Chinese President Xi Jinping is poised to take a third five-year term. Image: Agencies / Pool


 

Marx. Lenin. Mao. Deng. Xi.

Late last week in Beijing, the sixth plenum of the Chinese Communist Party adopted a historic resolution – only the third in its 100-year history – detailing major accomplishments and laying out a vision for the future.

Essentially, the resolution poses three questions. How did we get here? How come we were so successful? And what have we learned to make these successes long-lasting?

The importance of this resolution should not be underestimated. It imprints a major geopolitical fact: China is back. Big time. And doing it their way. No amount of fear and loathing deployed by the declining hegemon will alter this path.

The resolution will inevitably prompt quite a few misunderstandings. So allow me a little deconstruction, from the point of view of a gwailo who has lived between East and West for the past 27 years.

If we compare China’s 31 provinces with the 214 sovereign states that compose the “international community”, every Chinese region has experienced the fastest economic growth rates in the world.

Across the West, the lineaments of China’s notorious growth equation – without any historical parallel – have usually assumed the mantle of an unsolvable mystery.

Little Helmsman Deng Xiaoping’s ’s famous “crossing the river while feeling the stones”, described as the path to build “socialism with Chinese characteristics” may be the overarching vision. But the devil has always been in the details: how the Chinese applied – with a mix of prudence and audaciousness – every possible device to facilitate the transition towards a modern economy.

The – hybrid – result has been defined by a delightful oxymoron: “communist market economy.” Actually, that’s the perfect practical translation of Deng’s legendary “it doesn’t matter the color of the cat, as long as it catches mice.” And it was this oxymoron, in fact, that the new resolution passed in Beijing celebrated last week.

Made in China 2025

Mao and Deng have been exhaustively analyzed over the years. Let’s focus here on Papa Xi’s brand new bag.

Right after he was elevated to the apex of the party, Xi defined his unambiguous master plan: to accomplish the “Chinese dream”, or China’s “renaissance.” In this case, in political economy terms, “renaissance” meant to realign China to its rightful place in a history spanning at least three millennia: right at the center. Middle Kingdom, indeed.

Already during his first term Xi managed to imprint a new ideological framework. The Party – as in centralized power – should lead the economy towards what was rebranded as “the new era.” A reductionist formulation would be The State Strikes Back. In fact, it was way more complicated.

This was not merely a rehash of state-run economy standards. Nothing to do with a Maoist structure capturing large swathes of the economy. Xi embarked in what we could sum up as a quite original form of authoritarian state capitalism – where the state is simultaneously an actor and the arbiter of economic life.

Team Xi did learn a lot of lessons from the West, using mechanisms of regulation and supervision to check, for instance, the shadow banking sphere. Macroeconomically, the expansion of public debt in China was contained, and the extension of credit better supervised. It took only a few years for Beijing to be convinced that major financial sphere risks were under control.

China’s new economic groove was de facto announced in 2015 via “Made in China 2025”, reflecting the centralized ambition of reinforcing the civilization-state’s economic and technological independence. That would imply a serious reform of somewhat inefficient public companies – as some had become states within the state.

In tandem, there was a redesign of the “decisive role of the market” – with the emphasis that new riches would have to be at the disposal of China’s renaissance as its strategic interests – defined, of course, by the party.

So the new arrangement amounted to imprinting a “culture of results” into the public sector while associating the private sector to the pursuit of an overarching national ambition. How to pull it off? By facilitating the party’s role as general director and encouraging public-private partnerships.

The Chinese state disposes of immense means and resources that fit its ambition. Beijing made sure that these resources would be available for those companies that perfectly understood they were on a mission: to contribute to the advent of a “new era.”

Manual for power projection

There’s no question that China under Xi, in eight short years, was deeply transformed. Whatever the liberal West makes of it – hysteria about neo-Maoism included – from a Chinese point of view that’s absolutely irrelevant, and won’t derail the process.

What must be understood, by both the Global North and South, is the conceptual framework of the “Chinese dream”: Xi’s unshakeable ambition is that the renaissance of China will finally smash the memories of the “century of humiliation” for good.

Party discipline – the Chinese way – is really something to behold. The CCP is the only communist party on the planet that thanks to Deng has discovered the secret of amassing wealth.

And that brings us to Xi’s role enshrined as a great transformer, on the same conceptual level as Mao and Deng. He fully grasped how the state and the party created wealth: the next step is to use the party and wealth as instruments to be put at the service of China’s renaissance.

Nothing, not even a nuclear war, will deviate Xi and the Beijing leadership from this path. They even devised a mechanism – and a slogan – for the new power projection: the Belt and Road Initiative (BRI), originally One Belt, One Road (OBOR).

A mountain pass along the China-Pakistan Economic Corridor. Image: Facebook


 

In 2017, BRI was incorporated into the party statutes. Even considering the “lost in translation” angle, there’s no Westernized, linear definition for BRI.

BRI is deployed on many superimposed levels. It started with a series of investments facilitating the supply of commodities to China.

Then came investments in transport and connectivity infrastructure, with all their nodes and hubs such as Khorgos, at the Chinese-Kazakh border. The China-Pakistan Economic Corridor (CPEC), announced in 2013, symbolized the symbiosis of these two investment paths.

The next step was to transform logistical hubs into integrated economic zones – for instance as in HP based in Chongjing exporting its products via a BRI rail network to the Netherlands. Then came the Digital Silk Roads – from 5G to AI – and the Covid-linked Health Silk Roads.

What’s certain is that all these roads lead to Beijing. They work as much as economic corridors as soft power avenues, “selling” the Chinese way especially across the Global South.

Make Trade, Not War

Make Trade, Not War: that would be the motto of a Pax Sinica under Xi. The crucial aspect is that Beijing does not aim to replace Pax Americana, which always relied on the Pentagon’s variant of gunboat diplomacy.

The declaration subtly reinforced that Beijing is not interested in becoming a new hegemon. What matters above all is to remove any possible constraints that the outside world may impose over its own internal decisions, and especially over its unique political setup.

The West may embark on hysteria fits over anything – from Tibet and Hong Kong to Xinjiang and Taiwan. It won’t change a thing.

Concisely, this is how “socialism with Chinese characteristics” – a unique, always mutant economic system – arrived at the Covid-linked techno-feudalist era. But no one knows how long the system will last, and in which mutant form.

Corruption, debt – which tripled in ten years – political infighting – none of that has disappeared in China. To reach 5% annual growth, China would have to recover the growth in productivity comparable to those breakneck times in the 80s and 90s, but that will not happen because a decrease in growth is accompanied by a parallel decrease in productivity.

A final note on terminology. The CCP is always extremely precise. Xi’s two predecessors espoused “perspectives” or “visions.” Deng wrote “theory.” But only Mao was accredited with “thought.” The “new era” has now seen Xi, for all practical purposes, elevated to the status of “thought” – and part of the civilization-state’s constitution.

That’s why the party resolution last week in Beijing could be interpreted as the New Communist Manifesto. And its main author is, without a shadow of a doubt, Xi Jinping. Whether the manifesto will be the ideal road map for a wealthier, more educated and infinitely more complex society than in the times of Deng, all bets are off.