not make such changes, however, then it seems likely that the corruption and internal dissent of today will continue to mount. If that happens, then it is likely only a matter of time until that dissent and corruption reach a critical mass necessary to end the regime. But, as the world learned from the late Lord Macartney's failed prediction, those processes can take many generations longer than we might expect. Even if the Communist Party's legitimacy does weaken enough for the party to fall, it might not be in any of our lifetimes.

The Atlantic

China’s coming leadership change met with a shrug

BEIJING — With China facing a worsening economy, the biggest political crisis in two decades and growing public anger and domestic unrest, what do people here say about the seismic change about to take place in country’s top leadership?

“Wu suo wei.” It doesn’t matter.

You hear this from old men exercising in the park, from young professionals heading home from work, and even, in hushed tones, from lower-ranking members of the Communist Party itself.

On one level, they’re probably right. The leadership change is unlikely to have an immediate effect on the majority of China’s 1.3 billion people. Neither will the masses have any say in the party’s mysterious selection of the nine-member standing committee of the Communist Party that rules China.

The process is so cloaked in secrecy that no one knows for sure who’s in the running besides the top two officials set to replace the current president, Hu Jintao, and Premier Wen Jiabao. Even the date of the Party Congress at which they will be announced remains unknown — with estimates ranging from September to November.

On another level, however, the leadership change will affect everything and everyone, and in many ways already has. Preparations for the 18th Party Congress have forced most of the government into gridlock for the past year, as though the entire system were holding its breath in anticipation. Major reforms and new laws have been stymied. No real solutions have been prescribed for the economy’s systemic problems even amid a worrying slowdown. And the country’s entire security apparatus has been mobilized, slowly tightening its chokehold on dissidents, journalists, grass-roots organizers and bloggers as the high-stakes meeting has drawn closer.

Apathy and concern
And so whole swaths of Beijing teeter daily between utter apathy and an intense concern that borders on paranoia.

On the paranoia side are the authorities, who have been churning out reams of pro-party copy in state-run media, running endless security drills and generally girding up for the once-in-a-decade event. The country’s thousand-some police chiefs have been summoned to Beijing for lectures. Fire inspectors have already gone through the Party Congress venues from top to bottom — twice. Authorities have been scouring the internet and municipalities for the smallest sign of unrest and heading them off — at times with force but also, surprisingly, sometimes with concessions to those protesting.

Many of the most coercive actions — like chasing rural petitioners appealing to the government for help and other troublemakers out of the capital — tend to begin closer to critical events, so it’s unclear just how this year’s security crackdown will compare with those seen during previous leadership transitions. But not since the 2008 Olympics, residents say, has security seemed so tight.

Military leaders have issued a flurry of statements assuring their loyalty to the yet-unnamed leaders. Equally desperate to show loyalty, even lowly toll station operators in Jiangsu Province have pledged on government Web sites to ease local traffic lines as a tribute to the coming Party meeting.

But among those outside government, talk of the transition is rare. Questions about the upcoming Party Congress are greeted with suspicion.

“You must forgive them, this is not something normal people talk about,” explained one low-wage worker after his co-workers answered one such question with silence at a cafeteria a few blocks west of the Party Congress venue in Beijing’s central Chao Yang district. “This is something for others to think about.”

“Why keep up with it? One leader or another, they are all the same,” said another middle-age man on lunch break. Speaking anonymously for fear of government trouble, the man, a driver-for-hire, said, “I’ll know the Party Congress has started when I see police crowding the roads, and I’ll know it’s done when the roads are clear again.”

Nurtured indifference
The indifference is something the government has at times nurtured. For years, the party — looking to preserve its lock on power — has pushed the idea that an uneventful, smooth transition was not only expected, but inevitable.

And while American children are taught basic civics classes and the importance of elections from grade school, the real method by which China’s top leaders are chosen is unknown to anyone but the leaders themselves. Many experts, in fact, believe the new line-up has already been decided at a meeting of party elites at a luxury costal resort in early August.

Similarly, while almost every aspect of American candidates’ lives has been thoroughly explored in the course of the U.S. presidential campaign, most Chinese know little about China’s leading contenders beyond their official hagiographies.

“The truth is, even if you knew such details about such individuals, it matters much less in the Chinese system,” explained Huang Weiding, former deputy editor of an influential magazine published by the Communist Party’s Central Committee. When Xi Jinping — the man expected to become China’s president and top leader — gives his first few speeches after taking the reins, his words will not be entirely his own, having been carefully vetted by his fellow members on the standing committee.

“To achieve a top position in the party, your own personality disappears from the public,” Huang said.
Because of that, it is difficult to know what, if any, change Xi and China’s other new leaders will bring.

“We are walking down a road filled with serious problems,” said one 82-year-old retired party member exercising on a recent day at a downtown park. “So of course the direction of the country is important and depends on the upcoming meeting. But these are not things for ordinary citizens to know, so what’s there to talk about?”

Washington Post