Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

China's Next Generation of Leaders, Looking to 2012

Politics / China Sep 17, 2010 - 03:57 AM GMT



Best Financial Markets Analysis ArticleIn 2012, the Communist Party of China’s (CPC) leaders will retire and a new generation — the so-called fifth generation — will take the helm. The transition will affect the CPC’s most powerful decision-making organs, determining the makeup of the 18th CPC Central Committee, the Political Bureau (Politburo) of the Central Committee, and most important, the nine-member Politburo Standing Committee that is the core of political power in China.

While there is considerable uncertainty over the handoff, given China’s lack of clear, institutionalized procedures for succession and the immense challenges facing the regime, there is little reason to anticipate a succession crisis. But the sweeping personnel change comes at a critical juncture in China’s modern history, with the economic model that has enabled decades of rapid growth having become unsustainable, social unrest rising, and international resistance to China’s policies increasing. At the same time, the characteristics of the fifth generation leaders suggest a cautious and balanced civilian leadership paired with an increasingly influential and nationalist military. This will lead to frictions over policy even as both groups remain firmly committed to perpetuating the regime.

The Chinese leadership that emerges from 2012 will likely be unwilling or unable to decisively carry out deep structural reforms, obsessively focused on maintaining internal stability, and more aggressive in pursuing the core strategic interests it sees as essential to this stability.

Just as China’s civilian leadership will change, China’s military will see a sweeping change in leadership in 2012. The military’s influence over China’s politics and policies has grown over the past decade, as the country has striven to professionalize and modernize its forces and expand its capabilities in response to deepening international involvement and challenges to its internal stability. The fifth generation military leaders are the first to have come out of the military modernization process, and to have had their careers shaped by the priorities of a China that has become a global economic power. They will take office at a time when the military’s budget, stature and influence over politics is growing, and when it has come to see its role as extending beyond that of a guarantor of national security to becoming a guide for the country as it moves forward and up the ranks of international power.

Civilian Leadership

Power transitions in the People’s Republic of China have always been fraught with uncertainty because the state does not have clear and fixed institutional procedures for the transfer of power between leaders and generations. The state’s founding leader, Mao Zedong, did not establish a formal process before he died, giving rise to a power struggle. Mao’s eventual successor, Deng Xiaoping, was also a strong leader whose personal power could override rules and institutions. But Deng’s retirement also failed to set a firm succession precedent. He saw two of his chosen successors lose out amid factional struggles, and Deng maintained extensive influence well after formally retiring and passing power to Jiang Zemin and naming Jiang’s successor, current President Hu Jintao.

Even though China does not have any fixed rules on power transfers, a series of precedents and informal rules have been observed. Recent years have seen a move toward the solidification of these rules. Deng set a pattern in motion that smoothed the 2002 presidential transition from Jiang to Hu despite behind-the-scenes factional tensions. As mentioned, Deng had also appointed Hu to be Jiang’s successor. This lent Hu some of Deng’s great authority, thus establishing an air of inevitability and deterring potential power grabs. This leap-frog pattern was reinforced when Jiang put Vice President Xi Jinping in line to succeed Hu in 2012. The coming transfer will test whether the trend toward stable power transitions can hold.

Characteristics of the Fifth Generation

While all countries experience leadership changes that can be described as generational in one sense or another, modern Chinese history has been so eventful as to have created generations that, as a group, share distinct characteristics and are markedly different from their forebearers in their historical, educational and career experiences. Deng created the concept of the “generational” framework by dubbing himself the core second-generation leader after Mao, and events and patterns in leadership promotion and retirement reinforced the framework. The most defining factor of a Chinese leadership generation is its historical background. The first generation defined itself by the formation of the Communist Party and the Long March of exile in the 1930s, the second generation in the war against the Japanese (World War II), and the third during civil war and the founding of the state in 1949. The fourth generation came of age during the Great Leap Forward in the late 1950s, Mao’s first attempt to transform the entire Chinese economy.

