Book Review: CEO, CHINA – The Rise of Xi Jinping

This book is a measured analysis of the power matrix that Chinese President Xi Jinping has consolidated as he steers the nation from slowing export-dependent economy to boost domestic consumption and services – while defining a more muscular role for China on the global stage.

Author Kerry Brown is Professor of Chinese Studies and Director of the Lau China Institute at King’s College, London. He served as first secretary at the British Embassy in Beijing. Fluent in Chinese, he has authored 12 books on the post-1949 People’s Republic of China (PRC).

Locating power in China

Brown uses clear, concise language to explain the very opaque nature of power in China. Within the Party’s 87 million members, the power funnel narrows first to 3,000 elites, of vice-ministerial rank and above, who strut to the National People’s Congress every five years.

Real power resides elsewhere: The Central Committee of 205 full members and 171 alternates, meets once a year; the Politburo of 25 members meets once a month; the Politburo Standing Committee of 7 meets weekly. The General Secretary sets the agenda and runs the Politburo and its Standing Committee.

Xi Jinping is General Secretary of the Chinese Communist Party (CCP), Chairman of the Central Military Commission, and State President. All that makes him the “paramount leader” of the world’s most populous nation, with economic largesse and military heft, to deploy globally.

Chairman of Everything

What worries Xi’s comrades in the party is his amassing of cross-functional captainships in “Leading Groups” on economic reform, social reform, military reform and the internet, earning him the label “Chairman of Everything.” They fear a personality cult in the making, with the ghost of Mao hovering above.

Unaccountable monopoly power, had degenerated the Party into a circus of venal self-enrichers, unloved and widely resented. Xi is leading an anti-graft blitzkrieg through the 3,000 elite apparatchiks, at great risk. It facilitates the efficient removal of powerful individuals and factions, opposed to his reforms.

Victim of the Cultural Revolution

Like Deng, Xi suffered the dislocations of Mao’s capricious cruelty. His father, a comrade of Mao, was removed from office for allowing a literary work mentioning an enemy of the chairman. He was imprisoned during the Cultural Revolution and Xi, at fifteen, was “sent down” to rural China for seven years of “re-education.”

This personal experience of the CCP gone badly astray, triggering tragic suffering for ten horrific wasted years of the Cultural Revolution, has made Xi set on ridding the Party of parasitic officials, to restore its moral authority as the model standard bearer, of the ideals of a strong, prosperous and proud nation.

Brown explains in CEO, CHINA that Xi Jinping is very much a servant of the Party. Xi seeks to restore the Party’s standing, to uplift the Chinese people, and stake China’s right to global super-power status. His articulation of the “Chinese Dream” has a stirring, emotional, nationalistic appeal to all. Xi is nothing without the party.

The CCP, by design, is the only available governance structure, for the orderly management of China. If that backbone falls, the country has no substitute. Deng’s military response to the 1989 Tiananmen students, in part, was to block the nightmare of empowered teenage thugs, rampaging once again.

Reining in the SOEs

President Xi vexes about the “mandate-to-rule” of the CCP, as feverish growth from three decades of Deng’s economic reforms, led largely by State Owned Enterprises (SOEs) propelled “corruption with Chinese characteristics” along with excessive bad debt, over-investment in hard assets and inefficiencies.

Xi wants the bloated SOE sector trimmed and made efficient, transparent and accountable. SOEs contribute about half of state finances. Their powerful overlords routinely squirreled away vast wealth into offshore tax havens. The uncompromising anti-corruption drive, is mainly to end this heist. SOEs are the state’s ATM.

Middle-Class challenge

The peasant nation of Mao’s 1949 revolution has evolved, through the Deng economic reforms from 1978, sprouting an urbanized, educated, networked and active middle-class of consumers, who are central to the shift from export-led to domestic consumption and services growth.

In a decade, the urbanized population will reach 750 million, making up half the nation. As government will seek to raise personal taxes, Brown expects this middle class to demand a quid-pro-quo of rights and decision-making participation, in the classic “no taxation without representation” stand-off.

The navigation charts for the decade ahead are China 2030: Building a Modern, Harmonious & Creative Society report of the World Bank and the Development Research Centre of the State Council in 2012, and Xi’s 60-point statement in 2013 at the Third Plenum, beyond raw GDP targets, for market-led, sustainable growth.

Brown’s 260-page book is a handy guide to the enigma of Xi Jinping and the China he builds. Core components of Xi’s China Dream are reunification of Taiwan, effective command of the South and East China seas, and an extended geographic sphere of dominant influence, for Asia’s Big Power.