Study "Xi Jinping - the new era"


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Under the sponsorship of Nestlé, China Trade Winds Ltd. is pleased to announce the release of its political Study, following the 18th Congress: “Xi Jinping, the new era”.

Available in English as well as French, this Study draws first an overall assessment of Hu Jintao’s governance, his successes and failures.

In its second part, it draws detailed portraits of each one of the new 25-member Politburo (including a focus on the Central Military Commission) and their political links and clans.

Finally, it broaches on the future: what concept of reform has been in the works for Xi Jinping and Li Keqiang? Will the five other members, most of them Jiang Zemin’s protégés, support or oppose their drive? What will be reformed first? The Council of State, capital accounts, health, city hukou’s, land use, taxation system, state enterprises?

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Study "Xi Jinping - the new era"

  1. 1. « XI JINPING - THE NEW ERA » The power emerging from the 18th CongressBACKGROUND AND PERSONALITIES OF THE FIFTH GENERATION OF LEADERS, IMPACT ON FUTURE POLICY December 2012Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 1
  2. 2. Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 2
  3. 3. INTRODUCTION 上有政策,下有对策 - shàng yǒu zhèngcè, xiàyǒu duìcè, “On the surface there is the strategy of power, at a deeper level there is the strategy of opposition.” This saying has just been perfectly illustrated by the succession war played out between Hu Jintao,the outgoing leader, and Jiang Zemin, his predecessor. In fact for over a year now, with their respective factions – the “Youth League” and the “ShanghaiClub” – each leader has worked to ensure his influence would live on after November 2012 – when thefourth generation of leaders would step down. The overall aim of these manoeuvers was to nominate the members of the Central Committee, thePolitburo and the Standing Committee, the highest decision-making bodies, elected by a show ofhands at the XVIII Congress (Shíbādà - 十八大 ), held from November 8th to 14th 2012. The results are finally in after numerous changes to the lists making the rounds until mid-October.There has been upheaval – huge and unprecedented – due to two chance incidents (possibly alsohelped by various secret bodies) that took place in the space of five weeks:- At dawn on February 7th 2012, Wang Lijun, Chongqing Party Secretary Bo Xilai’s right-hand man, donned a wig and left the city disguised as a woman, driving his car with false number plates. He was heading to the American Consulate in Chengdu, 325 kilometres away, where he would find short-lived refuge. This was the first twist in a series of events that would end with the Secretarys fall from grace, a man who until then had been one of the main pretenders to power. Bo Xilai was one of Jiang Zemin’s chief lieutenants – however the latter’s protection was not enough to prevent his downfall.- In the small hours of the morning of March 18th 2012, Ling Gu, a spoiled child of the red aristocracy, died after crashing his Ferarri against a concrete pillar on the capital’s fourth ring road; in the Ferrari with him were two virtually undressed female students. For his father, Ling Jihua, Hu Jintao’s right-hand man, the accident would signal the end of his rise.These two incidents would derail the two factions’ succession strategies. They were supposed to remainin the wings, now suddenly they were centre stage. Heroes would be dismissed, sullied, and the Partywould see itself weakened as never before over the last few decades, damaged in terms of its imageand legitimacy. However, as soon as the respective factions’ succession strategies were dismantled, the two groupsset about finding new alliances and new areas of agreement. The impetus for this – still ongoing – wasto avoid a catastrophe: the implosion of the Party. Under pressure, the two factions would pull togetherto find common ground for a new team.Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 3
  4. 4. This study is written in three parts. To echo the saying that opens the study, the first two partsconcentrate on the surface level and outline the “strategy of power”, whereas the last part digs downto reveal the “strategy of opposition”. The first part aims to present a short overview of Hu Jintao’s era, his successes and failures, and aninterpretation of his tenure – neither heroic nor daring, but producing some genuine results, even interms of reform. The second part scrutinises the backgrounds of the 25 new leaders, first those of the StandingCommittee, then the Politburo members. These detailed profiles highlight their specific career paths,affiliations, leanings and routes to power. The final section draws up a list of the policies that can be expected from this team today,evaluated in terms of what they have said or planned for and in light of the pressing issues of the day. In this way we hope to tackle some of the questions on the horizon and share our insights with ourreaders, be they international companies, diplomats and politicians or political science researchcentres.By March 2013, we will be delivering an update to this study, focusing on the composition of theministries.We are always available for exchanges and answers to your questions: are happy to organise conferences on this subject to suit your needs.Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 4
