Factionalism Heats Up

Xi Jinping has now led the Chinese Communist Party (CCP) for almost two months, a period too short to effectively gauge how he will lead, but long enough to highlight what directions he intends to take the party.  All signs point to the fact that Xi Jinping will be a reformer, specifically a reformer who wants to close the book on the policies and objectives of Hu Jintao’s tenure.

It is uncertain how far or fast Xi will push change – he may soon challenge the hukou system (China’s household registration system that has long hurt urban migrants), experiment with a fully-privatized housing system, and/or increase competition among China’s state owned enterprises.  Most of the changes attributed to Xi directly challenge the administration of Hu.  Hu and his supporters emphasized rural urbanization and took actions that empowered the state-owned enterprise system, both of which were interpreted as efforts to delay the speed of privatization and economic reform.

The issue going forward is that these two camps within the CCP – Xi’s emerging collection of reform-minded supporters and Hu’s remaining collection of anti-reformers – are likely to conflict.  The CCP has long been plagued by interparty factionalism.  The recent Bo Xilai saga and the Party Congress only highlight how much competition goes on behind closed doors.  The tensions between these two factions will only increase as Hu’s time as PRC President ends in March.  Much depends on how well Xi Jinping navigates his party’s politics and manipulates Chinese public opinion.  Some will argue that increased factional tension will lead to internal strife that could impact the legitimacy of the PRC.  However, if I had to make a wager, I would bet that Xi Jinping successful navigates internal politics (he has proven he can work the system) and enacts substantial economic reform.  Such reforms will be good news for international investors, as well as good news for democracy advocates – a more economically rational China will increase prospects for marginal political reform.

Please note that the views expressed in this piece do not represent the official policy or position of the National Defense University, the Department of Defense, or the U.S. government.

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