The fifth generation is the first group of leaders that cannot — or can only barely — remember a time before the foundation of the People’s Republic. These leaders’ formative experiences were shaped during the Cultural Revolution (1967-77), a period of deep social and political upheaval in which the Mao government empowered hard-liners to purge their political opponents in the bureaucracy and Communist Party. Schools and universities were closed in 1966 and youths were sent down to rural areas to do manual labor, including many fifth-generation leaders such as likely future President Xi Jinping. Some young people were able to return to college after 1970, where they could only study Marxism-Leninism and CPC ideology, while others sought formal education when schools were reopened after the Cultural Revolution. Very few trained abroad, so they did not become attuned to foreign attitudes and perceptions in their formative days (whereas the previous generation had sent some young leaders to study in the Soviet Union). Characteristically, given the fuller educational opportunities that arose in the late 1970s, the upcoming leaders have backgrounds in a wide range of studies. Many were trained as lawyers, economists and social scientists, as opposed to the engineers and natural scientists who have dominated the previous generations of leadership.


Politburo Standing Committee member Xi Jinping at the National People’s Congress meeting in March

In 2012, only Vice President Xi Jinping and Vice Premier Li Keqiang will remain on the Politburo Standing Committee, the core decision-making body in China. Seven new members will join, assuming the number of total members remains at nine, which has been the case since 2002. All seven will hail from the broader Politburo and were born after October 1944, in accordance with an unwritten rule established under Deng requiring Chinese leaders to retire at age 70 (it was lowered to 68 in 1997). The retiring leaders will make every effort to strike a deal preventing the balance of power within the Politburo and the Politburo Standing Committee from tipping against them and their faction.

At present, China’s leaders divide roughly into two factions broadly defined as the populists and the elitists.

The populists are associated with Hu Jintao and the China Communist Youth League (CCYL) and are more accurately referred to as the “league faction” (in Chinese, the “tuanpai”). In the 1980s Hu led the league, which comprises his political base. The CCYL is a massive organization that prepares future members of the CPC. It is structured with a central leadership and provincial and local branches based in the country’s schools, workplaces, and social organizations. In keeping with the CCYL’s rigid hierarchy and doctrinal training, the policies of Hu’s “CCYL clique” focus on centralizing and consolidating power, maintaining social stability, and seeking to redistribute wealth to alleviate income disparities, regional differences, and social ills. The clique has grown increasingly powerful under Hu’s patronage. He has promoted people from CCYL backgrounds, some of whom he worked with during his term as a high-level leader in the group in the early 1980s, and has increased the number of CCYL-affiliated leaders in China’s provincial governments. Several top candidates for the Politburo Standing Committee in 2012 are part of this group, including Li Keqiang and Li Yuanchao, followed by Liu Yandong, Zhang Baoshun, Yuan Chunqing, Liu Qibao and Wang Yang.

The elitists are leaders associated with former President Jiang Zemin and his Shanghai clique. Their policies aim to maintain China’s rapid economic growth, with the coastal provinces unabashedly leading the way. They also promote economic restructuring to improve China’s international competitiveness and reduce inefficiencies, even at the risk of painful changes for some regions or sectors of society. The infamous “princelings” — or the sons, grandsons and relatives of the CPC’s founding fathers and previous leaders who have risen up the ranks of China’s system through these familial connections — are often associated with the elitists. The princelings are criticized for benefiting from nepotism, and some have suffered from low support in internal party elections. Still, they have name recognition from their proud Communist family histories, the finest educations and career experiences and access to personal networks set up by their fathers. The Shanghai clique and princelings are joined by economic reformists of various stripes who come from different backgrounds, mostly in the state apparatus such as the central or provincial bureaucracy and ministries, who often are technocrats and specialists. Prominent members of this faction eligible for the 2012 Politburo Standing Committee include Wang Qishan, Zhang Dejiang, Bo Xilai, Yu Zhengsheng and Zhang Gaoli.