  5. 5. N°6 : WANG QISHAN (王岐山) THE “FIREMAN” PROMOTED TO POLICE CHIEF Aged 64 and at the pinnacle of his career, Wang Qishan is an apparatchik from the privileged“princeling” world and an economist with a rare talent acknowledged domestically andinternationally. Born in 1948 in Qingdao, Shandong, to intellectualparents (his father eventually became a professor atTsinghua), Wang Qishan, like every youngster during theCultural Revolution, was sent at 21 to a rural commune inYanan, Maos former headquarters in Shaanxi. What couldhave been a miserable experience turned out to be a strokeof luck: there he met and married the daughter of the leaderYao Yilin. He was able to rapidly resume history studies in Xianand work in museums. Under his father-in-laws wing, he wentto Beijing after Mao’s passing away. A cunning young blade,after four years at CASS (Chinese Academy of SocialSciences) he directed an institute and at 34 joined the ruralresearch bureau of the Central Committee. He wasadmitted to the Party a year later. Aged 40, he cut his teeth in banking. He quickly came to the attention of Zhu Rongji, governor ofthe Peoples Bank of China (the Central Bank), who made him his No.2 (1993-1994). During his stint asvice Premier (1991-1998), Zhu promoted him to head of China Construction Bank (1994) and then senthim to Guangdong as vice-governor (1997) to clean the mess of GITIC, the financial arm of theGuangdong government that found itself in difficulties after making some risky moves (which involvedmost of the Western banks present in China) and had USD 7 billion of debt. Wang tackled the situationwith brio, overseeing the first bankruptcy of a Chinese provincial bank while keeping the bust to aminimum for everyone – Beijing and foreign creditors. Henceforth he would be known as the “fireman ofthe Chinese economy”. During the same period, he struck up a close friendship with Jiang Mianheng, the businessman and son of Jiang Zemin, which enabled him to add his third and most powerful patron. All these godfathers gave him wings. In 2002, aged 54, he was Party Secretary of Hainan Island. In 2003 he took over the capitals city hall at the height of the SARS epidemic, replacing a passive mayor. Restoring links with the World Health Organisation, Wang Qishan dealt with the crisis and restored the Partys image, at the same time consolidating hisimage as the man for a crisis, able to face the situation and make quick decisions based on goodinstinct. In 2006-2008 he managed most of the construction for the Olympic Games.Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 5
  6. 6. As a reformer – at least as far as finance was concerned – and looking at reforming credit andtaxation, his place on the Standing Committee was a foregone conclusion. Although he himself was apowerful banker, he campaigned to end the State banks monopoly and to make more servicesavailable for foreigners. In a recent speech on strategies for getting out of the crisis, Wang displayed anenthusiasm that was new to the CPC after 20 years of blind faith in liberalism: he believed in the needfor “two hands”, Adam Smiths invisible hand of the market and the government hand to correct anyexcesses. A highly intelligent man, he was one of the first socialist leaders to be able to speak fluent English.Blessed with a rare sense of humour, he also seduced figures in the outside world such as Henry Paulson,the former US Treasury Secretary, who hoped he might become an important dialogue partner. For itspart, the Chinese business community wanted new measures to boost investment abroad. At the 18th Congress, Wang Qishan was finally given the Central Commission for DisciplineInspection after initial thoughts that he would be made President of Parliament or even Premier. Thispragmatic and brilliant economist would have been an excellent candidate for resetting and furtheropening the economy, deregulating the currency (a task that will fall to Ma Kai). This apparent failurehas intrigued the entire international community, given Wangs flamboyant charisma. But theanti-corruption battle is a priority for the regime, which has been sorely tested by the Bo Xilai affair.Putting such a valuable man in this role could give fresh – if somewhat late – impetus to this fight – theapparent priority of Xi Jinping’s government.Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 6
  7. 7. Study carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 7
  8. 8. TO ORDER THIS STUDY, PLEASE CONTACT levdlc @leventdelachine.comStudy carried out by China Trade Winds Ltd. for the exclusive use of xxx China Page 8