The Communist Party of China is Anxiously Searching for New Growth Paths

A crucial plenary session of the Central Committee of the Communist Party of China is being held this week and is expected to take decisions which will have far reaching implications for China and the world at large.

The plenum – the fifth of the current CC, the highest deliberative body of the party – comes three years into the term of Xi Jinping as president and has as one of the main tasks the finalisation of the country’s 13^th Five Year Plan (2016 – 2020) document. ‘While economic development will be the central task,” the politburo said in a statement announcing the plenum earlier this month, “a people-centric approach will be employed in the plan, with the development of people’s democracy, guarantees of social equity and justice through rule of law and encouragement for innovation’.

Whatever else the plenum achieves, the world at large will be hoping it is able to give a fillip to the growth path of the Chinese economy – whose slowdown has become a major source of worry internationally.

Apart from key economic policies, the plenum is looking at some essential organisational issues of the party too. For this purpose the CPC has adopted two documents – one, a revised regulation on clean governance and the other specifying actions for those who break party discipline. The former sets high standards for leading cadres while the latter specifically delineates behavioural norms for the party organisation consisting of over 87 million members. These documents are expected to uphold the principle that the party’s discipline is paramount and is stricter than the national laws.

Getting growth back on track

For the past few months, economic analysts all over the world have been closely observing the direction of the Chinese economy. Its sagging growth has given rise to alarm. Falling global commodity prices have given jitters to markets all around. Nearly two months back, when China decided to devalue the yuan by nearly two per cent, it sent shock waves around the world. This had resulted in world vide speculation of an impending ‘hard landing’ for the Chinese economy and wide fluctuations in major international bourses.

The latest figures released by China’s National Bureau of Statistics on October 19, 2015 reveals that even though the Chinese economy is the weakest it has been since 2009, it grew at 6.9% during the past three months of July to end September 2015 –  slightly better than the predicted worst case scenarios. These figures prompted one observer to note that the “underlying conditions are subdued but stable.” In other words, China will likely avoid an abrupt fall-off in growth and experience a ‘more gradual slide in activity stretching in to 2016’. The Chinese leadership understands the vital role of economic growth in the present day and they will do their best to maintain the momentum. This is a vital condition for their very survival and the continuing control of the party over the people of China.

During a speech last year President Xi admitted that “nevertheless we must be clear that our economy, though large in size, is not strong. Its growth, though fast, is not of high quality. The extensive development model featured by economic growth mainly driven by factor inputs such as natural resources is not sustainable.” Therefore, the effort of the Chinese leadership in the ongoing plenum is to aim at completing multiple transformations. The present day leadership will be looking for a sustainable growth pattern based on an economic growth model that relies on an enhanced and relatively better-oriented consumption pattern among large sections of the Chinese people. The current numbers of middle and upper middle classes in China must grow faster, in other words the distribution must be more even handed. Secondly, the shift to an innovation oriented society must be achieved faster.

Cementing the CPC’s legitimacy

Traditionally, the CPC believed that the party comes from the people, is rooted in the people, and serves the people. Of late, the upper echelons are worried about the alienation of the party from the masses. The party thrived on the basis of it flesh and blood relations with the masses. Hence, corruption becomes a major issue for the CPC leadership to tackle. After Xi Jinping took over in November 2012, he announced his intention to clean up the party and launched a nationwide “mass line” campaign –  mainly targeted at party functionaries and organs including the powerful People’s Liberation Army (PLA). Simultaneously the party started a nationwide movement against corruption and ostentation. In the beginning itself, Xi clarified that this anti-corruption drive would catch both ‘tigers and flies’, which meant both high level functionaries and low level employees. The campaign by and large followed this path; people of the status of politburo members all the way down to the ordinary party workers were investigated and action launched.

In the run up to the 93^rd anniversary of the party on July 1, 2015, the party organisation department called for putting a new emphasis on quality  over quantity in selecting members and expelled four “tigers”, or high-ranking officials, for corruption. In the first five months of this year, the Chinese authorities investigated 26,523 officials, including seven at the ministerial level, for crimes related to their duties, according to Xinhua. A total of 686 Chinese officials were named and shamed for violating frugality rules during the mid-autumn and national day holidays by the top anti-graft agency.  Among them, 66 were dismissed and 35 were expelled from the CPC, said a statement from the CPC Central Commission for Discipline Inspection. The most violations were excessive spending during holidays. Other violations, includes accepting gifts, the illegal use of public vehicles and extravagant celebrations.

The new formulation given by the politburo  is worth noting. To a large extent, party discipline is placed much above the constitution and the law of the land. This is coming at a time when the party and government are giving unprecedented significance and status to the state constitution and its machinery. However, by bringing in this new formulation, the party and its organisational set up is given prime of place. This gives further scope for the party and its “core” formed around Xi Jinping to become significant. His challenge is to successfully complete the task of achieving the economic success he plans during his tenure, which will come to an end by 2022. Hence the decisions of this week’s plenum need to be watched carefully.

From India’s standpoint, these changes in China, especially the direction of its economic reform and development, pose a challenge and an opportunity. How we make use of this opportunity depends upon the sagacity and adaptability of our policymakers at the top.

M.V. Rappai is an Honorary Fellow at the Institute of Chinese Studies, Delhi