Political Distraction – China Style

 

When Chinese leader Deng Xiaoping took the reins in 1981, China made a rapid acceleration into a modern economic world. “Some must get rich first,” said Deng as he noted that his predecessor – Mao Zedong – glossed over what Deng called a necessary interim step from basic feudalism to communism (which I define as “socialism by force”): some form of capitalism. With the autocracy intact, China only took three decades to lift one billion people out of dire poverty. As shinny architectural high rises, chichi shops, superhighways crowded with a global panoply of cars and fine dinning became common in China’s biggest cities, someone asked Deng’s successor, Jiang Zemin, how China could call itself a communist country in light of what appeared to be vast super-capitalism? Perhaps leaning on a Chinese notion of the “harmony of opposites,” he replied, “Communism is what we say it is.”

Privileged classes with deep connections to the autocratic political elite, entrepreneurs exploiting a system with wide open opportunities, always kept a careful eye on China’s political reality. These super-successful-mega-capitalists were always members of the Communist Party. 80% of the major companies in the nation wore a “red hat” (with direct Party or government ownership or significant board control). The Party was very much in control. Corruption was a way of life, even as annually tens of thousands found themselves in People’s Republic of China prisons, some facing execution, for that common crime. But those at the top were protected by the Party… unless they became an embarrassment or offended leaders at the top.

China’s growth pushed it to the point where it was clear that its GDP would make it the largest economy in the world, surpassing the United States within the near future. Hardly a free society, China was seemingly free of the unlimited rule of a doctrinaire autocrat. The prospect of a “cult of personality” – the legacy of Chairman Mao – was mitigated by a powerful military, the enhanced status of the Standing Committee at the top of the Politburo and, most of all, a limited single term of ten years. And then came Xi Jinping, elected (anointed) Communist Party General Secretary in 2012 and President in 2013.

Xi reconfigured (contracted) the Standing Committee to suit his needs and spent his initial years atop the nation purging critics and potential opponents (often eliminated under corruption laws). The big boys were deposed “tigers,” the small fry were labeled “flies.”  Xi seemed determined to push China back to a stricter and more repressive policy that was beginning to resemble a wealthier nation with a Mao-like singular vision under one man’s control. A “New Era” of “socialism with Chinese characteristics,” as the Politburo succumbed (in 2018) to Xi’s demand to eliminate the requirement of a single 10-year term. A new personality cult was in full sway.

“Under Xi’s leadership China was increasingly assertive in international affairs, insisting upon its claim of territorial sovereignty over nearly all of the South China Sea despite an adverse ruling by the Permanent Court of Arbitration in The Hague and promoting its ‘One Belt, One Road’ initiative for joint trade, infrastructure, and development projects with East Asian, Central Asian, and European countries.” Encyclopedia Britannica.  

A new uniformity of acceptable culture and expression gripped the nation. Xi crushed Muslim Uighurs in the west and, ignoring his treaty commitment with the UK, dramatically eliminated freedom of speech in Hong Kong. There was now one vision, one language, one philosophy and one dear and cherish leader throughout China. Xi eyed Taiwan’s desire for continued independence from the PRC with increasing hostility. It would be formally united as an integral PRC territory, he pledged.

As China’s standard of living rose, its labor costs became less competitive. China shifted its economic policies to prioritize technology-based industries, the more sophisticated the better, even if that mean escalating the theft of valuable intellectual property anywhere China could find it. Donald Trump, at first attempting a bromance with Xi, found himself in a trade war with China. Tariffs rose. PRC businesses in the United States were investigated and limited. China retaliated against US companies operating in China while cutting back on its massive dependence on American agricultural imports to the consternation of Midwest American farmers. It was clear that China would never again rely on the US as its agricultural mainstay, now an “unreliable” exporter of foodstuffs subject to shifting political whims.

