Chinese elites gather strength for another „long march”

To say that Chinese society deviates from the patterns and structures known to us would be trivial. However, this is a necessary introduction to any considerations regarding the Chinese elite and its attitude towards any phenomenon or process. When it comes to its composition, perception of the world or understanding of the role it is to play in the state, the Chinese establishment is drastically different from the ideas shared by most Polish readers. The elites are aware that the current trade conflict is only an episode of long-lasting struggles with the West, and the Chinese are in for another „long march”.

Hermetic structure of the Chinese elites

In the socio-political realities of the People’s Republic of China (PRC), the elite with a real impact on state policy can only include a very small group of activists within the Communist Party of China (CPC) and those directly associated with them, usually through family ties or personal dependence. Therefore, unlike Western countries, the PRC establishment will include neither well-known scientists and artists nor journalists or businessmen. Even if they are members of the CPC, regardless of whether they are in the party of their own free will or had received an „offer they couldn’t refuse”, they have no say in politics. Their membership in the CPC is a prerequisite for personal success on the one hand, but also a guarantee of their obedience.

Of the approximately 90 million CPC members, only personnel activists, or roughly 7.5 million, are allowed in the party’s inner circle at various levels of the structure. Of that, at the central level, it is a relatively small group of 3-4 thousand people. These are primarily members of the Central Committee (CC) of the CPC (376 permanent members and deputies); also, the commanding staff of the People’s Liberation Army (PLA; from the provincial commander upwards), heads of approx. 100 major state-owned enterprises (both subordinated to the central government and to individual ministries and provincial authorities), members of the CPC committees of 31 provincial-level territorial units (except for special administrative regions of Hong Kong and Macau) and retired top-tier activists (the so-called party elders) together with their relatives who, although they hold no positions, control a plethora of nomenclature companies.

This relatively narrow group (in a country with officially 1.38 billion citizens) is divided internally, forming family-related party clans and sectoral interest groups. Their mutual relations, hidden behind the so-called Bamboo Curtain, despite looking like a monolith from the outside, actually create a dynamically changing network of competing interests, the centre of which is the CC CPC.

The party establishment, characterized by a fairly high homogeneity in the past, is subject to progressive differentiation due to economic reforms and socio-cultural changes that have been taking place for over 30 years. Paradoxically, it is slowly closing in on itself. It is becoming harder and harder to advance to it, and there is also an increasingly weaker turnaround between families belonging to the elite. For all that, there are common denominators between its members. One of them is the ambivalent attitude towards the West, whose basic feature is the contradiction between deep-rooted group thinking and individual perception.

The downfall of the West, the rise of China

As a whole, as a group separated from the rest of society, the elite sees the West, and above all the United States, as a threat or at best a challenge to the CPC and the state it has created. Meanwhile, for individual members of the establishment, the West is a „safe haven” where they can place capital and family members in case the tides turn and they are on the losing side of another plot. This applies to people from the middle tier of the party hierarchy, as well as to the tops of the apparatus themselves, whose assets located abroad were disclosed during the publication of the so-called Panama Papers.

Since the late 1990s, the Chinese elite has been increasingly convinced that the West is going through a crisis and that the gradual growth of the PRC is inevitable due to a sort of „historical necessity”. The highlight was the financial crisis in 2007 – until then the Chinese elites en masse saw the West as aggressive and hostile to the system they had created, but also competent, with an advantage. The crisis has triggered a change in the perception of relations with the West. Its weaknesses have also become noticeable.

The establishment has moved from a defensive attitude to an assertive, or even offensive, which is characterized by a belief that the CPC has created an alternative model for modernization to the Western one. There were even those who claimed that, with some modifications, it could be a model for other developing countries, definitely better than Western democracy. This was accompanied by the growing pride in the undisputed successes of the PRC, i.e. its economic development, lifting hundreds of millions of people out of poverty, and maintaining internal stability. Although the latter has been achieved with sheer force, this does not pose a moral dilemma for the elite; it is seen as a necessity for development and modernization.

One may state that there are voices that time is playing in China’s favor and that Beijing’s taking Washington’s place on the international stage is inevitable in the second half of the 21st century. However, the outbreak of the US trade war has crumbled this sense of well-being.

So the United States is not as weak?