The struggle between the populist and elitist factions is a subset of the deeper struggle in Chinese history between centralist and regionalist impulses. Because of China’s vast and diverse geography, China historically has required a strong central government, usually located on the North China Plain, to maintain political unity. But this cyclical unity tends to break down over time as different regions pursue their own interests and form relationships with the outside world that become more vital to them than unity with the rest of China. The tension between centralist and regionalist tendencies has given rise to the ancient struggle between the north (Beijing) and the south (Shanghai), the difficulties that successive Chinese regimes have had in subordinating the far south (i.e. Guangdong and the Pearl River Delta), and modern Beijing’s anxiety over the perceived threat of separatism from Taiwan, Xinjiang and Tibet. In this context, the struggle between the two dominant political factions appears as the 21st century political manifestation of the irresolvable struggle between the political center in Beijing and the other regions, whose economic vibrancy leads them to pursue their own ends. While Hu Jintao and his allies emphasize central control and redistributing regional wealth to create a more unified China, the followers of Jiang tend to emphasize the need to let China’s most competitive regions grow and prosper, often in cooperation with international partners, without being restrained by the center or weighed down by the less dynamic regions.

Factional Balance

The politicians almost certain to join the Politburo Standing Committee in 2012 appear to represent a balance between factional tendencies. The top two, Xi Jinping and Li Keqiang, are the youngest members of the current Politburo Standing Committee and are all but certain to become president and premier, respectively. Xi is a princeling — son of Xi Zhongxun, an early Communist revolutionary and deputy prime minister — and his leadership in Fujian, Zhejiang and Shanghai exemplifies the ability of coastal manufacturing provinces to enhance an official’s career. But Xi is also popular with the public, widely admired for his hardships as a rural worker during the Cultural Revolution. He is the best example of bridging both major factions — promoting economic reforms but seen as having the people’s best interests at heart. Li was trained as an economist under a prestigious teacher at Beijing University, received a law degree, and is a former top secretary of the CCYL and stalwart of Hu’s faction. Economics is his specialty, not in itself but as a means to social harmony. For example, he is famous for promoting further revitalization of northeastern China’s industrial rust belt of factories that have fallen into disrepair. Li also has held leadership positions in provinces like Henan, an agricultural province, and Liaoning, a heavy-industrial province, affording him a view of starkly different aspects of the national economy.

After Xi and Li, the most likely contenders for seats on the Politburo Standing Committee are Li Yuanchao, director of the CPC’s powerful organization department (CCYL clique), Wang Yang (CCYL), member of the CPC’s Politburo, Liu Yunshan (CCYL), director of the CPC’s propaganda department, and Vice Premier Wang Qishan (princeling/Jiang’s Shanghai clique). The next most likely candidates include Vice Premier Zhang Dejiang (Jiang’s Shanghai clique), Chongqing Party Secretary Bo Xilai (princeling), Tianjin Party Secretary Zhang Gaoli (Jiang’s Shanghai clique) and CPC General Office Director Ling Jihua (secretary to Hu Jintao, CCYL clique). It is impossible to predict exactly who will be appointed to the Politburo Standing Committee. The lineup is the result of intense negotiation between the current committee members, with the retiring members (everyone except Xi Jinping and Li Keqiang) wielding the most influence. Currently, of the nine Politburo Standing Committee members, as many as six are Jiang Zemin proteges, and they will push for their followers to prevent Hu from taking control of the committee.

It accordingly seems possible that the 2012 Politburo Standing Committee balance will lean slightly in favor of Jiang’s Shanghai clique and the princelings, given that Xi Jinping will hold the top seat, but that by numbers the factions will be evenly balanced. Like his predecessors, Xi will have to spend his early years as president attempting to consolidate power so he can put his followers in positions of influence and begin to shape the succeeding generation of leaders for the benefit of himself and his circle. An even balance, if it is reached, may not persist through the entire 10 years of the Xi and Li administration: the CCYL clique looks extremely well-situated for the 2017 reshuffle, at which point many of Jiang’s proteges will be too old to sit on the Politburo Standing Committee while a number of rising stars in the CCYL currently serving as provincial chiefs will be well-placed for promotion.

