Burson-Marsteller Perspective on the 18th Party Congress


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Burson-Marsteller Perspective on the 18th Party Congress

  1. 1. Burson-Marsteller’s Perspective onthe 18th Party Congress The 18th National Congress of the Communist Party of China (CPC) (the 18th Party Congress) was held from November 8 to 14, 2012. Convening every five years, the National Congress plays a leading role in China’s system of governance and politics as the highest body of the CPC. It is where the top Party leadership transitions occur. These are the most important of all leadership transitions in China’s parallel Party and government system – with the Party in a superior position to government, which implements Party policy and ideology. Policies and messages released and communicated during the National Congress provide guidance with major implications for China’s national policy development and governance in the short and medium terms. The 18th Party Congress was in many respects the most Their respective positions in the government will be important event of 2012 for China. Its ultimate confirmed in the National People’s Congress (NPC) in significance is that it has provided clarity on the two March 2013, when Xi is expected to become the new questions that will fundamentally affect China’s future President and Li the new Premier. This will formally development and direction: Who will lead China in the complete the overall leadership transition at the next decade? And what is the nation’s path forward? national level in China. Leadership Facing More Complex Challenges I. Empowered New Leaders Taking on China’s Complex Challenges without Drastic Policy Xi Jinping assumes the leadership at a critical juncture Changes in China. After three decades of double-digit growth, China’s rapid development has begun to slow. The The 18th Party Congress witnessed a once-in-a-decade leadership faces new and more complex challenges. power transition from the fourth generation Increasing external pressures, and growing gaps or leadership under Hu Jintao to the next generation imbalances in Chinese society and development (e.g. under Xi Jinping, and set forth the fundamental policy between rich and poor, urban and rural, and various direction under the new leadership. regions of China), make further economic and political reforms more urgent than ever to drive and sustain Despite issues that arose in the lead up and China’s next phase of development and to maintain competition for leadership positions among various the Party’s rule. groupings and individuals within the Party, compared to previous power transfers, this year’s was considered A key challenge will be to maintain the legitimacy of smoother, more orderly and better institutionalized in the Party. This has to a large extent been based on a number of important aspects. perceived competence in managing the economy and development (with Marxism a less compelling political The new leadership is expected to have more focused ideology than in past decades). Slowing growth and decision-making power – with seven members of the rising concerns around corruption within the Party and Politburo Standing Committee (PSC) as opposed to government have the potential to seriously undermine nine – and a pragmatic, straightforward leadership this legitimacy in the coming decade – if genuine style. In the near term, policy continuity will be their reforms and rectification measures are not top priority. implemented. The 18th Party Congress marked the leadership Leadership with More Decision-making Power transition at the very top of the CPC power structure – in the PSC, which is the supreme decision-making Former General Secretary Hu Jintao has been praised body of the Party. The newly elected seven PSC for handing over both leadership of the Party and the members are Xi Jinping, Li Keqiang, Zhang Dejiang, Yu People’s Liberation Army Central Military Commission Zhengsheng, Liu Yunshan, Wang Qishan and Zhang to Xi Jinping, ensuring a more complete power Gaoli. Xi was named CPC General Secretary. succession. Some have heralded this as the Party’s first clean power transfer. Hu’s predecessor, Jiang Zemin,Prepared by Burson-MarstellerGovernment Affairs & Communication Group 1
  2. 2. Burson-Marsteller’s Perspective on the 18th Party Congressheld power over the military for another two years II. China’s Path Forward – Socialism with Chineseafter stepping down as CPC General Secretary in 2002. CharacteristicsThis clean handover empowers the new leadershipunder Xi with greater decision-making and policy The fundamental policy direction of the 18th Partyagenda-setting abilities. Congress was expressed in Hu Jintao’s report delivered at the opening session of the Congress. It summarizedGreater Efficiency through Streamlined Authority past achievements and problems and clarified China’s path forward for years to come:The new PSC has been reduced from nine to sevenmembers. Because of the PSC’s collective and “We must unswervingly follow the path of socialismconsensus-based decision-making approach, a smaller with Chinese characteristics, rejecting both the old andinner core will conceivably find it easier to reach rigid closed-door policy and any attempt to abandonagreement and make decisions than its predecessors. socialism and take an erroneous path.”Together with a new round of governmentalreorganization, the Party-government