China's New Leaders (Agenda)
Video Transcript:
Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, Stratfor cannot guarantee their complete accuracy.
Video Transcript:
Colin Chapman: China's new leader, Xi Jinping, seemed both calm and confident this week as he introduced his slimmed-down, all-male top team. But he made no bones about what he said were the many problems ahead for both the world's most populous country and the Communist Party. The aspirational messages were all there -- to stamp out corruption, improve the environment, discipline, hard work, prosperity for all, and what he termed socialism with Chinese characteristics.
Welcome to Agenda, I'm Colin Chapman. And I'm joined this week by Stratfor's Vice President of International Projects, Jennifer Richmond. Jen, let's look at the new Standing Committee of the Politburo. Where there any surprises here?
Jennifer Richmond: Actually, Colin, there really weren't any surprises. The lineup was pretty much as expected, and the number of committee members was cut down to seven. So now we have Xi Jinping, Li Keqiang, Zhang Dejiang, Yu Zhengsheng, Liu Yunshan, Wang Qishan and Zhang Gaoli. Now what is interesting about this is really not the people per say in the lineup but the way in which the lineup was introduce, which typically shows the rank of the Politburo Standing Committee. So we had Li Keqiang introduced second. Now he has pretty much been expected along with Xi Jinping to be top of the leadership. But officially, the premier is ranked third under the National People's Congress chairman. So putting him in the second position suggests that there were some balancing within the Party, especially given that Li Keqiang is considered to be the only solid Hu protege in this new line up. The other interesting thing is that Wang Qishan, who is known to be an economic fixer, was originally expected to get an economic portfolio. However, rumors suggested that he would get the head of the Central Commission for Discipline Inspection, the Party's watchdog. Yesterday we saw that he was confirmed in this position. This position is generally ranked last in the Politburo Standing Committee; however, he came out sixth, or in the penultimate position. And this suggests that the Party is giving both more authority to Wang himself as well as to the relevance of the CCDI as the anti-corruption drive is going to be a big focus for the new Standing Committee.
Colin: There were many who thought that outgoing Hu Jintao would continue to head up the Central Military Commission, but that's not going to happen. What should we take from this? Do you expect Hu to just fade away with no influence?
Jennifer: Well, given that Deng Xiaoping and Jiang Zemin both held onto this position this led to speculation that Hu Jintao would do the same. But really what this indicates it despite the continuity that we see in the Party and longstanding grooming of the leaders, this is not the case in the Central Military Commission, where there really is no set precedent. So although we do not see Hu Jintao necessarily fading away (after all he did appoint many of the generals onto the Central Military Commission) we do see him having some influence in the Party and in the military. However, Xi's appointment on to the Military Commission at this time allows him to better consolidate control. He also is known to have solid relationships in the military, which will help him to better navigate the relationship between both the Party and the military.
Colin: As in Hu's farewell message, corruption features strongly in Xi's speech. How will Li deal with it?
Jennifer: Truly tackling corruption is going to be difficult. Without both economic and political change. With Mao Zedong Thought enshrined in the constitution and the introduction of Hu Jinato's Scientific Development model now serving as a foundation of the Party, which is very heavily state centered, breaking the ties between large state-owned enterprises and the Party has been diminished. These ties are part responsible for corruption and rent seeking, and breaking these monopolies and privatizing SOEs will meet with vested interests that will seriously challenge the Party's ability to reform.
Colin: In defense talks in Australia, U.S. Secretary of State Hillary Clinton went out of her way to stress the U.S. wanted China as a friend. The entire region will benefit from the peaceful rise of China, she said. And then Australian Foreign Minister Bob Carr pointed out that the Communique contained no language of containment. Can we now look toward better relations?
Jennifer: Australia and the United States are committed to maintaining a balance of power in Asia Pacific and free transportation networks. Although neither see this as a tool of containment, China sees this pivot to Asia as exactly that. Further, even as reform is on the lips of many China analysts, this will not translate into territorial concessions on China's part. They still see the South China and the East China seas firmly within their sovereign interest. And it will remain a hot spot that continues to wax and wane depending on China's domestic political situation.
Colin: Jen, the fact that one or two reformers didn't make it to the Standing Committee has been interpreted by some as a setback for reform. Is this truly the case?
Jennifer: The talk of reform is genuine and the party knows that it needs reform. However, the ability to reform is almost insurmountable without both political and economic change. The large SOEs that are foundation to China's economy our entrenched in both its economic future as well as its political future. Party officials are tied to these SOEs and without their support, their political futures are uncertain. Take even the low profiled Zhang Gaoli. His career started with Sinopec, one of the largest state-owned petrochemical corporations, and he still is known to have ties to a lot of oil interests. This highlights the relationship between SOEs and the Party itself. Although we've seen plenty of infighting this year in the Chinese Communist Party, especially as the transition in leadership neared and the eruption of the Bo Xilai scandal, one thing that unites the party across all interest groups is the desire to maintain control. When faced with the task of reforming and breaking up vested interest, there's the fear of losing control that can paralyze even the most genuine reformers, none of whom made it to the current Standing Committee.
Colin: Jennifer Richmond, Stratfor's Vice President of International Projects. Thanks for watching Agenda. See you next time.