There is a remote possibility that the number of seats on the Politburo Standing Committee could be cut from nine to seven, the number of posts before 2002. This would likely result in a stricter enforcement of age limits in determining which leaders to promote, perhaps setting the cutoff age at 66 or 67 (instead of 68). Stricter age criteria could eliminate three contenders from Jiang’s Shanghai clique (Zhang Gaoli, Zhang Dejiang, and Shanghai Party Secretary Yu Zhengsheng) and one from Hu’s clique (Politburo member Liu Yandong). This would leave Bo Xilai (a highly popular princeling with unorthodox policies, but like Xi Jinping known to straddle the factional divide) and CPC General Office Director Ling Jihua (secretary to Hu Jintao, CCYL clique) as the most likely final additions to the Politburo Standing Committee. The overall balance in this scenario of slightly younger age requirements would then lean in favor of Hu’s clique.

Collective Rule

The factions are not so antagonistic that an intense power struggle is likely to rip them apart. Instead, they can be expected to exercise power by forging compromises. Leaders are chosen by their superiors through a process of careful negotiation to prevent an imbalance of one faction over another that could lead to purges or counterpurges. That balance looks as if it will roughly be maintained in the configuration of leaders in 2012. In terms of policymaking, powerful leaders will continue to debate deep policy disagreements behind closed doors. Through a process of intense negotiation, they will try to arrive at a party line and maintain it uniformly in public. Stark disagreements and fierce debates will echo through the statements of minor officials and academics, and in public discussions, newspaper editorials, and other venues, however. In extreme situations, these policy battles could lead to the ousting of officials who end up on the wrong side. But the highest party leaders will not contradict each other openly on matters of great significance unless a dire breakdown has occurred, as happened with fallen Shanghai Party Secretary Chen Liangyu.

That the fifth generation leadership appears in agreement on the state’s broadest economic and political goals, even if they differ on the means of achieving those goals, will be conducive to maintaining the factional balance. First, there is general agreement on the need to continue with China’s internationally oriented economic and structural reforms. These leaders spent the prime of their lives in the midst of China’s rapid economic transformation from a poor and isolated pariah state into an international industrial and commercial giant, and were the first to experience the benefits of this transformation. They also know that the CPC’s legitimacy has come to rest, in great part, on its ability to deliver greater economic opportunity and prosperity to the country — and that the greatest risk to the regime would likely come in the form of a shrinking or dislocated economy that causes massive unemployment. Therefore, for the most part they remain dedicated to continuing with market-oriented reform. They will do so gradually and carefully, however, and will not seek to intensify reformist efforts to the point of dramatically increasing the risk of social disruption. Needless to say, while the elitists can be energetic in their pursuit of economic liberalization, the populists tend to be more suspicious and more willing to re-centralize controls to avoid undesirable political side effects, even at the expense of long-term risks to the economy.

More fundamentally, all fifth generation leaders are committed to maintaining CPC rule. The chaos of the Cultural Revolution impressed upon the fifth generation a sense of the extreme dangers of China’s having allowed an autocratic ruler to dominate the decision-making process and intra-party struggle to run rampant. Subsequent events have reinforced the fear of internal divisions: the protest and military crackdown at Tiananmen Square in 1989, the threat of alternative movements exemplified by the Falun Gong protest in 1999, the general rise in social unrest throughout the economic boom of the 1990s and 2000s. More recent challenges have reinforced this, such as natural disasters like the Sichuan earthquake in 2008, ethnic violence and riots in Tibet in 2008 and Xinjiang in 2009, and the pressures of economic volatility since the global economic crisis of 2008. These events have underscored the need to maintain unity and stability in the Party ranks and in Chinese society, by force when necessary. So while the fifth generation is likely to agree on the need to continue with economic reform and perhaps even limited political reform, it will do so only insofar as it can without destabilizing socio-political order. It will delay, soften, undermine, or reverse reform to ensure stability. Once again, the difference between the factions lies in judging how best to preserve and bolster the regime.


