The future of the Chinese Communist Party

Ian Bremmer's Quick Take:

Hi everybody. Ian Bremmer here. Happy Monday. Starting to bake in New York City in the summertime, but glad for it, given the alternatives.

And I thought I would talk a little bit about the 100th anniversary of the Chinese Communist Party. Big speech coming up from President Xi Jinping, a big historic plenary for the party. Already, a big meeting by Xi and a number of the senior leaders just a week ago at the new Museum of the Communist Party of China in Beijing, reaffirmation of loyalty oaths to the party. At a time when Communist party membership, which had been flattening over previous years, is now growing in a robust way. Again, you've got almost a 100 million members of the Communist party across China and it's hard to get in. Only about 10% of applicants actually are accepted. It is increasingly seen as a way to be successful in core state-owned enterprises, opportunity, political access, economic access, you name it. If you're a young elite and you want to make a difference in China, having a party membership card and being seen to be loyal and having behaviors that are befitting a Communist party member are increasingly important.

That's an interesting development. Precisely because I remember when I used to study the Soviet Union, there was such profound sense of they pretend to pay us, we pretend to work. Everyone gave lip service to the system, but the system was incredibly and profoundly inefficient. Now it is certainly true that state-owned enterprises in China are less profitable and less efficient in deployment of capital and productivity than the private sector in China is. And yet, we are seeing with authoritarian surveillance, that the ability of the Chinese government to align individual citizens' behavior with what is considered patriotic goes so much more deeply into day-to-day living than it ever could have in the Soviet Union.

And this is something I think that is creating much more confidence on the part of the communist party, that they're getting it right, that their system works. And certainly, coming out of the pandemic faster than other major countries in the world, even though it started in China, even though they covered up the original human to human transmission. The fact that they could engage in surveillance and lockdowns that allowed the economy to get back up and running, over a year ago at this point, well ahead of that of the United States, of Europe, of other countries in the world, is providing a lot of optimism and enthusiasm that 100 years on, the Chinese Communist Party is not just robust, but it's actually a system increasingly to be emulated.

And in this regard, it was really interesting to see this new state council white paper that just came out on the party's 100-year quest for human rights protection as they call it. It's an important theme that I suspect we will see mentioned by President Xi in his upcoming speech as a General Secretary of the Communist Party. And we're increasingly seeing numbers of high-level officials calling for China to share its governance model internationally because it's so successful. Something that we have not seen from China historically. And that's one of the things I'm going to find most important about the events of the coming week, is whether or not we end up in a greater ideological confrontation as opposed to just an economic or technological one. Which is what we've seen of course from the US and China intensifying, but nonetheless limited over the course of the past years.

So I think that if you're looking at this from China's perspective, your saying we've had extraordinary economic growth, our political system is very consolidated, the West doesn't really know what it stands for. Coming out of the pandemic, we feel good about where we stand. Issues like Hong Kong, the Uyghurs, Taiwan, which are extremely controversial and leading to a lot of criticism, rightfully in my view, from the United States and other democracies. Inside mainland China, the average Chinese citizen actually is very aligned with what the Chinese government is saying. And that's not only because they control the media. I mean, if you look at the treatment of the Uyghurs and the fact that their rights have been stripped away, and there's been forcible cultural assimilation, integration, antinatalist policies of late, even sterilizations. And of course, these reeducation camps with over a million Uyghurs in place.

The average Chinese, and I've spoken to a lot of Chinese citizens about this, say this is a group that had radicals in their midst. They would engage in irredentist sentiment to break up mainland China. They had a secessionist movement, they supported terrorism, there was violence against Chinese citizens, and we needed to react. And how was the reaction where you have those reactions, there's clearly going to be, if you want to make an omelet, you're going to break some eggs. Of course, there were probably people that were caught up in all of this. But ultimately there's no longer threat from the Uyghurs to China. And how is that different from what the Americans did say after 9/11? How's it different from Guantanamo Bay? I would argue it's quite different in the sense that the scale is staggering, it's happening inside Chinese territory. But again, it's important to understand that from the perspective of Chinese citizens, it is seen as a legitimate Chinese government response. So I think the first big point is we think about the 100th Communist Party plenum is just how strong Chinese domestic patriotism presently is.

There's two other points I would mention. There's also the lionization of Xi Jinping himself. If you look at the official textbooks on the history of the Communist Party, Xi has personally been elevated well beyond that of any leader since Mao. And there's increasingly a white washing of the cultural revolution. There is increasingly this sense that the Great Leap Forward, which was a policy disaster inside China of the level of those we saw with the Great Famine under Stalin, is now something that you really can't criticize anymore. So this sense that history should be rewritten to support the domestic victors, something that is downright Orwellian, but is increasing the table stakes inside China is something I find disturbing. Not only because I think it's bad for the harmonious rise of Chinese society over time, but also because it will lead to more confrontation between China and those of other countries around the world that have a broader and more or open policy debate and media debate and political debate.

And then finally, there's the question of, to what extent China's next five, 10 years are going to be as easy to continue to grow as we've seen over the course of the last 50. 100 years you can't really use that as a benchmark because before China started globalizing, there was much more profound difficulty inside China. It was a low-income country with massive human depredation and war. But when I see where China is heading in the next 10 years compared to the last 50, it feels like there is a lot more winds of change against China's progress.

What do I mean by that? Well, the last 50 years, China was interested in integrating more into the global economy. It embraced globalization. At the same time, the West, the United States and allies, wanted China to integrate into the WTO, integrate into a global supply chain where China was increasingly the factory for low-cost labor and goods to export all over the world. And both of those things rowing in harmony made it so much easier for China to grow, on average, almost double digits over the course of the last 30, 40 years. Unprecedented in the history of humanity for an economy of that scale.

Now, as I think about the coming five, 10 years, neither of those two things apply. Globalization is starting to turn inward, low-cost labor no longer so low cost in China. The United States focusing more on industrial policy, on insourcing, on supporting American labor. Not on China being the factory of the world. So the massive advantage that China had is not only less of an advantage in a post-industrial revolution, but also the West is increasingly not aligned with China's integration and economic success. Now, there certainly are actors in the West that are very aligned with it. There's a big difference between a lot of American corporates that are still betting more and more over time on China's economy than the US government and many allied governments in the Quad, in Asia, the UK, many Europeans in Europe. But still, structurally, this is going to be a lot harder for China going forward.

And the fact that the five-year plan is now all about dual circulation, which is focused more on Chinese demand and focused more on Chinese control of supply chain is the opposite of what China was able to prioritize to get to the economic power that it presently accumulates. The fact that that is happening in an environment where Chinese demographics are more constrained and Chinese debt is growing to levels that have been unsustainable for middle income economies over the course of the last 50 years, for me, makes the risks to China in the next five, 10 years skew more to the downside than the upside. A lot of uncertainty, but as I'm thinking about how to assess Xi Jinping's big plenary speech coming up this week, that's what I'm thinking about.

So a few macro thoughts on where China is where China's going on this 100th anniversary of the founding of the Chinese Communist Party, something a lot to think about and all sorts of stuff to follow. So hope everyone's doing well, be safe, avoid fewer people and I'll talk to you real soon.

"I knew that history was my life's calling."

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