China Stumbles Toward Leadership Transition

After a year of turmoil, the Communist Party will convene its 18th Congress on November 8th in Beijing. If all goes according to plan, 2,270 delegates will elect a new Central Committee. 

On the day following the close of the Congress, the new Central Committee will convene the First Plenum to appoint the next leadership, specifically a new Politburo, Central Military Commission, and Secretariat. All eyes will be on who steps out from behind the curtain—literally—as the new Politburo Standing Committee is unveiled. Analysts universally believe the first person to appear will be Vice President Xi Jinping. That will mean he is the party’s new general secretary, the leader of China.

This leadership transition, from the so-called Fourth Generation to the Fifth, was supposed to be uneventful, predictable even. According to the accepted view, the Communist Party had institutionalized its politics with rules, guidelines, practices, and limits. Even critics of the regime accepted this storyline. 

A year ago, America’s messy, divisive, and noisy politics were sometimes compared—unfavorably—with the orderly Chinese transfer of power. Yet this has turned out to be a tumultuous year for the party, beginning with the early-February confrontation around the American consulate in Chengdu, a bizarre incident that appears to have been triggered by the political struggle between Hu Jintao, the current leader, and Bo Xilai, then China’s most charismatic and openly ambitious politician. Bo has since been detained and will soon stand trial, perhaps for one or more capital crimes.

Since February, there has been intense infighting at the top of the Communist Party, and much of this has been playing out in public. There has been an ever-widening drama of ambition, corruption, intrigue, lust, murder, and treason. In recent months, officials have been purged, businessmen arrested, and military officers reprimanded. There have been two sets of rumors of attempted military takeovers. In March, Premier Wen Jiabao issued a public warning that the country could descend into another Cultural Revolution.

At the time, Wen’s dire warning sounded to some like an exaggeration, but the new leadership then and now faces unprecedented challenges. The economy is faltering, the authority of the central government is eroding, the military is breaking free of civilian control, and the Chinese people are losing their fear. In Beijing, the disgruntled are defacing traffic signs with subversive slogans such as “Strike Down the Communist Party.” China is a volatile society, changing faster than could have been imagined just months ago.

The party’s problems are by no means insurmountable, but the organization has lost its self-assurance at a crucial juncture. The series of sensational and lurid events this year has delegitimized its rule, and now even its second-tier leaders are openly questioning its direction. Qiushi, the top Communist theoretical journal in China, in the middle of this month published an article essentially maintaining that the party would die if it did not embark on political reform.

China’s unreformed system has obviously become a kleptocracy. Last week, the New York Times reported that the family of Premier Wen had accumulated assets worth at least $2.7 billion. These revelations, undermining the current head of China’s government, follow Bloomberg’s groundbreaking reporting at the end of June on the wealth of Xi Jinping’s family. 

Perhaps Chinese leaders are grabbing all they can because they know their system cannot sustain itself. There is an end-of-regime feel to China at the moment, something evident from the party’s desperate-looking efforts to prevent its officials from running away. Last month, the organization established a “Command Group to Fight Against Communist Officials and Government Employees Fleeing the Country” to be headed by Wen Jiabao’s successor as premier, Li Keqiang.

As the party tries to stabilize itself, Chinese citizens and businesses are taking their money out of the country. Global Financial Integrity, the Washington-based watchdog, this month released a report (pdf) estimating that last year there were $602.9 billion in illicit transfers out of China, a part of the $1.05 trillion that left the country that year and in 2010.

Many Chinese, we can see, no longer believe in China.

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