is emphasizing This approach rejected both the so-called “Chongqingefforts to improve efficiency in decision-making and model”, a call to revert to revolution-era politics, andpolicy-execution. the “Western model”, leading to multi-party democracy. This statement was a clear affirmation thatMore Pragmatic Leaders China will continue to develop along “the path of socialism with Chinese characteristics”, in other words,Xi Jinping and Li Keqiang were both born in the 1950s. a CPC-led market-oriented economy.In contrast to their predecessors Hu Jintao and WenJiabao (who were born in the 1940s and spent their This has reduced doubts about whether the reformyouth in the Sino-Soviet honeymoon period and and opening-up will continue (there had been callsstudied Russian), Xi and Li were sent to the among some Party intellectuals in the lead up to thecountryside during the Cultural Revolution to “learn transition for a reversion to a greater role forfrom the peasants” in their teen years. This experience government and stricter ideological controls).contributed to their pragmatic view of humanity. CPC Ideology with Continuity and UnificationAnother aspect of the transition worth noting is thereduction in the number of technocrats in the At the 18th Party Congress, Hu Jintao’s “Scientificleadership group. Most former PSC members of the Outlook on Development” was given a moreHu era had a technical or engineering background, but prominent position, equal to the “guiding thoughts” ofXi and many of his fellows were educated in social Mao Zedong, Deng Xiaoping and Jiang Zemin.sciences, especially law and economics. This has beenwidely considered as a response to China’s evolving As all of his predecessors espoused their ownneeds for nation-building from constructing ideological legacies (Mao Zedong’s Thought, Denginfrastructure to improving institutions and the rule of Xiaoping’s Theory and Jiang Zemin’s Three Represents),law. It’s worth noting whether this tendency will be Hu incorporated the “Scientific Outlook onreflected in the leaders selected across China moving Development” into the CPC Constitution as hisforward. ideological legacy. This ensures the Party’s “socialist theory with Chinese characteristics” encompasses theStability through Policy Continuity contributions of each generation’s leaders.While the new leaders’ personalities and past The incorporation of the “Scientific Outlook onexperience provide fresh perspectives, policy Development” into the CPC Constitution is said tocontinuity will be the top priority at least in the near represent a very significant stage of CPC ideologicalterm. It is widely believed that a sharp turn in macro development because it confirms the theory as part ofpolicies would interrupt economic development and the core ideological framework that guides the Partypotentially threaten regime stability. and government moving forward.The 18th Party Congress has inherited the main tone This “modern stage” of CPC ideology supposedlyand narrative from the previous leadership, and has reflects the latest situation and challenges facing thealso flagged adjustments and reforms of China’s Party and the country. In many respects it is alignedpolicies, which will be made by the new government more closely with contemporary developmentleadership. theories than with traditional Marxism.Prepared by Burson-MarstellerGovernment Affairs & Communications Group 2
  3. 3. Burson-Marsteller’s Perspective on the 18th Party Congress“Moderately Prosperous Society” in Quantity and how to reduce the negative effect of industryQuality monopolies and special interest groups.In Hu Jintao’s report to the Congress, China’s Achieving Moderately Prosperous Society throughdevelopment goal was for the first time set as Reform“completing the building of a moderately prosperoussociety by 2020” instead of “building a moderately Both economic and political reforms are regarded asprosperous society”. “Moderately prosperous society” the main drivers for completing the building ofis the CPC’s phraseology representing a developmental moderately prosperous society. Hu Jintao’s reportobjective for China’s drive towards modernization. By stressed the need for deepening both reforms, whichsetting a timeline for the goal, the Party expressed its requires greater political courage and wisdom fromdetermination and confidence in advancing the the new leadership. Under these circumstances, thecountry’s development. new leadership’s capacity and initiative in conducting reform are vitally important. In many respects theA moderately prosperous society, according to Hu’s challenges facing China’s new leaders are greater thanreport, can be characterized in both quantity and those confronting their predecessors.quality.  