China's National People's Congress (NPC) on March 5, 2018 approved President Xi Jinping's second five-year term in office. Earlier Deng Xiaoping, the architect of China's historic reforms, had two five-year terms and so did his successors - Jiang Zemin and Hu Jintao who carried the reforms process forward.
Further, at the 19th Chinese Communist Party (CCP) meeting in Beijing in October 2017, delegates agreed to add 'Xi Jinping Thought' to Party's Constitution, alongside the 'Mao Zedong Thought' and the 'Deng Xiaoping Theory.' President Xi Jinping's dreams of a prosperous society, building a 'modern socialist country' and realizing the 'Chinese dream of national rejuvenation by restoring it to its former glory.
That President Xi is different from his predecessors is now a fact. The policy of each predecessor was different - mainly because of changed circumstances and different challenges the country faced.
China's 3,000 lawmakers at the 13th National People's Congress (NPC) voted for changes in National Constitution to allow the president to serve for another term. Analysts say that President Xi, already the General Secretary of Communist Party of China (CPC) and head of Central Military Commission (CMC), is expected to utilize the consolidation of power to help achieve two well-defined strategic goals: building a modern socialist country and realizing the 'Chinese dream of national rejuvenation' by restoring the nation to its former glory. More specifically by 2020, as a 'moderately prosperous' country, and by 2050, an advanced socialist nation. Thus Xi at 64, is put on a pedestal equal to Mao Zedong's.
Now he has appointed his most trusted allies and loyalists to carry his polices forward. The appointment of Wang Qishan as Vice-President is meaningful as he has played a major role in Xi's signature anti-corruption campaign. Wang, 69, and Xi have known each other since their days as 'sent down youths' in China's countryside during Mao's Cultural Revolution. After Xi came to power in 2012, Wang was charged with overseeing Xi's campaign against corruption, disciplining more than 1.5 million party cadres, including the country's retired security chief and another official once seen as a presidential contender. This campaign to clean up the party's pervasive corruption has arguably been Xi's most popular initiative, pressuring its 89 million members to toe the line - with more than 1.5 million officials punished in the past five years. Legislators are finalizing the creation of a new anti-graft apparatus that will also watch over non-party members - everyone from managers at state-owned companies to people in administrative roles at schools and hospitals. In Beijing alone, one of the areas where the new system was established on a pilot basis, the number of people under scrutiny quadrupled to one million, or about five percent of the city's population. New national and local "supervision commissions" - investigative agencies focused on corruption - will operate alongside the Communist Party's Central Commission for Discipline Inspection (CCDI), sharing offices, personnel and perhaps leadership.
Appointing Wang could extend decision-making beyond the seven-member Politburo Standing Committee, the party's top body and a key component of the collective leadership system set up after Mao's tumultuous rule. Basically, collective leadership will be relying on a collection of personal advisers to run the country and make decisions. The largely ceremonial role of Vice-President is second in succession to carry out duties delegated by the chief executive. His appointment allows Xi to retain a trusted surrogate with connections to the US diplomatic and financial communities. For, Wang helped set up China's first investment bank with Morgan Stanley in the 1990s and also established enduring ties with prominent Wall Street figures such as Hank Paulson.
The NPC, the country's legislature, is planning to approve a plan for merger of China's banking and insurance regulators in an effort to bolster ability to monitor financial institutions. The $42 trillion needs control lending and reduce high level of corporate debts. At the same the same time, both agencies would relinquish some of their broad policy responsibilities to China's Central Bank, which would acquire a greater role in preserving financial stability. Thisshall take away many responsibilities from the National Development and Reform Commission, a bastion of central economic planning and heavy industry and from other commissions and bureaus. Moreover, the moves could consolidate some overlapping bureaucracies hindering effective policies.
Merger of regulators with State Bank is for better control and national management. But it falls short of widely discussed plans over the past few years of possible creation of a financial super-regulator that would also include China's Central Bank and the China Securities Regulatory Commission. The securities regulator oversees the country's stock markets and competes for jurisdiction with other banking and insurance agencies for oversight of a gray area of investments that combine aspects of debt and equity. The Central Bank seeks to maintain the overall stability of the financial system.
The intellectual justification for the merger of the banking and insurance regulators is to create a single regulator for financial institutions that accept money from the public and invest it with guaranteed rates of return. But the China Securities Regulatory Commission needed to stay separate from the new banking and insurance agency because its role involves overseeing markets in which customers know that they are taking a risk of non-recovery of investments.
Deepening water and soil pollution, following China's industrial takeoff and feverish urban growth, has placed strains on land and water resources. The reforms proposed are creating two super-ministries to Ministry of Natural Resources and Ministry of Ecology and Environment. While the former will gain control over urban and township planning as well as management of (water, grasslands, forests, wetlands, and maritime resources) the latter will take over responsibility for climate change and greenhouse emissions policies. They were previously under the National Development and Reform Commission. Furthermore, it will also take over anti-pollution tasks previously handled by the ministries of land and water resources. Administration Bureau shall take over the responsibility for registering and supervising companies, food and drug inspection and price supervision. The new bureau will also control anti-monopoly actions from the Ministry of Commerce and another, smaller government agency.
Now the locus of power will be from State Council to the Politburo Standing Committee and shall handle the core question of economy. The common problems are low growth, labor-intensive growth to be converted to high-quality growth, expanding domestic consumption, diverting resources from ghost factories and unproductive units and; transfer from state-owned to private companies like Alibaba.
Chinese leadership acknowledges that even the best-designed system cannot work if there is a dearth of competent personnel to run it - a limitation highlighted by Xi in his first term as president; hence strong emphasis is laid on cultivating a new generation of highly educated, loyal, and most important, incorruptible Party leaders. A key challenge here lies in stemming the migration of China's top talent to the private sector.
(To be continued)
(The writer is currently Visiting Faculty, Department of Defence and Strategic Studies, Quaid-i-Azam University, Islamabad. He was former adviser in COMSATS Institute of Information Technology and ex-president, Islamabad Policy Research Institute)