Beyond the apparent balance of forces in the central party and government organs, there remains the tug-of-war between the central government in Beijing and the 33 provincial governments (not to mention Taiwan) — a reflection of the timeless struggle in China between center and periphery. If China is to be struck by deep destabilization under the watch of the fifth generation leaders (which is by no means impossible, especially given the economic troubles facing them), the odds are this would occur along regional lines. Stark differences have emerged, as China’s coastal manufacturing provinces have surged ahead while provinces in the interior, west and northeast have lagged. The CPC’s solution to this problem generally has been to redistribute wealth from the booming coast to the interior in hopes that subsidizing the less developed regions eventually will nurture economic development. In some instances, such as in Shaanxi or Sichuan provinces, urbanization and development have indeed accelerated in recent years. But overall, the interior remains weak and dependent on subsidies from Beijing.

The problem for China’s leadership is that the coastal provinces’ export-led model of growth that has worked well over the past three decades has begun to peak, and China’s annual double-digit growth rates are expected to slow due to weakening external demand, rising labor and material costs and other factors. The result will be louder demands from poor provinces and tighter fists in rich provinces — exposing and deepening competition, and in some cases leading to animosity between the regions.

More so than any previous generation, the fifth generation has extensive cross-regional career experience. This is because climbing to the top of Party and government has increasingly required that many of these leaders first serve in central organizations in Beijing and then do a stint (or more) as governor or Party secretary of one of the provinces (the more far-flung, the better), before returning to a higher central Party or government position in Beijing. Hu Jintao followed such a path, as have many of the aforementioned candidates for the Politburo Standing Committee. Moreover, it has become increasingly common to put officials in charge of a region other than the one from which they originally hailed to reduce regionalism and regional biases. This practice has precedent in China’s imperial history, when it was used to prevent the rise of mini-fiefdoms and the devolution of power. More of the likely members of the 2012 Politburo Standing Committee than ever before have experience as provincial chiefs. This means that when these leaders take over top national positions, they theoretically will have a better grasp of the realities facing the provinces they rule, and will be less likely to be beholden to a single regional constituency or support base. This could somewhat mitigate the central government’s difficulty in dealing with profound divergences of interest between the central and provincial governments.

But regional differences are grounded in fundamental, geographical and ethnic realities, and have become increasingly aggravated by the disproportionate benefits of China’s economic success. Temporary changes of position across the country have not prevented China’s leaders from forming lasting bonds with certain provinces to the neglect of others; and many politicians still have experience exclusively with the regional level of government, and none with the central. The patron-client system, by which Chinese officials give their loyalty to superiors in exchange for political perks or monetary rewards, remains ineradicable. Massive personal networks extend across party and government bureaus, from the center to the regions. Few central leaders remain impervious to the pull of these regional networks, and none can remain in power long if his or her regional power base or bases have been cut. The tension between the center and provinces will remain one of the greatest sources of stress on the central leadership as it negotiates national policy.

As with any novice political leadership, the fifth generation leaders will take office with little experience of what it means to be fully in charge of a nation. Provincial leadership experience has provided good preparation, but the individual members have yet to show signs of particularly strong national leadership capabilities. The public sees only a few of the upcoming members of the Politburo Standing Committee as successfully having taken charge during events of major importance (for instance, Xi Jinping’s response to Tropical Storm Bilis, Wang Qishan’s handling of the SARS epidemic and the Beijing Olympics); only one has military experience (Xi, and it is slight); and only a few of the others have shown independence or forcefulness in their leadership style (namely Wang Qishan and Bo Xilai). Because current Politburo Standing Committee members or previous leaders (like former President Jiang Zemin) will choose the future committee members after painstaking negotiations, this might preserve the balance of power between the cliques. It might also result in a “compromise” leadership — effectively one that would strive for a middle-of-the-road approach, even at the cost of achieving mediocre results. A collective leadership of these members, precariously balanced, runs the risk of falling into divisions when resolute and sustained effort is necessary, as is likely given the economic, social and foreign policy challenges that it will likely face during its tenure.

