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From left, Chinese President Xi Jinping and Politburo members Chen Min'er and Hu Chunhua.
China up close

Xi toys with leadership reshuffle at party conclave

Promoting next-gen leaders at long-delayed meeting one way to blunt criticism

KATSUJI NAKAZAWA, Nikkei senior staff writer | China

TOKYO -- When China announced its growth numbers for the July-September quarter earlier this month, U.S. President Donald Trump pounced.

"I don't think it's 6," Trump said at an Oct. 21 cabinet meeting, only days after Beijing's announcement of 6% real growth in gross domestic product. "I think it's probably minus-something. It could very well be minus. It could very well be in negative territory."

The 6% growth was the slowest in data going back 27 years. But Trump said that "China is doing very poorly -- worst year they've had in 57 years."

It is not quite clear what data he was referring to. American media largely ignored the words of the freewheeling president.

If Trump was actually correct, then China's current economic plight is the most serious since the mass starvation under Mao Zedong's Great Leap Forward program of the late 1950s and early '60s.

Comparing today's economy against half a century ago is unreasonable, given the size difference. Trump also must have been playing for the upper hand in the ongoing trade talks with Beijing.

But a statement by the U.S. president at a cabinet meeting, reading from notes in front of him, cannot simply be dismissed as groundless and nonsense.

U.S. President Donald Trump speaks at a cabinet meeting at the White House on Oct. 21. Trump openly questioned whether China's economic growth was really 6% for the July-September quarter.    © Reuters

In fact, there have been similar views within China regarding the true strength of the economy.

Internal research by an important institution estimated economic growth in 2018 at as low as 1.67%, outspoken Renmin University of China academic Xiang Songzuo said in a lecture late last year. Some people were even estimating negative growth, Xiang noted.

This time around, Xiang raised questions about the July-September numbers, based on tax revenue and other economic activity he was watching, putting him largely in line with Trump's remarks.

Why are Chinese growth figures so padded? "It's for marginal bureaucrats to please their [local] leaders, their direct bosses," an expert lamented.

This Chinese expert then proposed: "If only they used blockchain technology to calculate economic performance, the nefarious act of padding could be prevented altogether."

But blockchain, which is said to make data falsification impossible, has not yet been applied to the task. China's refusal to adopt it may seem odd for a digitally advanced country.

Leaving room for officials to make "flexible" adjustments for their own purposes may be the reason.

With the truth about the economy becoming clouded in fog, the long-delayed fourth plenary session of the 19th Central Committee finally kicked off Monday in Beijing, starting the autumn political season.

It marked the first time since the Deng Xiaoping era that a plenary session -- an important meeting of 200-plus full members and 170-odd alternate, or candidate, members of the elite committee -- had not been convened for as long as one year and eight months.

The Great Hall of the People in Beijing. More than 200 full members and 170-odd alternate, or candidate, members of the Chinese Communist Party Central Committee are gathering in Beijing for the fourth plenary session. (Photo by Akira Kodaka)

Xi is believed to have held off on convening the meeting to avoid criticism over the surprise March 2018 constitutional revision that scrapped the limit of two five-year terms for Chinese presidents, paving the way for him to remain president for life.

The Communist Party has a long-standing tradition of promoting successor candidates to the Politburo Standing Committee, its top decision-making body, years in advance and grooming them. Xi's decision to skip the process at the party's last national congress back in 2017 and promote no one from the next generation has faced persistent backlash within the party.

On top of the controversial changes to the constitution, Xi also needed to pay attention to a mountain of issues, including weaker economic momentum, deteriorating relations with the U.S., and continuing unrest in Hong Kong. He needed to play it safe.

In a further sign of safe driving, the fourth plenary session broke with tradition and chose to keep the economy off the main agenda.

Instead, the two main themes chosen were to "uphold and improve the system of socialism with Chinese characteristics" and to "advance the modernization of China's system and capacity for governance."

The second is code for "to strengthen top-down decision-making by Xi."

When Vice President Wang Qishan visited Japan for Emperor Naruhito's enthronement ceremony, Chinese state media also used "top-down" to describe what was said when Wang met with Japanese Prime Minister Shinzo Abe.

Wang was a driving force behind efforts to crush Xi's political foes through a fierce anti-corruption campaign. As Wang is a close ally of Xi, what was meant by "top-down" was clear.

Official Chinese media reported at the start of the fourth plenary session that the target of "basically realizing" the modernization of China's national governance capacity by 2035 is essential for Communist Party rule.

Seen through a political lens, it means that the top-down decision-making system will be completed in the next 15 years, with Xi at the helm.

This is why Xi's team wanted to keep current economic conditions -- if they are as bad as Trump says -- from being the central topic of the fourth plenary session.

The current Chinese commander for macroeconomic policy is Vice Premier Liu He. The 67-year-old Politburo member is a close aide to Xi and leads the difficult trade negotiations with the U.S.

For Xi, one way to suppress intraparty discontent is the possible promotion of successor candidates to the Politburo Standing Committee, as reported recently by a Hong Kong newspaper.

Such major personnel changes at a plenary session of the Central Committee, as opposed to the Communist Party's twice-a-decade national congress, would be unusual. But if they materialize, Xi will be able to contain criticism that he has ignored the party tradition of grooming successor candidates.

Xi has two options. One is to increase the Politburo Standing Committee's members from the current seven to the past number of nine. The other is to replace only one of the seven members.

The most likely candidate to join the Politburo Standing Committee is Chen Min'er, the Communist Party secretary of Chongqing. The 59-year-old is also on the Politburo and has been a close aide to Xi since their days in Zhejiang Province.

Vice Premier Hu Chunhua, 56, is also tipped to be a candidate. He, too, serves as a Politburo member. Hu is the ace of the Communist Youth League faction, which has been led by former President Hu Jintao.

Another close aide to Xi -- Li Qiang, the Communist Party secretary of Shanghai -- qualifies to join the Politburo Standing Committee. The 60-year-old is also a Politburo member. He is a technocrat who served as Xi's chief secretary during their time in Zhejiang.

President Xi Jinping sets out to inspect troops on the 70th anniversary of the founding of the People's Republic of China on Oct. 1 in Beijing.   © Kyodo

A bold personnel change would be a risky double-edged sword. If anyone emerges as a clear candidate to step into Xi's shoes as the party's general secretary and the nation's president, Xi himself could quickly become a lame duck.

If Xi is to remain China's de facto supreme leader at the party's next national congress in 2022, he will have no choice but to follow the path of Deng and former President Jiang Zemin.

Deng and Jiang each retained enormous influence for a long time by remaining chairman of the Central Military Commission, the top military post.

Xi has one more possible move up his sleeve, albeit a high-handed one: restoring the post of party chairman for life, which had been reserved only for Mao.

The path to a "people's leader" with absolute power -- the honorific given to Mao -- is likely what Xi actually intends to follow, as he wants a departure from the course set by Deng.

In any case, the latest topic of the fourth plenary session has shifted to whether there will be any important personnel changes -- not the economy facing a crisis, an issue with a significant global impact.

Now that changes of local leaders have been announced, possible personnel changes in the national political arena have drawn unprecedented attention. This in itself reflects a continued tough political tug of war within the Communist Party.

The 11th-hour fourth plenary session may be a place where Xi is fighting with his back to the wall. There is no guarantee that the important meeting will pass smoothly and quietly as usual. The outcome of Xi's battle there will become clear Thursday evening.

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