By Lowell Dittmer.

Somewhat like Western democracies, the institutionalization of China’s “People’s Democratic Dictatorship” since the advent of “reform and opening” in December 1978 (i.e. cadre tenure rules, regularly scheduled meeting sessions), Chinas “resilient authoritarianism” has become the focus of public expectations—both hopes and fears—for change among China’s rising civil society. These expectations can now build on a schedule coinciding with the powers above. And so long as they remain within bounds, the leadership has become more attentive.

The hopes for the “two sessions”, as reported here and elsewhere, have been focused on the revival of “political reform” after what is sometimes daringly referred to as “ten lost years.”[1]  To be sure, the foremost priority of the leadership is its own self-preservation. The incoming leadership of Xi Jinping and Li Keqiang seems to be stronger and more self-confident than that of its predecessors of the past decade, with PLA-based Xi claiming all three formal leadership posts and reducing the size of his Standing Committee. But even Xi can be expected to uphold the system that produced him, constrained by a collective leadership chosen by his patron and senior to him (albeit term limited). His obvious task is to find a viable compromise between preservation of the status quo and accommodation of vague but rising popular expectations.

Though it is still early to say, the contours of that compromise are gradually becoming clear. Xi aims to be a vigorous reformer, quietly deleting the “political.”[2] In the first major governmental reform in 5 years a plan was presented on March 10 to do the following: First, dissolve the Railway Ministry, with its administrative powers incorporated into the Ministry of Transport, transferring commercial functions to a China Railway Corporation. Second, set up a National Health and Family Planning Commission by merging the Health Ministry with the National Population and Family Planning Commission. Third, elevate the status of the State Administration of Food and Drug to more effectively protect food safety. Fourth, merge the two media regulators into one to oversee the country’s press, publication, radio, film and television sectors. Fifth, restructure the country’s top oceanic administration to enhance maritime law enforcement. Sixth, restructure and streamline the National Energy Administration.

The underlying motive is to reduce bureaucratic micromanagement and give greater play to the market. This suggests that “ownership reform” (i.e. privatization), which gave way to the state  (“guo jin min tui”) during and after the international financial crisis may be back on the cards.

Although Zhou Xiaoquan’s promotion to the Presidium of the CPPCC qualifies him to remain chair of the central bank, his mishandling of the new transaction tax suggests no one knows how to lance the housing bubble. A team endorsed by last November’s party congress – led by Xi and Li Keqiang  – has already indicated that it plans to close down China’s re-education through labour system this year, though it is unclear what will replace it. China plans to maintain a 7.5% growth rate by facilitating more rapid urbanization over the next decade and thus unleashing a wave of domestic consumer spending, thereby reducing export dependency and rebalancing what Wen Jiabao calls its “unsustainable” growth model.  Greater flexibility on exchange rate appreciation is promised to China’s trade partners. Along with the market that Hegel thought it encompassed, civil society is to be less stringently regulated, privileging, however, the business, professional and scientific NGOs while keeping a tight rein on politics.

In a hardline approach Francois Godement aptly likened to Yuri Andropov’s late attempt to revive the Soviet Union, Xi gives little ground to media liberalization or toleration of dissidence (thus repercussions of the Nanfang Zhoumou mutiny have been contained). Unfazed by Bloomberg’s exposure of his extended family’s unexplained accumulation of some US$370 million, Xi has launched a stringent crackdown on corruption, both “tigers” and “flies,” though whether this goes beyond a “strike hard” campaign to needed structural reform is yet unclear. Party officials at all levels must revive their commitment to Marxist-Leninist values and not follow the former Soviet Union, Xi warned in a recent speech, which collapsed because “they denied Lenin, they denied Stalin. Everything was denied. It led to historical nihilism and ideological anarchy.” The military budget will increase slightly less than last year (10.7%), still more than anticipated GDP growth, for a budget deficit amounting to a mere 2% of GDP .

And what about foreign policy, China’s nervous neighbors want to know. In an agenda almost exclusively devoted to domestic policy the few available clues were not encouraging. Vice Minister of Foreign Affairs Fu Ying (the NPC’s first female spokesperson) warned that the country had sent an “important signal” to the region that it would respond “decisively” to territorial provocations. Through his wife, General Peng Liyuan and other family contacts, Xi has made the army his base, and personally chaired a task force last summer that responded so assertively to Japan’s purchase of the Senkaku/Diaoyu islets from private owners. Xi may thus be more firmly identified with China’s high-risk maritime policy than Hu Jintao. On the other hand the new foreign policy team is competent and experienced.[3] This strengthens the hand of the MFA vis-à-vis the Central Military Commission, and gives the new leadership the diplomatic wherewithal to make a discreet climbdown should that prove necessary.