Economic Reform  Focus on Quantity The 18th Party Congress reaffirmed that China’s fastChina aims to “double its 2020 GDP and per capita development over the past 30 years was mainly due toincome for both urban and rural residents from 2010 reform and opening-up; and reconfirmed that China’slevels”. This statement is significant, as for the first future development will only be successful bytime the Party or the government set the target for continuing on this path. Strong recognition of theper capita income growth. This goal was set to address strategic significance of reform and opening-up wasconcerns regarding the widening gap between fast written into the newly amended CPC Constitution.GDP growth and slower individual income growth. With this clear direction established, the 18th PartyFor the next decade, China’s development strategy will Congress reiterated the priorities that were outlined infocus more on improving people’s well-being and life the 12th Five-Year Plan and this year’s NPC, includingquality with tangible economic benefits and a better transforming China’s economic growth pattern,protected environment to meet rising expectations. adjusting the economic structure, spurring industrial upgrading through technology innovation, and  Focus on Quality developing strategic emerging industries, amongstAccording to the Party, a moderately prosperous others. With strong recognition of economic reformsociety should be sustainable and better balanced. By priorities, the Party and the government will act inadvocating the building of a “beautiful country”, Hu concert to put forward more concrete and detailedJintao’s report emphasized ecological progress, policies and measures.incorporating it for the first time into the country’soverall “Five-in-One” development objective together Hu Jintao’s report underscored an underlying issue inwith economic, political, cultural and social progress. It economic reform – “striking a balance between theis a response to China’s growing environmental role of the government and that of the market.” At thepressures and resource constraints, and part of a beginning of China’s economic reforms, the countrypromise to deliver more sustainable economic was a government-led planned economy. The aim ofdevelopment. reform is to effect a transformation to build a government-led market-oriented economy, which canChina is also increasingly focused on how to upgrade leverage the market’s potential and ensure socialits industries to move up the value chain and achieve equity and justice. The transfer of power fromless resource intensive and more sustainable government to the market is the crux of thisdevelopment. This is part of an overall attempt to transformation. However, current progress is very“transform the economic growth pattern” (including uneven, as in many aspects the government is stillless reliance on exports and investment, more more of an “economic commander” than an “invisibleinnovation and consumption, etc). hand” – with significant inefficiencies and obstacles to development as a result.Meanwhile, to achieve higher quality development,there is also increasing focus on how to provide more Optimistically, a number of new PSC members areopportunities for small and medium sized private regarded as pro-market. Xi Jinping himself has beencompanies, how to develop the service sector, and credited for promoting private sector and externalPrepared by Burson-MarstellerGovernment Affairs & Communications Group 3
  4. 4. Burson-Marsteller’s Perspective on the 18th Party Congressinvestment in Fujian and Zhejiang provinces; Li reform. However, it won’t be an easy task. Despite theKeqiang also publicly set out his intentions on new leaders’ focus on anti-corruption, questionsstrengthening economic reforms after the 18th Party remain as to whether they will be capable ofCongress; Yu Zhengsheng tends to be more liberal in establishing independent investigation mechanisms,economic reforms; and Wang Qishan – although now raising government accountability and ensuringtapped to lead the Central Discipline Inspection judicial independence.Commission (the Party’s disciplinary body) – is viewedas one of the country’s strongest economic reformers.Their past experience and pro-market attitudes could III. Conclusions and Recommendationsreinforce the new leadership’s will and capacity indeepening economic reform. The main significance of the 18th Party Congress was a peaceful transition of China’s top leadership and theChina will continue the process of reform and opening continuity of fundamental policies for China’s socialto the world, with an active strategy to utilize foreign and economic development. “Maintaining stabilityinvestment to advance its development. However, the while making progress” will continue to be thegovernment is placing increasing emphasis on “making foremost priority for the new leadership.better use of” or being more selective about foreigninvestment – for example to attract and gain needed China will continue to focus on economictechnology, expertise and talent while avoiding foreign development and accelerate reform and opening-up.investment with low value-added and high resource This means the government will continue to welcomeconsumption or pollution. participation and contributions from foreign companies in China’s development. However, the  Political Reform government has been increasingly focused on qualityHu Jintao urged in his report to deepen “political and efficiency, rather than only using GDP growth instructure reform”. Such reform can be expected more defining development. People’s livelihood,at an operational and administrative level, rather than environmental protection, industrial upgrading andat a fundamental level. It is consistent with the Party’s technology innovation are all receiving greaterguiding principle of gradualism on political reforms. emphasis. Foreign companies need to have a clearMoreover, the 18th Party Congress stressed that understanding of policy directions and priorities, andChina’s political reform will not imitate “Western to be able to adapt and align