This by no means is to say the fifth generation is destined to be weak. Chinese leaders have a time-tested strategy of remaining reserved for as long as possible and not revealing their full strength until necessary. And China’s centralist political system generally entails quick implementation once the top leadership has made up its mind on a policy. Still, judging by available criteria, the fifth generation leaders are likely to be reactive, like the current administration. Where they are proactive, it will be on decisions pertaining to domestic security and social stability.

Military Leadership

The Rise of the People’s Liberation Army


Chinese soldiers at the World Expo 2010 in Shanghai

After Deng’s economic reforms, the Chinese military began to use its influence to get into industry and business. Over time, this evolved into a major role for the military on the local and provincial level. Military commands supplemented their government budget allocations with the proceeds from their business empires. Ultimately, the central government and Party leadership became concerned that the situation could degenerate into regional warlordism of the sort that has prevailed at various times in Chinese history — with military-political-business alliances developing more loyalty to their interests and foreign partners than to Beijing. Thus when Jiang launched full-scale reforms of the military in the 1990s, he called for restructuring and modernization (including cutting China’s bloated ground forces and boosting the other branches of service) and simultaneously ordered the military to stop dabbling in business. Though the commanders only begrudgingly complied at first, the military-controlled businesses eventually were liquidated and their assets sold (either at a bargain price to family members and cronies or at an inflated price to local governments). To replace this loss of revenue and redesign the military, the central government began increasing budgetary allocations focusing on acquiring new equipment, higher technology, and training and organization to promote professionalism. The modernization drive eventually gave the military a new sense of purpose and power and brought a greater role to the PLA Navy (PLAN), the PLA Air Force (PLAAF), and the Second Artillery Corps (the strategic missile corps).

The military’s influence appears highly likely to continue rising in the coming years for the following reasons:

Maintaining internal stability in China has resulted in several high-profile cases in which the armed forces played a critical role. Natural disasters such as massive flooding (1998, 2010) and earthquakes (especially in Sichuan in 2008) have required the military to provide relief and assistance, giving rise to more attention on military planning and thereby improving the military’s propaganda efforts and public image and prestige. Because China is prone to natural disasters and its environmental difficulties have worsened as its massive population and economy have put greater pressure on the landscape, the military is expected to continue playing a greater role in disaster relief, including by offering to help abroad. At the same time, the rising frequency of social unrest, including riots and ethnic violence in regions like Xinjiang and Tibet, has led to military involvement in such matters. As the trend of rising social unrest looks to continue in the coming years, so the military will be called upon to restore order, especially through the elite People’s Armed Police, which falls under the joint control of the Central Military Commission and State Council.

As China’s economy has become the second largest in the world, its international dependencies have increased. China depends on stable and secure supply lines to maintain imports of energy, raw materials, and components and exports of components and finished goods. Most of these commodities and merchandise are traded over sea, often through choke-points such as the straits of Hormuz and Malacca, making them vulnerable to interference from piracy, terrorism, conflicts between foreign states, or interdiction by navies hostile to China (i.e., the United States, India or Japan). Therefore it needs the PLAN to expand its capabilities and reach so as to secure these vital supplies — otherwise the economy would be exposed to potential shocks that could translate into social and political disturbances. This policy has also led the PLA to take a more active role in U.N. peacekeeping efforts and other international operations, expand integrated training and ties with foreign militaries, and build a hospital ship to begin military-led diplomacy.

Competition with foreign states is intensifying as China has become more powerful economically and internationally conspicuous. In addition to building capabilities to assert its sovereignty over Taiwan, China has become more aggressive in defending its sovereignty and territorial claims in its neighboring seas — especially in the South China Sea, which Beijing elevated in 2010 to a “core” national interest (along with sovereignty over Taiwan and Tibet) and also in the East China Sea. This assertiveness has led to rising tension with neighbors that have competing claims on potentially resource-rich territory in the seas, including Vietnam, the Philippines, Indonesia, Malaysia, Brunei and Japan. Moreover, Beijing’s newfound assertiveness has collided with U.S. moves to bulk up its alliances and partnerships in the region, which Beijing sees as a strategy aimed at constraining China’s rise.