The pandemic slammed into China in so many ways. Trump amped up the blame game calling COVID-19 the “Kung Flu” and accusing a Chinese laboratory in Wuhan as being the source of the virus. The rising and falling patterns of infection roiled through every corner of China, slowing the PRC economy to a crawl not seen since the Mao era. The election of Joe Biden added a ray of hope to the Chinese leadership, and everyone was acutely aware that tackling climate change could not be done without China’s very active participation. Yet only a feeble Biden-Xi dialogue began, amidst China’s human rights abuses and her aggressive entré into the South China Sea. Sino-American relations remained strained at best, hitting their lowest point in the modern era.

This double economic slam – from the pandemic to the trade wars – threatened a generally accepted notion in the PRC: The people would tolerate autocratic rule as long as their economic well-being was improving. Not that there would be a violent revolution against Xi… but his autocratic hold would lose support, from bottom to top. Xi was quite aware of this unwritten edict.

Was it time for a symbolic effort, a show for the people that China’s infamous wealth gap was being addressed? Mimicking a Trumpian proclivity to find people to blame for his failings? Signs of destabilization are growing everywhere. One falling giant was big enough to pull the global stock market down with it (the Dow dropped 1.7%, the worst fall since May, on September 20th). Evergrande, one of China’s largest property developers — now was staggering under more than $300 billion in debt and potential collapse. Dozens of small vendors, including more than a few employees, gathered at the company’s massive headquarters in Shenzhen with vociferous demands against Evergrande’s defaults. But the highly visible entertainment industry was too tempting for blame-seeking Xi. 68-year-old Xi has initiated a crackdown on the superrich and what many believe are overly visible mega-wealthy celebrities from the entertainment world.

Governmental agencies cooperated in formulating Xi’s new plan of enforced economic modesty. Alice Su, writing for the September 16th Los Angeles Times, explains this new attempt by Xi to salve economic wounds and purge cultural impurities: “Celebrity names are vanishing from the credits of TV shows. Effeminate male idols — ‘sissy boys’ — have been vilified. Tech moguls have been urged to donate billions of dollars to philanthropy. And kids went back to school last week with new rules banning foreign textbooks and requiring more classes on the ideology of leader Xi Jinping.

“‘The changes are part of Xi’s new ‘common prosperity’ campaign to narrow the gap between rich and poor and create ‘material and spiritual wealth.’… It’s a noble-sounding slogan. But it looks more like a top-down purification than a strategy for economic reform. Xi is fixed on purging society of greed, corruption and moral failings he views as threats to socialism. Freewheeling capitalists and Western influences have become targets, while structural issues such as bloated state-owned companies and a weak social safety net are left unaddressed.

“‘That has raised questions about whether common prosperity is less a design to reduce inequality than a way to concentrate political power and ideological control while blaming the rich and famous for the nation’s ills.

“‘Over the last month, Xi has cracked down on tech, education and entertainment. He has called for corporations and wealthy individuals to ‘give back more to society’ at a time when the Communist Party is under pressure as the economy cools… Tech titans have scrambled to respond. Tencent and Alibaba have each pledged more than $15.5 billion to ‘common prosperity’ initiatives. The founders of ByteDance, Pinduoduo and Xiaomi have also donated millions to charity.

“Entertainers and entrepreneurs have attracted cult followings in China over the last few decades as their wealth burgeoned along with the country’s rapid growth. Bookstores sold stacks of memoirs by tech billionaires who preached a gospel of self-made success. Alibaba co-founder Jack Ma opened an elite academy to cultivate entrepreneurs…

“The National Radio and Television Administration has released an eight-point plan to purge the entertainment sector of celebrities of ‘fake, ugly and evil values.’… Entertainers should not use their fame for profit or be well paid, the plan said. They should promote traditional culture and ‘establish a correct beauty standard,’ it said, singling out ‘sissy idols,’ or men who wear makeup or act feminine, as a particular offense.” Famous actors and cultist business leaders have simply disappeared from view. Is Xi a cornered cat fighting back or simply escalating his dominion and control of the most populous nation on earth? Time will tell.

I’m Peter Dekom, and is PRC President Xi a reincarnation of the brutal autocratic era of Chairman Mao or is he simply running scared?