their business strategiesmodels” and will always be under the leadership of effectively in China. This is a fundamental startingthe CPC. point to seize new opportunities and tackle emerging challenges.Both Hu and Xi put a great deal of emphasis on theimportance and urgency of fighting corruption. Hu Following the top Party leadership transition at thesaid in his report that if the Party “fails to handle this 18th Party Congress, there will be a transfer of powerissue well, it could prove fatal to the Party, and even at the central government level and variouscause the collapse of the Party and the fall of the organizational adjustments to government agencies,state”. In a speech after the closing of the 18th Party which are to be completed at next year’s NPC. AnyCongress, Xi echoed that concern. associated organizational adjustments at the local levels will continue throughout 2013. ForeignThe unusually tough-sounding statements expressed companies should monitor these changes closely andthe leaders’ seriousness about the issue, and it is evaluate their relationships and engagement with keyhighly likely that anti-corruption will be prioritized by government stakeholders on a continuous basis.the new leadership as a focus of and driver of political *****Copyright ContactThis material contained herein is the property of Burson-Marsteller and is given Ms. Jane Zhangto you on the understanding that such material and the ideas, concepts and Head of Government Affairs and Communicationsproposals expressed in it are the intellectual property of Burson-Marsteller and Tel: 86-10-5816-2584are protected by copyright. Email: Jane.zhang@bm.comPrepared by Burson-MarstellerGovernment Affairs & Communications Group 4
  5. 5. Burson-Marsteller’s Perspective on the 18th Party CongressAppendix: Brief Introduction to the Seven PSC Members Xi Jinping, General Secretary of the CPC Central Committee ‒ Xi was appointed Vice President of the PRC in 2008. ‒ In 2007, Xi was promoted as Shanghai Party Secretary, a position he held until his elevation to the PSC in October. ‒ In 2002, Xi assumed the position of Deputy Provincial Party Secretary of Zhejiang before taking office of Provincial Party Secretary in 2003. ‒ In 1995, Xi became Deputy Provincial Party Secretary of Fujian. ‒ Born in 1953; Xi holds a PhD in Law from Tsinghua University. Li Keqiang ‒ Li was appointed Vice Premier in 2008, following his rise to the ranks of the PSC in 2007. ‒ In 2004, Li was promoted as Provincial Party Secretary of Liaoning. ‒ In 2002, Li took office of Provincial Party Secretary of Henan after serving as Deputy Party Secretary and Governor of the province. ‒ Li spent the next 16 years working in various capacities at the Communist Youth League of China after graduation, under former CPC General Secretary Hu Jintao. ‒ Born in 1955; Li holds a PhD in Economics from Peking University. Zhang Dejiang ‒ Zhang was appointed Vice Premier in 2008. ‒ In 2002, Zhang was appointed a Politburo member, and took office as Provincial Party Secretary of Guangdong. ‒ In 1998, Zhang was named Provincial Party Secretary of Zhejiang. ‒ In 1995, Zhang assumed the position of Party Secretary of Jilin. ‒ Zhang acted as Vice Minister of Civil Affair from 1986 to 1996 and served in various party positions in Jilin since 1983. ‒ Born in 1946; Zhang holds a B.A. in Economics from Kim Il Sung University in North Korea. Yu Zhengsheng ‒ Yu was appointed Municipal Party Secretary of Shanghai in 2007 and a Politburo member in 2002. ‒ Yu served as Provincial Party Secretary of Hubei in 2001. ‒ Prior to that, Yu assumed the position of the Minister of Construction in 1998. ‒ Yu took office as Mayor of Qingdao City from 1987 to 1994. ‒ Born in 1945; Yu holds a B.Sc. in Missile Engineering from Harbin Military Engineering Institute.Prepared by Burson-MarstellerGovernment Affairs & Communications Group 5
  6. 6. Burson-Marsteller’s Perspective on the 18th Party Congress Liu Yunshan ‒ Liu was appointed a Politburo member in 2002. ‒ Liu has been leading the Propaganda Department of the CPC Central Committee for nearly 20 years since he assumed the positions of Vice Minister in 1993 and then Minister in 1997. ‒ From late 1970s to 1993, Liu served as a reporter and then an official in Inner Mongolia Autonomous Region. ‒ Born in 1947; Liu graduated from the Central Party School of the CPC Central Committee. Wang Qishan ‒ Wang was appointed Vice Premier in 2008 and a Politburo member in 2007. ‒ Before that, Wang was Mayor of Beijing since 2004. ‒ Wang was appointed Provincial Party Secretary of Hainan in 2002. ‒ In 2000, Wang was promoted as Director of the State Councils Economic Restructuring Office. Prior to that, Wang was Vice Governor of Guangdong. ‒ In the early years of his career, Wang held various leading positions in several state-owned financial institutions, including China Construction Bank. ‒ Born in 1948; Wang holds a B.A. in History from China Northwest University. Zhang Gaoli ‒ Zhang was appointed Municipal Party Secretary of Tianjin and a Politburo member in 2007. ‒ In 2001, Zhang became Governor and then Provincial Party Secretary of Shandong. ‒ Before that, he served in several party and government roles in Guangdong Province for 12 years, where he worked as an oil worker since 1970. ‒ Born in 1946; Zhang holds a B.Sc. in Statistics from Xiamen University.Prepared by Burson-MarstellerGovernment Affairs & Communications Group 6