China’s military modernization remains a primary national policy focus. Military modernization includes acquiring and developing advanced weaponry, improving information technology and communications, heightening capabilities on sea and in the air, and developing capabilities in new theaters such as cyberwarfare and outer space. It also entails improving Chinese forces’ mobility, rapid reaction, special operations forces and ability to conduct combined operations between different military services.

The PLA has become more vocal, making statements and issuing editorials in forums like the PLA Daily and, for the most part, receiving positive public responses. In many cases, military officers have voiced a nationalistic point of view shared by large portions of the public (though one prominent military officer, Liu Yazhou, a princeling and commissar at National Defense University, has used his standing to call for China to pursue Western-style democratic political reforms). Military officials can strike a more nationalist pose where politicians would have trouble due to consideration for foreign relations and the concern that nationalism is becoming an insuppressible force of its own.

Of course, a more influential military does not mean one that believes it is all-powerful. China will still try to avoid direct confrontation with the United States and its allies and maintain relations internationally given its national economic strategy and the fact that its military has not yet attained the same degree of sophistication and capability as its chief competitors. But the military’s growing influence is likely to encourage a more assertive China, especially in the face of heightened internal and external threats.

The Central Military Commission

The Central Military Commission (CMC) is the state’s most powerful military body, comprising the top ten military chiefs, and chaired by the country’s civilian leader. This means the CMC has unfettered access to the top Chinese leader, and can influence him through a more direct channel than through its small representation on the Politburo Standing Committee. Thus the CMC is not only the core decision-making body of the Chinese military, it is also the chief conduit through which the military can influence the civilian leadership.

Promotions for China’s top military leaders are based on the officer’s age, his current official position — for instance, whether he sits on the CMC or in the CPC Central Committee — and his personal connections. Officers born after 1944 will be too old for promotion since they will be 68 in 2012, past the de facto cutoff age after which an officer is no longer eligible for promotion to the CMC. Those officers meeting the age requirement and holding positions on the CMC, the CPC Central Committee, or a command position in one of China’s military services or its seven regional military commands (or the parallel posts for political commissars) may be eligible for promotion.

China’s paramount leader serves simultaneously as the president of the state, the general-secretary of the Party, and the chairman of the military commission, as Hu does. The top leader does not always hold all three positions, however: Jiang held onto his chair on the CMC for two years after his term as president ended in 2002. Since Hu did not become CMC chairman until 2004, it is not unlikely that he will maintain his chair until 2014, two years after he gives up his presidency and leadership of the party. But this is a reasonable assumption, not a settled fact, and some doubt Hu’s strength in resolving such questions in his favor.

Interestingly, Hu has not yet appointed Vice President Xi Jinping to be his successor on the CMC, sparking rumors over the past year about whether Hu is reluctant to give Xi the vice chairmanship or whether Xi’s position could be at risk. But Hu will almost certainly dub Xi his successor as chairman of the CMC soon, probably in October. Given the possibility that Hu could retain his CMC chairmanship till 2014, Xi’s influence over the military could remain subordinate to Hu’s until then, raising uncertainties about how Hu and Xi will interact with each other and with the military during this time. Otherwise, Xi will be expected to take over the top military post along with the top Party and state posts in 2012.

Old and New Trends

Of the leading military figures, there are several observable trends. Regional favoritism in recruitment and promotion remains a powerful force, and regions that have had the greatest representation on the CMC in the past will retain their prominent place: Shandong, Hebei, Henan, Shaanxi and Liaoning provinces, respectively, appear likely to remain the top regions represented by the new leadership, according to research by Cheng Li, a prominent Chinese scholar. These provinces are core to the CPC’s support base. There is considerably less representation in the upper officer corps from Shanghai, Guangdong, Sichuan, or the western regions, all of which are known for regionalism and are more likely to stand at variance with Beijing. (This is not to say that other provinces, Sichuan for instance, do not produce a large number of soldiers.)