The change of attitude towards the PRC in American politics began following the so-called third Taiwan crisis (1995-1996). It was a slow, gradual process, and has remained unnoticed by many. It was made manifest, among others, by the so-called Hainan incident in 2001, when a Chinese fighter plane and an American spy plane collided. The course against the PRC was slowed down for a time by 9/11; however, in 2005, despite the ongoing war on terror, a major relocation of the US Navy to the Pacific occurred. In 2008, Washington joined talks on the Trans-Pacific Partnership (TPP), which, under its influence, became a project aimed at the economic isolation of the PRC. Finally, in 2012, Barack Obama initiated the Asia Pivot in foreign policy, which was a clear declaration that the US would not be passively watching Chinese ambitions.

The Chinese establishment viewed these activities with concern and over the years undertook counter-measures – expanded its navy and concluded several trade agreements with the countries in the region. Nevertheless, Donald Trump’s policy, including a drastic change in the attitude of the American elite to the PRC and the outbreak of a trade war, took Chinese leaders by surprise. This was largely due to the belief that the US is weakening and that the entropy of the American political system will mean that Washington will not have the strength and opportunity to implement an effective policy to stop China’s growth. This assessment was also strongly influenced by the fact that many of Russia’s aggressive actions have been met with minimal response from the West over the years. Generally, American initiatives in Asia were considered an obstacle, but one that is unable to stop the trend in the long run.

Moreover, apart from anti-Chinese rhetoric during the election campaign, the beginning of Trump’s presidency seemed favourable to China. Reluctant to free trade agreements, the president decided to leave the TPP. Combined with Trump’s unfavourable media image, this was part of the „downfall of the West” narrative accepted by the Chinese elite.

As early as the first half of 2018, Trump was thought to be content with more US purchases of such products as corn, soybeans and liquefied gas, which is why the speed and aggressiveness of the US administration, and above all the far-reaching demands for a real cessation of unfair trading practices, were a real shock to the Chinese establishment.

Withdraw or regroup?

The situation assessment of individual members of the establishment largely depends on their position in the hierarchy and role in making current decisions. Despite everything, one can find several dominant threads in the internal discussion, whose echoes reach an international public opinion.

First of all, it seems that the prevailing opinion is that the Deng Xiaoping’s doctrine „Hide your strength, take your time” was abandoned all too soon. Adopting a more assertive international policy too early supposedly drew Washington’s attention (primarily the „Belt and Road Initiative” and the „Made in China 2025” program). Some observers believe that part of the elite blames it on CPC Secretary-General, Xi Jinping. This, however, seems to be an over-interpretation. Changing the foreign policy was a collective decision that was made before Xi Jinping assumed the leadership role in 2012. Hu Jintao, Xi Jinping’s predecessor, signalled the change in 2009, saying that „foreign policy must strive for achievements.” If we are now observing instrumental play on this issue, this concerns the creation of support for a particular direction in economic policy. At the same time, the elites are aware that there is no more going back to Deng’s model, both economically and in international politics. Therefore, the main dispute concerns the direction of further actions.

In this light, the trade war is perceived by some of the establishment, which is inclined to economic liberalism (this does not in any way support the easing of the political regime) as an opportunity to carry out the necessary but delayed change in the development model. The elites in an authoritarian state are conservative by nature, which is culturally reinforced in China. This means that the reform effort is only undertaken in critical situations as the last possible course of action. That is why some activists believe that the trade war will give the necessary impetus for reform.

One needs to remember, however, that most advocates for reform treat it instrumentally. They represent those interest groups and state-owned enterprises that can benefit the most from changes in economic policy. Understandably, there is opposition from the part of the elite that may lose the most. They push for using the conflict to restore the state’s dominant role in the economy and to double internal investments, especially in less developed provinces in the interior. They also reject any real concessions to the US. These currently seem to be mostly supporters of the second option.

However, despite differences as to how to respond to Trump’s actions, there is a consensus that the trade war revealed the PRC’s technological dependence on the West. Hence the increased investments in research and development programs as well as political and financial support (through state-owned banks) for companies from the new technologies sector. This is also accompanied by doubling the efforts aimed at acquiring technology abroad, whether through acquisitions of foreign companies or industrial espionage.

There seems to be a consensus on increasing social and political control. The establishment is aware that the current trade conflict is only an episode of long-lasting struggles with the West. In May this year, Xi Jinping has warned the elites that „they are beginning a new long march”. The trade war and the expected economic crisis raise the establishment’s concerns as to maintaining internal order. Hence the elites’ full consent to not only increase the system’s repressiveness towards ordinary citizens but also to continue the anti-corruption campaign aimed at clearing the party apparatus of „uncertain elements” and the „renaissance” of mass political indoctrination.

Even if an agreement is reached in the trade war, which the PRC needs, it will merely be a ceasefire. Chinese elites are unlikely to want to implement that. They only need time to gather their strength.

Polish version is available here.