One group of leaders, the princelings, are likely to take a much greater role in the CMC in 2012 than in the current CMC, in great part because these are the children or relatives of Communist Party revolutionary heroes and elites and were born during the 1940s-50s. Examples include the current naval commander and CMC member Wu Shengli, political commissar of the Second Artillery Corps Zhang Haiyang, and two deputy chiefs of the general staff, Ma Xiaotian and Zhang Qinsheng. In politics, the princelings are not necessarily a coherent faction with agreed-upon policy leanings. Though princeling loyalties are reinforced by familial ties and inherited from fathers, grandfathers and other relatives, they share similar elite backgrounds, their careers have benefited from these privileges, and they are viewed and treated as a single group by everyone else. In the military, the princelings are more likely to form a unified group capable of a coherent viewpoint, since the military is more rigidly hierarchical and personal ties are based on staunch loyalty. The strong princeling presence could constitute an interest group within the military leadership capable of pressing more forcefully for its interests than it would otherwise be able to do.

A marked difference in the upcoming CMC is the rising role of the PLAN, PLAAF and Second Artillery Corps, as against the traditionally dominant army. This development was made possible by the enlargement of the CMC in 2004, elevating the commanders of each of these non-army services to the CMC, and it is expected to hold in 2012. The army will remain the most influential service across the entire fifth generation military leadership, with the navy, air force, and missile corps following close behind. But crucially, in the 2012 CMC the army’s representation could decline relative to the other branches of service, since of the three members of the current CMC eligible to stay only one comes from the army (General Armaments Department Director Chang Wangquan) and many of the next-highest candidates also hail from other services. After all, missile capabilities and sea and air power are increasingly important as China focuses on the ability to secure its international supply chains and prevent greater foreign powers (namely the United States) from approaching too closely areas of strategic concern. The greater standing of the PLAN, PLAAF, and Second Artillery Corps is already showing signs of solidifying, since officers from these services used not to be guaranteed representation on the CMC but now appear to have a permanent place.

There is also a slight possibility that the two individuals chosen to be the CMC vice chairmen could both come from a background in military operations. Typically the two vice chairmen — the most powerful military leaders — are divided between one officer centered on military operations and another centered on political affairs. This ensures a civilian check on military leadership, with the political commissar supervising the military in normal times, and the military commander having ultimate authority during times of war. However, given the candidates available for the position, the precedent could be broken and the positions filled with officers who both come from a military operational background. Such a configuration in the CMC could result in higher emphasis on the capability and effectiveness of military rather than political solutions to problems and a CMC prone to bridle under CPC orders. But having two military affairs specialists in the vice chairmen seats is a slim possibility, and personnel are available from political offices to fill one of the vice chairmanships, thus preserving the traditional balance and CPC guidance over military affairs.

Civilian Leadership Maintained

The rising current of military power in the Chinese system could manifest in any number of ways. Sources tell STRATFOR that military officers who retire sooner than civilian leaders may start to take up civilian positions in the ministries or elsewhere in the state bureaucracy. Nevertheless, the overall arc of recent Chinese history has reinforced the model of civilian leadership over the military. The Communist Party retains control of the CMC, the central and provincial bureaucracies, the state-owned corporations and banks, mass organizations, and most of the media. Moreover, there does not appear to be a single military strongman who could lead a significant challenge to civilian leadership. So while the military’s sway is undoubtedly rising, and the upcoming civilian leadership could get caught in stalemate over policy, the military is not in a position to seize power. Rather, it is maneuvering to gain more influence within the system, adding another element of intrigue to the already tense bargaining structure that defines elite politics in China. But despite possible military-civilian frictions, the PLA will seek to preserve the regime, and to manage or suppress internal or external forces that could jeopardize that goal.

This analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today! "This report is republished with permission of STRATFOR"

© Copyright 2010 Stratfor. All rights reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.


© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in